If you’re going to purchase and install any type of software, it’s important that you understand how to use it. More often than not, a business will integrate a new system, yet fail to train people on it. Every tool should be utilized to the fullest extent to drive business growth.
Any business owner knows that getting customers to pay their bills is important. That means software that makes it easy to send invoices, track payments, and record company expenses. That’s where invoicing and payment software can assist you. It’s a modern accounting solution that’s incredibly user-friendly.
What is Invoicing and Payment Software?
This is also called accounting software. The platform you choose will delineate the functionality. However, there are some core modules that every system should be able to perform. That includes tasks like:
- Accounts Receivable – Where a business enters money received
- Accounts Payable – Where a business enters bills and pays money owed
- Billing – Where a business sends invoices to customers
- General Ledger – The “books” of the business
- Purchase Order – Where the business records orders for the supply of inventory
- Stock/Inventory – Where a business maintains control of inventory
- Sales Order – Where a business records customer orders for the supply of inventory
- Bookkeeping – Where a business records collection and payment
- Financial close management – Where accounting teams will verify and adjust balance at the end of a certain period
The invoice software can be niche and perform other tasks like track time, debt collection, online payments, payroll, reconciliation, expense reports, late payment reminders, electronic payment processing, and more.
Setting up Your Invoicing System
Once you’ve decided to ditch the spreadsheet and manual invoicing, you need to look for the right electronic invoicing system. Most will let you create, review, and manage your invoices from a mobile device. They will ask you to download a branded mobile app.
Additionally, you should be able to automate invoicing by setting up recurring payments and payment reminders. Some programs will ping your customers until an invoice has been paid. Automatic payment reminders can save a lot of time. The best invoicing software comes with features like time tracking, project management, and expense tracking.
Input Customer Data
When looking at software options, you should choose one that is customizable. After you’ve selected a platform, the first step is to input customer data. You cannot start invoicing without it. This includes information like:
- Billing address
- Mailing address
- Preferred payment method (credit card, debit card, etc.)
- Bank account (for ACH payments)
Once all this data is stored, a small business should be able to start invoicing or set up recurring payments immediately. This is perfect for a subscription-based company or a self-employed freelancer working on a long-term project.
Payment terms and policies must be established for when and how your invoices are to be paid. This will ensure that there are no hiccups during the process and cut back on outstanding invoices. It’s also good to layout the type of payment options you would accept. The payment policy should have short terms. Most people use 30 days. This is how you receive money faster and have a healthy cash flow. The longer you draw out the invoicing process, the longer it takes to get paid.
Many platforms have invoice templates that will help you produce professional invoices. It’s as simple as drag-and-drop. Badly designed invoices make a brand look like they don’t have it together. It’s not as complex as it sounds. Invoicing features include:
- Brand colors
- Invoice number
- Contact information
- Payment terms
- Line items of billable products/services
- Sales tax
- Due date
It’s also good practice to include a personalized message that says “Thank You” to the client for payment. Remember to always keep it polite and professional. Most billing software will automatically issue invoice numbers. You can even consider awarding a discount for early payment.
Outsource When Needed
Even with the top integrated accounting software, a business owner should focus on growth. Know when to seek outside help to streamline the workflow and manage the electronic invoicing. Despite the convenience of digital, it still needs a follow-up.
Getting More Out of Your Invoicing Software
There are many tricks of the trade to get the most out of this kind of software. The more small business owners can streamline processes, the more money they will make. Here are a few tips to consider:
Include the Year
Include the year in your invoice numbers. The structure should follow something like 001/2020. There is a good reason for this. When you include the year in an invoice series, financial authorities can track income easier. This makes it simple to calculate taxes for that financial year. Especially if you have a large number of clients.
Consider Other Avenues
Some people intentionally ignore their inbox because the influx is a nightmare. Or, they receive so much email things get lost. Consider alternative methods of delivering an invoice. You are not limited to email. If you have a customer’s phone number, this is one invoicing solution. Even Facebook Messenger is another effective invoicing tool.
It may be a great idea to start recording expenses with a photo. If you lose the receipt, it’s like it never happened. Many accounting systems use OCR technology to read invoices and receipts through a mobile device like a tablet or smartphone. The data is then automatically fed into your invoice and payment software.
Why is Accounting Software Important for Your Business
There are many reasons to invest in these types of platforms. They are not all costly, and some are even run on a subscription basis. For starters, these types of software solutions are incredibly user-friendly. They generally take little training and can be easily installed. Additionally, you can generate reports that give financial insight into your business. This can lead to data-driven decision making that drives revenue.
Invoicing software will help to improve financial performance by keeping accurate records of business transactions. You can easily track cash flow, revenue, and expenses, all in one spot. Lastly, it’s simply faster than the manual process. It provides real-time data that helps to streamline operations and lead a business to success.