The Top Billing Software for Small and Medium Businesses — and How to Choose the Best One for You

Running a business means keeping a lot of juggling balls in the air. It’s managing products and services, ensuring customer satisfaction — and most importantly of all, making sure that your clients are paying you on time.

Coordinating a streamlined and efficient billing process is a major challenge for both emerging and established businesses. But with a comprehensive billing software solution, you gain access to a wide variety of useful tools and shortcuts that strengthen your cash flow, minimize billing errors, and free up valuable time for other business activities.

In this post, we’re going to explore why your choice of billing software is such an important consideration, the capabilities you should prioritize, and the top solutions in the marketplace.

What is Billing Software?

Billing software refers to a software platform that gives medium and small business owners the ability to track billable products and services. It’s often bundled in with other programs, such as accounting software, but can also be offered as a standalone service.

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Billing software automates many repetitive workflows associated with the billing process to minimize manual tasks, enabling higher productivity. Most programs will offer a range of functionalities depending on the pricing structure, including:

  • Time tracking employee hours for billing purposes
  • Online invoicing (generating/sending templates)
  • Setting custom payment reminders and schedules
  • Time tracking for client projects
  • Online payment processing (credit card, PayPal, ACH, multi-currency)
  • Analytics and reporting e.g. cashflow, late payments, expenses

Top Billing Software Solutions in the Market

Now that we’re clear on the fundamentals, let’s look at some of the most popular billing software solutions for small and medium businesses. They include:

Zoho Invoice

Zoho is the perfect option for businesses that only have a small budget for business software. Why? Because it’s a free service. In addition to being one of the best invoicing software programs, Zoho offers project management and expense tracking capabilities. One of the best features of Zoho Invoice is the ability to create a portal for each client with its own unique login, allowing you to share information with customers with full transparency.

Pros:

  • Recurring invoicing features
  • The interface is easy to navigate
  • Advanced customizability

Cons:

  • No offline mode
  • Few integration options

Pricing: Free

Quickbooks Online

A cloud-based billing platform, Quickbooks is a great option for businesses who want to access information on the go and sync information across devices. While it does offer the ability to create custom invoices, Quickbooks is more of an accounting than an invoicing software. Quickbooks also has a 60-day moneyback guarantee, which is an advantage for businesses who are unsure whether they want to commit.

Pros:

  • Cloud-based platform prevents data from being lost
  • Easy integrations via REST API with third-party software
  • Strong expense tracking features

Cons:

  • Limited reporting functionality
  • Less intuitive interface

Pricing: Quickbooks offers four different pricing plans, with their basic billing solution starting at $25 a month. Higher pricing tiers include the ability to manage multiple users, track time spent, and advanced analytics.

Xero

Xero is a combined billing and accounting offering that offers businesses a large number of native integrations with business and financial platforms. It offers some of the most robust payment options in the market, enabling automated payment reminders to save valuable administrative time. However, it is one of the more expensive billing options, so you need to be sure that you’re going to utilize the features offered in the higher-level plans.

Pros:

  • Payment integrations with PayPal and Stripe
  • Fully-integrated mobile app
  • Live chat support

Cons:

  • A limited basic plan
  • Difficulty generating 1099 forms for independent contractors and freelancers

Pricing:

Starts at $11 per month for a basic plan. For analytics and multi-currency options, businesses will need to upgrade to one of their two higher plans.

FreshBooks

FreshBooks is by far one of the most popular billing solutions on the market, and it’s not hard to see why. Designed to cater to rapidly-growing small businesses, FreshBooks offers quality integrations with Stripe, Shopify, PayPal, in addition to a mobile app available on both Android and IOS. It offers time and expense tracking, invoicing, automated payment reminders. Businesses also have access to a 30-day free trial.

Pros:

  • Ease of use
  • Great expense tracking capabilities

Cons:

  • Beginner plan only allows you to send invoices to up to five clients
  • Invoice customization is limited

Pricing:

Starts at $15 for the lite plan, with a custom ‘select’ plan also available for businesses with more specialized needs.

Why Does Your Choice of Billing Software Matter?

Billing software might feel like a very uninteresting purchase. But it’s one of the most important administrative decisions you can make as a business.

Why? Because billing software determines the workflows you use to organize your professional invoices, project management, and payment processing. Depending on the level of customization and automation your billing and invoicing solution offers, this can have a big impact on the profitability of your business.

Your choice of billing software can affect the following capabilities:

Keeping all of your billing information in one place

If you’re having to use separate accounting and invoice software to manage your billing, this becomes a lot more time-consuming to manage effectively. Your staff will be constantly bouncing from one interface to another to view and update information, such as accounts payable or expense tracking. This makes it difficult to get a proper overview of business activities — and may result in outstanding payments being missed.

With an all-in-one billing solution, you can see all important billing information on a single dashboard in real-time, or even on the go via a mobile app. This helps to streamline your workflows and be proactive in identifying potential billing issues.
Automating your communications

Keeping track of invoices and accounts receivable is a full-time job for many small businesses. When you’re juggling a full roster of clients, it’s very easy for communications such as emails to slip through the cracks.

By choosing an automated billing solution, you no longer have to dedicate hours each week to chasing up clients. You can automate follow-ups via email or SMS, or automatically schedule your calendar in advance with phone calls to clients who’ve yet to respond. You can even embed unique links within customizable invoices to make the payment process as frictionless as possible; your clients will certainly thank you for it.

Easy auditing

Having to do a surprise audit for tax purposes or legal reasons is an unavoidable part of doing business. But there’s nothing worse than having to compile financial information from across multiple spreadsheets because you don’t have a system that can auto-generate reports.

This takes up valuable staff time and adds considerable friction to business activities. But it’s entirely avoidable with a robust billing software solution that makes auditing easy and painless.

Better customer relationships

If a client doesn’t receive confirmation that a payment has been received, this can provoke anxiety that a payment hasn’t been processed. Moreover, not even getting a simple ‘thank you’ is hardly going to strengthen customer relationships.

When interactions with your clients are seamless and transparent, this promotes trust and more profitable relationships because clients feel comfortable doing business with you. Billing software helps you to manage the customer experience much more effectively as a form of CRM (Customer Relationship Management). If customers always understand where they’re at, this helps to reduce customer churn.

Valuable analytics

Excel spreadsheets might be excellent for recording data, but they aren’t the best at expressing insights. For example, if you wanted to know the average time it takes for a client to pay an invoice (and whether there are repeat offenders at paying late) you’re going to have to spend considerable time crunching numbers, which isn’t an effective use of staff time.

There are also other important metrics you should be tracking, such as:

  • Average monthly/weekly revenue
  • Rate of failed payments
  • Percentage of overdue invoices
  • Accounts receivable turnover ratio
  • Which payment options are most popular

This is where billing software can be your most valuable tool in getting high-level insights and measuring the performance of your business — but only if you choose a program with the right capabilities.

What to Consider When Choosing a Software Provider

Here are some questions to ask to determine the right billing software for your business.

1. Do you require a general billing solution or a more specialized one?

There’s a massive number of software offerings out there — far too many for your business to explore independently. That’s why it’s a good idea to decide right off the bat whether you’re looking for dedicated practice management software or something more generic.

Some industries, such as medicine and legal, have very specific needs when it comes to billing and invoicing features. Likewise, companies in the SaaS space may need additional functionalities due to their pricing structure.

If a basic bookkeeping offering is unlikely to tick the boxes for you, it’s important to rule these out at the start to streamline your search.

2. What customer support is available?

Migrating to a new billing system can cause a lot of disruption, especially with transferring existing data. It’s important to check what level of customer support a software provider is offering, both during the initial onboarding and afterward.
For example, some providers will offer self-service implementation only, while others will give you a representative to guide you through the process. This will usually be reflected in the pricing, so you need to think carefully about how much support you’re likely to need.

Here are some other questions to consider when vetting software providers:

  • How long will onboarding take for an organization of your size?
  • What contact methods are available? i.e. email, live chat, phone
  • How comprehensive is their documentation?
  • What time zone their customer support team is located in?

3. How easily does it integrate with your existing systems?

It’s quite likely that you’ll be using other business systems alongside your billing software. This could include a dedicated CRM, payment gateways, invoice templates and/or task management platforms that help you to collaborate across teams. The ability of a software offering to integrate seamlessly with your existing programs and workflows is essential to prevent data from having to be duplicated across systems, which increases the likelihood of billing errors.

If you’re using a popular program such as Salesforce, many billing software options will offer a native integration. If not, check the API documentation to see whether you can build an integration in-house without too much development work.
Note: If you’re interested in a solution with a mobile app, make sure that it’s offered on both IOS and Android.

4. How user-friendly is it?

This might not seem like a very important consideration, but the ease of using and training staff on new billing software can determine how well you’re able to maximize this investment. If lengthy tutorials are required, this adds friction to the transition and increases the likelihood of costly billing mistakes. Moreover, if your software isn’t intuitive to use, this may result in your business only using the most basic functions, rather than advanced customization capabilities that allow you to gain more insight into business activities.

5. How scalable is the software?

You don’t just want to be looking for a billing solution that works for you at the present time, but one that’s capable of handling increased demand as your business grows. Otherwise, you may end up needing to transition to new software within a short timeframe, which is highly disruptive to business activities.

Small businesses, in particular, may find themselves experiencing rapid phases of growth with little warning, so it’s a good idea to choose a billing solution that offers multiple pricing plans up to the enterprise level. This way, you can simply switch to a larger plan that supports a higher number of users when necessary.

The Steps to Take When Shopping Around for a Billing Software Solution

Compare pricing vs. features

Billing software comes at a variety of different price points, so it’s important to drill down into each of your options to understand what features they do or don’t include. The most expensive monthly fee doesn’t necessarily offer the most comprehensive solution.

A tool like TrustRadius makes it easy for your businesses to make a side-by-side comparison of different billing software to understand their strengths and weaknesses at a glance. You can select from a variety of comparison metrics including usability, implementation, and online training to help you select the most complete cost-effective for your business.

Look at customer reviews

There’s only one way to get a true “warts and all”’ perspective of different software options; by finding out what users themselves have to say. A whopping 93% of consumers say that online reviews influence their purchasing decisions. Why? Because we trust what consumers have to say about a product or service more than the business offering it.

Online reviews are a brilliant way to get authentic and honest feedback about different platforms, including the pros and cons, best features, and other miscellaneous information that helps you to decide between options.

Research what billing solutions other businesses in your space are using

If you require a more specialized billing solution, there’s likely to be an industry standard that’s considered to be the most reputable system. It’s always a good idea to ask around your industry contacts to find out which provider has the best track record (and also the ones you should avoid).

For regular billing software, have a look at their case studies to see which industries or company sizes are the most represented. This will give you a good idea of whether they’re a good fit for your needs.

Get a demo

Most software solutions will offer a free plan or demo that allows you to navigate the interface directly. It’s a great idea to walk through this demo with the staff members that will be using your billing software, as their perspective on ease of use will help to decide whether it’s a viable option.

If the provider offers a guided demo, this is a great time to ask questions about the program’s capabilities and to explain what your needs are so they can recommend the appropriate plan. Proper demos do take quite a bit of time, so it’s worth saving this experience for your top two or three options.

Final Words

Choosing billing software can be a real headache for businesses. When there are so many diverse options out there, it’s easy to worry about making the wrong decision. But by following the steps we’ve outlined in this post, you’ll be well on your way to choosing the billing solution that’s perfect for your needs.

To learn more about how the Stax all-in-one platform can help your business, fill out the form below to request a savings estimate today.

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