Estimated reading time: 16 minutes, 18 seconds

Review: Invoicing Software 2012


Although most service businesses are used to generating invoices manually in a word processor, there are many disadvantages to this. First, you have to find all the charges billed to a particular client and project. Next, you have to add everything up correctly and send it out. Finally, you have to manually enter invoice amounts received from the client in your accounting software.

Not only is this time-consuming, but it's easy to make errors that can cost money and clients at every stage. If you neglect to enter a charge on an invoice, you may not get paid for it. And if your make an arithmetic error, you can lose money or annoy a client. Furthermore, it's not easy to track manual invoices in your accounting system for aged receivables, and data entry errors can complicate your life here, too. Invoicing applications are very useful for service businesses that are issuing just a few client invoices a month. Some are standalone and others are tied into accounting software, but all of them provide an integrated way of connecting your invoicing and your accounting software.

What should you expect in an invoicing application? You can expect that an invoicing application will do all your basic invoice calculations. This will include per-unit costing, totals, tax percentages, and additional charges. If the invoicing application is integrated with the accounting software, it pulls client information, and payment history from the accounting system's database. It's also likely to be able use default payment terms set for the client or globally for all clients. Once an invoice is sent (emailed or printed and mailed), the information will be added to the client's accounting information for aged receivables and tracking.

Invoices and payment history are available via a link sent to the customer. Payment options should include PayPal, credit card, online bank withdrawal. Entering check or cash payments should be uncomplicated. Payments made through the invoicing application must also be reflected in integrated accounting software. Customers should be able to download copies of the invoice in PDF format to their own computers.

An increasing number of products are offering apps for mobile devices. Many companies will offer postal mail services, so for a small fee, you can have them print and mail invoices to clients, giving an extra option for invoicing to mobile user.

Last, you should expect any invoicing product to have a free trial period (typically 30 days). Trial periods give you a chance to play with the product and see if you like the user interface and how it does things. If you're evaluating several products, there's no reason you can't sign up for multiple free trials at the same time and spend a few days doing nothing but playing with different products to see which suits you best.

Palo Alto, Calif.
(650) 353-3301 or (877) 345-2455
This email address is being protected from spambots. You need JavaScript enabled to view it.
Price: $24 per month (one user); $49 per month (up to five users), $99 per month (up to 15 users). Enterprise pricing, also available.

Bill.com is a web-based service for automating bill workflow: bill payment, invoicing, and some filing tasks. Bill.com isn't part of a larger accounting system; rather, it works with NetSuite, Intacct and Xero, and both the online and desktop versions of QuickBooks and Sage. (Other accounting systems can be handled with import/export features.) If you don't already have an accounting system set up, you just need something to handle your invoicing-you can enter your client information and item descriptions manually. If you prefer, you can ship your bills to Bill.com and have them enter the information for you, with data-entry correction.

To create an invoice, you first select the invoice template to use, and then select the client name from a drop-down list. Bill.com pulls the client information from the database and fills in the template. You then can select items purchased/received by the client, which in turn displays the defaults for the description and unit price. Entering a quantity and an optional sales tax for that line item automatically generates the line item total and updates the invoice total at the bottom of the page. Discounts are treated as an item, so if you want to give someone a 5-percent discount, you set up an item with a negative 5 percent as the price. There's also a customer message field you can use to enter a message or TY note to the client.

You can print invoices or email them directly from Bill.com. Emailed invoices go to the email address you specify. Customers see a formatted invoice in their inboxes with a link to their customer pages on the Bill.com portal. From this page, they can view their customer information, payment history and outstanding invoices. Payments can be made with PayPal, credit card or bank transfer, and you can manually enter check payments into the system. Bill.com also can do automatic payment reminders and past-due notices to clients.

Bill.com comes with a couple standard templates for invoices, but you can create your own custom templates that include company graphics, default text, and so on. Setting up a recurring invoice is as easy as creating a standalone invoice. You can also customize the invoice payment website so it best reflects your company's brand. Information from Bill.com is synced in real time with your online accounting software, so as soon as an invoice is sent or a payment is entered, the information is updated in your accounting software as well.

Bill.com fills the niche for invoicing applications rather neatly. The interface is clean and easy to follow. For people on the go, there's a mobile app that lets you access Bill.com easily from a mobile device.

Toronto, Ontario
866-303-6061 phone
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Price: Free for three clients, $19.95 per month (25 clients); $29.95 per month (unlimited, single-user login). Additional users $10 per month each.

FreshBooks is a standalone cloud-based invoicing accounting application for businesses of 10 people or less. It integrates with a number of online accounting packages, including Peachtree, Outright, IAC-EZ, inDinero and Teaspiller. You can also import and export information in CSV and Excel files.

The web interface for FreshBooks has a casual, easy-to-use feeling that's very comfortable. Entering an invoice is straightforward. One attractive feature is that you enter a client's country as part of the client setup. FreshBooks remembers the information and automatically uses the appropriate currency and default country language. (Exchange rates are updated hourly.) Discounts are handled with a standalone discount percentage field. Emailing is done with your own email program rather than something through the website. Clients receive a link to the invoice portal, which can be customized with your logos, colors, and text. Because of FreshBooks' global emphasis, clients can make payments through PayPal, credit cards and bank withdrawals, and a number of others such as Authorize.net and eWAY (an Australian online payment system).

Setting up recurring invoices is similar to setting up a one-time invoice. For better customization, you can use dynamic variables to mention the month, quarter or year, so you could have a description like "February retainer" that would update each month with the current month. A small thing, but it automates your recurring invoices while avoiding the appearance of them being impersonal. FreshBooks also has options for passing expenses on to a client, time tracking for projects (which makes billing clients that much easier), and creating estimates. Estimates use the same forms and procedures as invoices, but if a client accepts the estimate, you can then convert the estimate to an invoice and send it out.

One of the differentiators for FreshBooks is the number of reports you can print. There are general bookkeeping reports such as P&Ls, balance sheets and aging invoice reports such as item sales, invoice details and revenue by client or staff, and timesheet reports including estimated billing and summaries by user and task. There is an iPhone app and a third-party BlackBerry app for FreshBooks.

FreshBooks has a strong commitment to providing excellent customer support. There are free orientations for new users and customer support is always free. The goal is to answer the phone within four rings. On the fifth ring, it kicks over company-wide and everyone in the company up to the CEO is trained in customer support.

FreshBooks is an easy-to-use full-featured invoicing package that is designed for dealing with a multinational clientele, service-based small businesses. Its many additional features make it a powerful choice.

Sage One
Lawrenceville, Ga.
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Price: $29 per month

Sage One
Sage One is an entry-level web-based bookkeeping/business management system for small businesses. It replaced Sage Billing Boss, a web-based billing tool, this year. With Sage One, you can create and send invoices as well as track time, tasks, projects and expenses, manage your company's money and have teams collaborate.

Creating an invoice is uncomplicated. You can select from existing clients and products, service billable tasks or add new ones from the invoice screen. When you've completed the invoice, you can use the Sage One internal email to send it to the client as a PDF file. There is currently no portal for users to view their invoices or to pay them. Payments are entered manually. The invoice lists use color-coding to show which invoices are overdue. Rebilling can be done easily by clicking to re-send the invoice to a client.

Sage One uses a dashboard interface for the various features and functions. As part of the project management feature, you can track time and expenses for a project, then bill the client for these costs. Sage One also offers several basic bookkeeping reports. Unfortunately, there is very minimal product documentation. Figuring out what's available and how to use it is a challenge. There is a live chat feature, but this is not open outside of East Coast business hours.

Sage One is more than an invoicing application, but less than a full accounting application. This may make it the perfect in-between product for businesses with two or three employees that need something to keep on top of their cash flow and their invoices.

San Francisco, Calif.
(800) 411-9376
Wellington, N.Z.
64 4 819 4811
sales@ xero.com
Price: Business editions, $19 per month (five invoices), $29 per month (unlimited invoices); $39 per month (unlimited multi-currency invoices). Personal edition, $34 per year. (All prices include unlimited users and customer support.)

Xero is a cloud-based accounting package with a strong invoicing application built in. There are also over 115 product add-ons for CRM, ecommerce, inventory, time tracking, and many other features. There is some integration with other products and you can import and export data with .CSV, .TXT, and Excel files. The documentation is complete and easy to use.

Because this is a complete accounting package, there's more setup to do than with the other products in this review. You'll need some accounting and financial information before you begin. (There's a handy link that lists what you need for setup before you begin.) The invoicing options are the most detailed and flexible of any product in this review. You can specific specify page size and margins, font, font size, section titles, what information to display, logos, contact info, default terms, and a PayPal email. You can also set up multiple custom invoice templates.

Invoices can be emailed to a client as a link, a PDF file containing the invoice, or both. There is no default online payment method in the portal, but you can set up PayPal and other online payment options, after which, your customers can make payments to you online.
Xero supports a wide range of foreign currencies. Exchange rates are updated hourly, so your invoices and operations with other currencies will go at the current rate. You can also set up multiple tax rates for invoices. Customers can have individual discounts and other options assigned to them. In addition, there are apps for iPhone, Android, and BlackBerry users that let you access and use Xero from your mobile device.

The richness of the features in this product may make it too much for someone looking primarily for a standalone invoicing application, but Xero is a powerful tool for any company looking for an online accounting solution that supports invoicing.

Wave Accounting
Toronto, Ontario
(416) 521-9141 or 1-877-929-WAVE (9283)
This email address is being protected from spambots. You need JavaScript enabled to view it.
Price: Free (supported by advertisers).

Wave Accounting
Wave Accounting is a web-based accounting package that includes an invoicing feature. Although it doesn't directly integrate with other accounting software, you can import data from Microsoft Money, QuickBooks, Quicken, Simply Accounting and .CSV files. You can also export your data to an Excel spreadsheet or .CSV file. It's aimed specifically at small businesses, home offices, and freelancers who need the features of a small, simple bookkeeping solution without the hassles of using a larger, more complex accounting package.

Entering an invoice is pro forma: you set up the client information, select the payment terms, and enter the line items. You can set up multiple tax rates and select them for individual line items. (Taxes are shown separately in the invoice subtotals.) Invoices can be emailed via Wave Accounting's internal mail program, or printed and postal mailed. When you email the invoice, the customer receives an email with your company name on it. The email contains some information, the invoice total and a link. The customer can view the detailed invoice at the link, but there is no way from them to pay the invoice online.

There are some additional shortcomings with invoicing. You can only select a due date of on receipt, 15, 30, 45, 60 or 90. There's no option to specify a custom due date such as "December 31." Discounts are also difficult. You can enter a specific amount for a discount, such as $15.84, by adding a line item with a negative $15.84 amount, but you have to draft an invoice, get the invoice total, then manually calculate the discount and enter it as a manual line item rather than simply adding a discount percentage.

Perhaps the biggest problem with Wave Accounting is that it's hard to use. The website is confusing and it doesn't have many tools for finding where you need to go. Tracking down features and options is not easy. The only documentation is a series of FAQs and tips. There is, however, good customer support available (also free) and a strong, active user base, so you can usually get your questions answered quickly.

Wave Accounting is completely free. You can send unlimited invoices and use the accounting software in any other way at no charge. When you're logged into your Wave account on the website, small, well-mannered ads appear on the screen with offers for Wave users. The company makes money from purchases through these links and keeps the software free to users. Although this may not be enough to overcome its minimal invoicing features, it certainly makes it worth trying out.

The invoicing applications in this review range from very simple standalone products to full online accounting systems that happen to do invoices as well.

One of the things that makes these products a step up from dashing off an invoice in Word is that they all make invoice calculations easy. There's far less chance of math errors. Products and services are all standardized, so you can select the right line item and be confident that the pricing and tax information will be the same. Moreover, even the applications that don't have an online payment option still make it easy to send the invoice out to a client directly using stored information.

If your business is sending out as few as two or three invoices a month, you may want to start looking at invoicing applications. Chances are good that you can save time and eliminate invoicing errors for little or no money.

John Hedtke

John Hedtke is the award-winning author of 26 books. He has more than 30 years in the software business and technical writing, and seven years in technical publications management. John has developed and written documentation and books for many leading software products, and has received 26 writing awards to date. (A complete list of books, articles and projects can be found online at his web site, www.hedtke.com.) John owns a company that offers writing, business, and disaster preparedness consulting services for private, public, and governmental clients. He became a Fellow of the Society for Technical Communication in 2003. When not otherwise occupied, John writes magazine articles and sleeps late as much as possible.

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