Best Invoicing Software for Small Businesses 2023

The first step for a business to get paid for the products or services rendered is creating an invoice. While the previous practice was to keep the books manually and get paid in cash, today more and more businesses are taking the shift towards electronic accounting and invoicing to avoid erroneous billing and delayed payments. Minimized processing time and lower associated costs are just the most obvious advantages of invoicing software over paper-based invoicing.

But before getting deeper into the subject of invoicing software, every small business owner has to weigh up whether investing in a separate invoicing software is really more rational for their business than installing a comprehensive accounting software and accounting integration which already includes invoicing functions.

In this article we are going to look at the following:

1. What is invoicing software?

2. Shift to e-invoicing

3. Benefits of invoicing software for small businesses

4. Key features of invoicing software for small businesses

5. Easy invoicing with Synder Sync

6. Best invoicing software for small businesses: top 5

1) What is invoicing software?

Invoicing software is an electronic tool that generates billing for products and services, which streamlines the getting-paid process and gives a business owner better understanding of a company’s financial situation. Basically, this software creates a list of products and/or services rendered by a business with corresponding costs, and using mostly professional-looking templates makes invoices that are later sent to the customers.

2) Shift to e-invoicing

Invoicing process is getting more and more digitized and it’s estimated that the global e-invoicing market  will amount to $16.68 billion by 2030 from $5.87 billion in 2020. This digital shift means that the e-invoicing process is eliminating manual processes, which makes businesses adopt invoicing software. The result is that around 50% of companies in North America have added digital collection systems and one in four companies has moved to e-invoicing since 2020.

United States e-Invoicing Pilot Project that started in 2022 and is running through the 1^st quarter of 2023 has its aim to establish a standardized e-invoice model and create an electronic document exchange network.

All these facts only prove that the future belongs to mandatory e-invoicing with the aim to build a common electronic invoicing framework so that large enterprises and small businesses can benefit from automating this business process. According to the Business Payments Coalition, paper-based invoices are highly inefficient and expensive for the buyer and supplier, while electronic invoices are cheaper and minimize manual effort supporting multinational compliance.

3) Benefits of invoicing software for small businesses

Aside from the before-mentioned shift to e-invoicing, which means that sooner or later paper invoices will become a thing of the past, the best invoicing software performs all invoice-related tasks for small businesses and should provide the following benefits, according to financesonline.com:

1. Minimization of late payments

 A good invoicing software streamlines your billing and invoicing process, which helps receive payments on time. Keeping it all organized will certainly boost profitability.

2. Minimization of missed payments

Tracking all the billing commitments will make sure that all the payments are collected, which gets a business to a positive bottom line.

3. Minimization of fraud and improved security

A good invoicing software provides security features to ensure protection of the entire billing-to-payment process from hacks. In this respect, e-invoicing certainly surpasses sending paper invoices by mail.

4. Maintaining a professional image

Using a good invoicing and billing software contributes to boosting your company’s reputation. Customized design of invoices, logos and other improvements make a business look professional.  

5. Automating important tasks in accounting and financial processes

While faster payment of invoices helps increase cash flow, shorter time of fixing possible errors wins good customer relations. Automation always means cutting costs and redirecting hours spent on manual procedures into something more valuable.

4) Key features of invoicing software for small businesses

Invoicing software is much more than just creating invoices.  The key features of invoicing software can vary depending on the specific product, but generally include:

• Invoice creation

A good invoicing software should allow you to easily create and customize invoices with your logo, payment terms, and other relevant information.

• Automatic invoicing

Many invoicing software solutions allow you to set up automatic invoicing for recurring payments or subscriptions, saving you time and reducing the risk of errors.

• Payment tracking

Your invoicing and billing software should enable you to track payments received and overdue payments, so you can keep track of your accounts receivable.

• Payment options

A reliable invoicing software should offer multiple payment options, such as credit card, PayPal, bank transfer, and others.

• Invoice management

A good invoicing solution should help you manage and organize your invoices, including archiving old invoices and generating reports.

• Integration

Invoicing software often integrates with other business software, such as accounting software, project management software, and CRM software, to streamline workflows and reduce manual data entry. 

• Security

A reliable invoicing software should have strong security measures in place to protect your sensitive financial data.

• Mobile access

You should be able to access and manage your invoices from any device, including smartphones and tablets.

• Customer support

The software provider should offer reliable customer support to help you with any questions or issues that arise.

• Tax report 

A good online invoicing software should eliminate the need to use external systems for tax reporting and allow you to perform it within the same system without losing hours to summarize information.

5) Easy invoicing with Synder Sync

There are far more options for invoice management than the top 5 we compiled. If you turn to stand-alone invoicing software, you might find such popular solutions as Invoice Simple, Invoicera, Hiveage, Harvest, Invoicely, Bill.com and others.  And should you decide to rely on a stand-alone invoicing software, it’s wise to research these options too. But while that might be a good solution for invoice management, a small business has many more requirements and needs to meet.  That leads us to an idea that a more comprehensive accounting software solution with invoicing function might be a good value for the money paid.

Synder Sync is a good example of such an exhaustive solution. It’s an invoicing and accounting software that offers a number of strong features and benefits, including:

• Seamless integration: Synder integrates with a variety of e-commerce platforms, payment gateways, and accounting software, allowing users to sync transactions and automate bookkeeping tasks.
• Multi-currency support: Synder supports multiple currencies, allowing users to transact with customers and suppliers in their local currency and automatically convert transactions to the user’s base currency.
• Automated reconciliation: Synder’s reconciliation feature automatically matches transactions with corresponding invoices and payments, streamlining the bookkeeping process and reducing the risk of errors.
• Real-time syncing: Synder offers real-time syncing of transactions, ensuring that financial data is always up to date and accurate.
• Advanced reporting: Synder offers a variety of financial reports, including profit and loss statements, balance sheets, and cash flow reports, allowing users to gain insights into their business performance.
• Customization: Synder allows users to customize invoices and receipts with their own branding, logos, and messaging, creating a more professional and cohesive look.
• User-friendly interface: Synder’s interface is user-friendly and easy to navigate, making it easy for users to manage their finances and generate reports.
• Excellent customer support: Synder offers excellent customer support, with a knowledgeable and responsive team available to assist users with any questions or issues.

This is how the invoicing process with Synder looks like.

If you decide to give Synder a go, you can book office hours with the Synder team and check out Synder’s free trial, which may drastically change your business experience and save your time. 

6) Best invoicing software for small businesses: top 5

There’s a variety of stand-alone invoicing software and accounting software programs available, and the choice of the “best” one for you will depend on your specific needs and preferences. You can rely on user reviews on trusted review platforms and various ratings from reliable sources, which eliminates the need of researching all the possible options on your own. We looked through the ratings of the best invoicing software for small business on forbes.com, fitsmallbusiness.com, investopedia.com, nerdwallet.com and chose  our top 5 invoicing software programs for small businesses that are worth considering:

1. QuickBooks Online

QuickBooks Online is a well-known and popular cloud-based accounting software that provides a range of features for small businesses, including invoicing. QuickBooks Online offers a variety of features that aren’t found in most invoicing software (inventory management, in-person payment and tax features). This software might be a good option for small brick-and-mortar businesses that accept payments online and in person. 

Let’s have a look at the advantages and disadvantages of using QuickBooks Online as an invoicing option for small businesses:

Advantages:

• User-Friendly: QuickBooks Online is easy to set up and use, with a user-friendly interface that allows even non-accountants to handle basic invoicing tasks.
• Automated Invoicing: QuickBooks Online offers automated invoicing, which saves time and reduces the likelihood of errors. You can create recurring invoices, schedule future invoices, and set up payment reminders.
• Payment Options: QuickBooks Online provides multiple payment options, including online payment through credit cards and bank transfers. 
• Integration: QuickBooks Online integrates with a wide range of other software and services, including payment gateways, payroll software, and inventory management software. 

Disadvantages:

• Cost: The pricing plans of QuickBooks Online can be expensive for small businesses. And the cost increases as you add more features, such as payroll and inventory management.
• Limited Customization: While QuickBooks Online offers a range of customizable invoice templates, the level of customization is limited compared to other invoicing software.
• Limited Reporting: QuickBooks Online provides basic invoicing reports, but its reporting capabilities are limited compared to other accounting software.
• Learning Curve: You might have to face a learning curve when using QuickBooks Online, especially if you aren’t familiar with accounting software. 

Pricing plans:

• Simple Start: $30 per month
• Essentials: $55 per month
• Plus: $85 per month
• Advanced: $200 per month

There’s a free 30-day trial and 50% off for the first three months.

2. Freshbooks

FreshBooks is a user-friendly invoicing software program that offers a range of accounting features for small businesses and freelancers. This software provides its clients with customizable invoices and options for recurring invoicing and auto payment. 

Let’s look at the advantages and disadvantages that might influence your choice.

Advantages:

• Easy-to-use interface: FreshBooks has a user-friendly interface that makes it easy to create and send invoices, track time and expenses, and manage projects.
• Professional-looking invoices: FreshBooks offers a variety of customizable templates for invoices that can be tailored to fit your brand.
• Online payments: FreshBooks allows you to accept online payments from clients, which can help you get paid faster and reduce the need for manual payment processing.
• Time tracking: FreshBooks includes built-in time tracking features that allow you to easily bill clients for your time.
• Mobile accessibility: FreshBooks is accessible from anywhere with an internet connection, and offers a mobile app for iOS and Android devices, allowing you to manage your finances on the go.

Disadvantages:

• Limited accounting features: While FreshBooks offers basic accounting features such as expense tracking and financial reporting, it doesn’t have the comprehensive accounting features of more robust accounting software programs.
• Limited integrations: FreshBooks integrates with a range of tools and services, but it may not have the same level of integration options as other invoicing software programs.
• Pricing: FreshBooks can be more expensive than other invoicing software programs, particularly for businesses with multiple users or a high volume of transactions.
• Limited customization: While FreshBooks offers customizable invoice templates, there may be limited options for customization beyond the available templates.

Pricing plans:

FreshBooks offers a 30-day trial and if you decide to stay with it, one of the following plans (with 60% discount in the first 6 months):  

• Lite: $17 per month (for up to 5 billable clients)
• Plus: $30 per month (for up to 50 billable clients)
• Premium: $55 per month (for unlimited billable clients)

3. Zoho Invoice

Zoho Invoice is a free cloud-based invoicing and billing software that offers a range of features for businesses of all sizes. It can help you track projects and billable hours, send estimates and create custom invoices from approved estimates or projects. Zoho Invoice provides its clients with a built-in client portal to simplify communication with your customers and get approval for billing. The only cost associated with Zoho Invoice is that you have to pay transaction fees any time you get paid through an invoice as you use payment gateways.

Here are some of the advantages and disadvantages of using Zoho Invoice:

Advantages:

• Easy to use: Zoho Invoice is user-friendly, and it’s easy to set up and navigate through its various features.
• Customizable: Zoho Invoice allows users to customize invoices, estimates, and other documents to match their brand.
• Mobile-friendly: Zoho Invoice has a mobile app that allows users to create and manage invoices on the go.
• Integrations: Zoho Invoice integrates with a range of third-party apps, such as PayPal and Stripe, making it easy to accept payments online.
• Cost-effective: Zoho Invoice offers a range of pricing plans, including a free plan, making it an affordable option for small businesses.

Disadvantages:

• Limited customization options: While Zoho Invoice is customizable, some users may find the range of customization options limited.
• Limited reporting: Zoho Invoice’s reporting capabilities are basic compared to other invoicing software options, which may be a drawback for some small businesses.
• Limited features: Zoho Invoice may not offer as many features as other invoicing software options, which may be a drawback for small businesses with more complex invoicing needs.
• Customer support: Some users have reported issues with Zoho Invoice’s customer support, including slow response times and difficulty resolving issues.

Pricing plans:

Zoho Invoice is totally free with no hidden charges, in-app purchases, and ads.

4. Square Invoices

Square Invoices is a cloud-based invoicing software that allows businesses to create and send professional invoices to their customers. With Square Invoices, businesses can customize invoices with their branding and accept payments via credit card, debit card, or bank transfer. Square Invoices is a part of the Square ecosystem of products, which includes point-of-sale hardware and software, payroll, and other financial services. Square Invoices is designed for medium-sized and small businesses and is a popular invoicing software option for freelancers, consultants, and service-based businesses.

Here are some of the advantages and disadvantages of using Square Invoices:

Advantages:

• Easy to use: Square Invoices has a user-friendly interface, making it easy to set up and navigate through its features.
• Customizable: Square Invoices allows users to customize invoices with their brand logo, colors, and other elements.
• Payment options: Square Invoices allows users to accept payments via credit card, debit card, or bank transfer, which can help businesses get paid faster.
• Automated reminders: Square Invoices can send automated payment reminders to customers, which can help businesses get paid on time.
• Mobile app: Square Invoices has a mobile app that allows users to create and manage invoices on the go.

Disadvantages:

• Limited reporting: Square Invoices’ reporting capabilities are basic compared to other invoicing software solutions.
• Limited customization options: Some users may find the range of customization options limited.
• Fees: Square Invoices charges fees for credit card transactions, which may be a drawback for businesses that need to process a large volume of transactions.
• Customer support: Slow response times and difficulty resolving issues might be a problem in some cases.

Pricing plans:

Square Invoices offers the following:

• Free Plan: Free forever
• Plus Plan: $20 per month (for additional invoicing features like custom fields and multipackage estimates)

Square Invoices also has some additional fees you should be aware of:

• Invoices paid online: 2.9% plus 30 cents per transaction
• Tap, dip, and swipe payments: $2.6% plus 10 cents per transaction
• Card-on-file payments: 3.5% plus 15 cents per transaction
• ACH payments: 1% per payment—maximum of $1 per transaction

5. Invoice Ninja

Invoice Ninja is a cloud-based invoicing and payment platform that offers a range of features and benefits for small businesses. Invoice Ninja’s Forever Free offers a free plan for users to send unlimited invoices and estimates to up to 20 clients and access a number of features that can make account management easier.

 Here are some of the advantages and disadvantages of using Invoice Ninja:

Advantages:

• Affordable pricing: Invoice Ninja offers a range of pricing plans, including a free plan, which makes it an affordable option for small businesses.
• Customization: Invoice Ninja offers a high degree of customization, which allows businesses to create professional-looking invoices.
• Payment integration: Invoice Ninja integrates with a variety of payment gateways, including PayPal and Stripe.
• Time tracking: Invoice Ninja includes a time tracking feature, which allows businesses to track the amount of time spent on a project and bill clients accordingly.
• Client management: Invoice Ninja includes a client management feature, which allows businesses to keep track of their clients’ contact information and payment history.

Disadvantages:

• Limited integrations: While Invoice Ninja integrates with a variety of payment gateways, it has limited integrations with other software and services.
• Limited reporting: Invoice Ninja’s reporting feature is somewhat limited compared to other invoicing software.
• Limited automation: Invoice Ninja’s automation features are somewhat limited compared to other invoicing platforms, which can make it time-consuming for businesses to complete certain tasks, such as recurring invoicing.
• Limited mobile app: While Invoice Ninja has a mobile app, it has limited functionality compared to the desktop version.

Pricing plans:

Invoice Ninja offers the following:

• Free Plan: Free forever (up to 20 clients)
• Ninja Pro Plan: $ 100 per year (for unlimited clients and invoices)
• Enterprise Plan: $ 140 per year (for multiple-user access)

Bottom line:

Ultimately, the best invoicing software for your small business will depend on your specific needs and budget. It might be a good idea to research several options and get free trials before making a decision.