Technology and the Internet rule the modern world. In modern times, it would be a shame if your business still keeps its invoices on pieces of paper and scattered files, even though many invoicing software programs are available. An invoicing software, such as Zoho Invoice, is a technological solution to the complex process of maintaining bills. Automating most tasks, such as generating invoices, sending them to clients, and ensuring they are error-free, streamlines the process. They are the key to success, especially for small businesses.
Take a look at how small businesses can benefit from them, what limitations they must be aware of, and what factors they must consider before choosing software.
What is Invoicing Software?
In layman’s terms, invoicing software is a computer-based program that simplifies and automates your billing and invoicing procedures. With the list of products and services, you update them with their related costs; they can automatically generate bills and invoices and send them to your clients. This software mostly has built-in templates or customization features that streamline these complex processes for your business. They sync data to multiple other applications and rid you of even sending emails to your clients as the software does it.
There are many types of invoicing software, such as online, offline, and open source. The difference between online and offline invoicing software is that online applications require an internet connection, while offline software stores data on your device and uses applications such as Excel and Word to process the relevant data. On the other hand, open-source invoicing software designates different source codes for each business that can be easily changed and modified according to the needs. Based on your preferences and requirements, you should choose between the three.
How is Invoicing Software Beneficial for Small Businesses?
By 2027, the e-invoicing market is expected to see an 80% boost and exceed $24.73 billion. Invoicing software and e-invoicing must be doing something right to gain importance at such a rapid rate. Let’s find out how they simplify tasks, especially for smaller businesses.
Every payment is vital to a small business. Missing out on any of these will affect your bottom line. Invoicing software can be your savior in this regard. Maintaining such a record allows you to ensure that you do not miss any payments. You will also be less likely to experience delays in receiving payments since you are fully aware of every payment, amount, and deadline. Without a check and balance, your clients will be able to come up with the most inventive excuses. Since you won’t have a proper record, they might as well deny all their commitments. An invoicing software protects you from such a scenario.
By 2027, the e-invoicing market is expected to see an 80% boost and exceed $24.73 billion.
Small businesses have limited human resources, so allocating them to billing and invoicing departments will leave a few to handle other business operations. They would have to hire new staff to ensure their business remains unaffected, which means more wages. A much better option can be relying upon a fully-automated invoicing software, such as QuickBooks, that can single-handedly manage all your accounting tasks.
You save money and a lot of time because manual invoicing and billing can be extremely arduous, energy-draining, and time-consuming, whereas the opposite is true for e-invoicing. After setting things up for the first time, you can simply manage all the complex tasks with just one click.
Furthermore, even if you spend hours manually invoicing, you still cannot be sure that the end product is error-free. With invoicing software, you can maintain accuracy and detect fraud easily. Today’s software has features that can identify missing details, so you’ll be able to discover any potential forgery intended by your employees quickly.
After spending two years indoors during the pandemic, work-from-home has primarily become the new norm. Invoicing software is also fully supportive of the idea as they help you generate invoices sitting at any corner of the world. You are not required to travel long distances to your office for such a basic task is another significant benefit, particularly for small businesses that often don’t have a fully functional office. This software is also the flag bearer of sustainability. In present times, when the world is faced with a challenge to protect the environment, invoicing software entirely lends its support as it relieves you from wasting unnecessary amounts of paper on preparing your invoices.
What Limits the Use of an Invoicing Software for a Small Business?
You must not let the benefits mentioned above blind you to the flaws in invoicing software. However, they do not come without limitations, and if a small business wants to experience the pros, it must be aware of the downsides. The first limitation invoicing software usually offers is pricing. Software that simplifies many of your time-consuming tasks is generally costly. As a result, it can be a severe concern for small businesses with limited budgets. It is challenging to allocate money to software when you already have a lot to invest in.
Security concerns are another serious limitation an invoicing software comes with. Parallel to the tightening of e-security runs the brains of hackers that undergo development at an equal pace. If a hacker breaks into your business’ system of invoices by chance, you risk losing everything.
One can also question the credibility of the data; no matter how automated and fancy these systems may be, you are their primary source of information. To proceed, they need you to enter the details. Since this software is synonymous with robots, you can easily trick them by entering misrepresentative data to create a particular image of your business.
The technical nature of invoicing software presents yet another limitation that you, as a small business, must not ignore. Most of the time, the software takes many hours to set up and is often complicated to understand if you are a non-accounting and less tech-savvy person. You will need prior training to be able to deconstruct its technicalities fully.
You, with your limited resources, are likely not in a position to commit to such requirements. Finally, it needs to be constantly backed up for the data to stay intact. For the backup to smoothly take place, there needs to be an uninterrupted power supply, in most cases, and failure to ensure that can put you at risk of losing all your financial records.
How to Make the Right Choice?
The limitations add weight to the claim that not every invoicing software is the right for your business. You need to consider several factors to make the right choice. For instance, you must check the level of security the software tends to offer. This is because you will entrust the entire financial record of your business to it, which your business entirely relies upon. You can ensure that by first putting the software on trial and testing its security mechanisms. Security is thus an important feature to help narrow your search for the right invoicing software.
Next comes the cost. Although investing in invoicing software is not a waste of resources, you should still see if your business can bear the burden. For example, there are invoicing software like FreshBooks that are not just highly functional but also pocket-friendly.
The scale your business operates on also largely impacts your choice. There is software primarily made for medium and large-scale enterprises and vice versa. As a small business, if you choose complex software that does not support your business scale, you will inflict more harm than benefit to your bills and invoices. It is also vital that you are aware of the scale of your business. Often, companies interchangeably use medium and small-scale enterprises even though they are very different. A small-scale setup has few employees, limited revenues, restricted use of technology, and a leader who is often the business owner.
You also need to be fully aware of the features you cannot compromise on and are required at all costs for your business. This is by far the easiest way of filtering out unnecessary options. Furthermore, if you are not much into computers and accounting but need invoicing software for your business, make sure you choose the one with 24/7 customer support and a detailed manual to guide you through the technical aspects of setting up and customizing the software. If you opt for something that lacks these, you will fail to cash in on the software’s fantastic benefits.
Lastly, don’t forget to take the customer reviews into account. They come from direct software users and contain their first-hand experiences helping you get greater clarity. Although the culture of putting up fake reviews also exists, you can easily detect them if you crack the pattern they mostly have.
Conclusively, invoicing software is the road that leads a small business to quickly becoming a potential multinational corporation. With the wide variety of options it provides and the benefits that range from reducing delayed and missed payments to minimizing frauds and errors, invoicing software are also sustainable enough with how they help you save a lot of resources, including time, human capital, and money. They also have certain limitations that a small business needs to be mindful of, such as the lingering risk of loss of data, the initial entry of data, the vulnerability to hackers, and the high prices. They often keep businesses away from adopting modern solutions. However, if you make the right choice, you can always use invoicing software. You just need to ensure that their intention depends on your preferences concerning cost, features, and security levels. You must also double-check your business’s scale and assess its compatibility with the short-listed invoicing software.