Each business has to handle its finances which include invoicing and bookkeeping in most cases. It can also include estimation of taxes, expenses, and billing from clients, which is the key feature in every sustainable and profitable business.
With the tendency of growth in all online businesses, as well as the increment in the number of freelancers and independent contractors, the need to have the right online tool or software to help with invoicing and bookkeeping is getting more stronger.
But when is the best time to get rid of the endless spreadsheets and docs in the cloud and start using a tool that can save you time, make you seem professional in-front of your clients and help you get your finances in a row?
Each and every one of us has started doing their invoices the hard way – the traditional way. In the beginning, the accounting needs to be simple and easy. All you need is a good knowledge of MS Excel, Mac Numbers, or Google Sheets. But as your business grows your accounting and invoicing becomes more complex. And you need more time to do it by yourself and it is a risk for potential mistakes while doing it.
Then comes the need to research and try out invoicing tools or accounting software or maybe both.
Here are several points to keep in mind on why you need an invoicing tool or accounting software:
- If you create invoices, you need an invoicing tool. That’s the only way you can benefit from features such as recurring invoices and automatic payment reminders.
- Invoicing software is very affordable. Some invoicing tools start from 0$ – 20$ per month depending on the features they offer.
- When looking for “Accounting Software,” keep in mind to look for “double-entry accounting” or “double-entry bookkeeping” feature. If the software does not have that it’s an accounting software.
But what if you are a freelancer that has only a few clients. Or you just started your business?
Here are some criteria to have in order to qualify to use an invoicing software or tool:
- You don’t have inventory.
- You don’t have any payable account – like stuff you haven’t paid but you are going to soon
- You are a one-person business and you don’t have any employees
Invoicing tools bring a lot of benefits for your business. Here are some of them:
- They have fewer features and are simpler to use
- Better value for money. Usually, they are much affordable for starting businesses
- You can be paid faster especially since most invoicing software allows you to receive online payments via services like Payoneer, PayPal or Stripe
- Accounting software can be hard to manage and confusing if you don’t have an accountant knowledge.
- You will be more organized and you will look more professional in front of your clients
- You can collect automatic payments and sales information
- You will save time and resources used for traditional invoicing
- You can send invoices from everywhere and have secure data
So do you use accounting software, invoicing tool or you do your invoicing the traditional way? Let us know!