The Best Billing and Invoicing Software buyers guide by Inspector Jones

Basic functionality

All of these tools will help you create invoices, retrieve and track overdue invoices. Some companies, such as ZenCash, also offer a managed service with accounts receivable assistance.

• Generate and send invoices: For ease of communication with clients, choose a tool that can easily generate invoices in different file formats (PDF or HTML is best), and automatically email to the client.
• Branding and customisation: For professional-looking documents, you may want to make your invoices, estimates and billing statements fit in with your brand. At a minimum, you will want to include your logo, however many vendors include far more advanced customisation options.
• Integration with payment system: To minimise your time and effort, look for a tool which automates the payment of invoices. Most tools will integrate with common online payment systems - like Paypal, Google checkout and Authorize.net.
• Reporting and analysis: To minimise unpaid invoices, most systems have the ability to report on ageing invoices, or delinquent clients and clients that are in good credit standing.
• Integration with other systems: Look for tools that have pre-built integrations with your CRM, accounting, sales management and/or project management tools. For more advanced uses, you might prefer to build your own interface - in which case, look for a comprehensive and well-documented set of APIs.

A note on Customer Relationship Management

You may already have a customer relationship management (CRM) system, and I highly recommend you find a tool that integrates to keep client lists, addresses and other information up-to-date. If you don’t have a CRM solution, look for a with client management functionality. At a minimum, look for functionality to manage a list of all your clients and all the information you need for invoicing. Some applications have a more advanced client management module – they offer custom fields for client records, tracking interaction, client portals and related reports.

Advanced functionality

For more complex businesses, or if you've got specialised needs, I recommend you look for:

• Audit trails: Particularly if you will have multiple users accessing the same system, look for a record of all data entry, and the corresponding user, date and time.
• Multi-currency support: Some systems provide basic foreign currency conversions, while others such as SpringAhead use the exact spot rate in conversion, making your expenses more accurate. These vendors provide invoicing using different currencies: Invoice Machine, Spring Ahead, Blinksale, Ronin, Saasu, Kashoo and Xero.
• Multi-language support: If your business requires sending out documents (like invoices, estimates, bills, and receipts) to clients in different countries, you should consider a vendor which has the ability to customize and change the language of the reports and documents available in the system. I recommend you look at Zoho, which includes multilingual capability.
• Recurring Transactions: A few more advanced invoice and billing system have the facility to setup recurring billings and repeat invoices. This feature is targeted towards businesses with recurring clients and those who have repeating transactions. SnapBill, Freshbooks, Invoicer and Zoho have this capability. See our review for subscription billing for more information.
• Tax handling: Since invoicing and billing clients require tax for most countries, consider a vendor that offers flexible tax calculation handling. If your business deals with customers and vendors from different countries, look for tools which allow you to setup and calculate complex tax arrangements.
• Client portal: Some tools, like Paymo, offer client portals for your business. These enable your clients to view and manage their own records, which can reduce your effort.