22 July 2015 10:00
How to choose the right invoicing software
In Terry Pratchett's Wintersmith, one of the characters "read Principles of Accounting all morning, but just to make it interesting, he put lots of dragons in it".
You might feel the same when trying to decide which invoicing software to choose for your business. Read this simple five step guide and you'll hopefully have an answer!
1 Needs analysis
You can only solve a problem once you know what's causing it. What exactly is costing your business time and money? Late customer payments? Cash flow problems? Endless meetings with your accountant? Unclaimed tax and expenses?
You don't need a comprehensive list of every minute and penny spent. But a needs analysis will give you a fair idea of where most of your resources are going when it comes to business finances. You can then decide which solution will solve it.
2 Invoicing or accounting?
Invoicing software allows you to create, send and manage invoices. This may well be what you need if you're struggling with overdue payments, a lack of liquidity or keeping track of what money is where.
Accounting software provides a more comprehensive financial overview of how your business is performing. It automatically logs the flow of money in and out of your business. It provides reports for anything from VAT through to expenses and mileage. It acts like a virtual accountant.
3 Freemium or premium?
There's an overwhelming amount of providers out there. So make sure you look beyond any marketing and fancy branding, and decide what's best for you and your business. The free offerings have their uses, but also limitations. They might have their logo on your invoices, or restrict you to a limited number of users or invoices per month. Some lack key features such as recurring payment tools.
Paid packages start from as little as few pounds a month, so if you're serious about managing your business finances, you might want to explore this option. You'll certainly notice the difference.
4 Test the water
You can try most invoicing software options on a free trial. This is great way to test out the functionality of a product and see which one you like best. A deciding factor could well be ease of use.
5 Change is good
Many industries make it difficult for you to change providers (think energy companies or phone networks). Even if there is a better offer elsewhere, it is often expensive or complicated to change. But this isn't the case with invoicing software. If you start with one solution and then discover a better offer elsewhere, it's easy to make the switch. You can migrate all your data with a few simple clicks, and pick up where you left off straightaway. This way you can stay with a service for the right reasons.
Hopefully these tips make it a little easier to decide what invoicing software to go for – even if they don't mention any dragons.