Small businesses save time and get paid faster with online invoicing, or electronic invoicing. There are many reasons why businesses switch to a digital form of payment and there are many different payment forms to choose from. Though digital payments are the new cashier, there are both pros and cons to this payment method. It’s important to consider how online invoicing works and what the pros and cons are as it may not be the best payment method for the type of business you run.
As a business owner, you must find ways to make your business run more efficiently. For some, online payments may be a game-changer. They are convenient for customers and clients and lead to an increase in the efficiency of your business.
Continue to read this article to learn more about the pros and cons of online invoicing, how it works, and if it will benefit your business.
How Do Online Invoices Work?
Online invoicing allows businesses to send invoices to their clients and customers electronically. Customers are sent an invoice with built-in payment options where they can pay for their invoice themselves. Online invoices are easier to document, keep track of, and provide businesses with payments in a quick manner.
There is online invoicing software that provides you with a selection of invoices to choose from based on your business type. Many online invoice software allows you to edit the template so it best suits your business. Once you are content with the invoice template, you can incorporate it into your business as a method of payment. Depending on the invoice software, you can email the invoice directly to the client or customer. Some software, such as Transact, allows you to text the invoice directly to the client, and they are able to pay from there.
Additionally, there is online invoicing software that comes with extra features that benefit the company. While some function as a method of payment, others also track and record expenses, send reminders, sort out paid and unpaid invoices, and offer a recurring billing system.
What Are The Pros of Online Invoicing?
There are many pros of online invoicing for your business, especially in today’s day and age. Here are the pros of online invoicing:
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- Accounts receivable: Allow customers to purchase now and pay later.
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- Quicker payments: Receive payments instantly
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- Record keeping & Reminders: Keep track of all invoices and send reminders to customers/ clients regarding their bill
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- Time efficient: Saves your business time
What Are The Cons of Online Invoicing?
There are very few cons of online invoicing, however, it’s important to consider the following as online invoicing may not benefit all businesses:
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- Fees: Some online invoicing software require a fee for their services
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- Preference: Not everyone prefers online invoicing, especially the older generation that doesn’t know how to use technology. Some people will avoid your business when they are informed about online invoicing. Consider both in-person and online payments if you have found that customers prefer either or.
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- Spam: Sending online invoicing directly to someone’s email may get lost in their spam folder, and will result in further issues.
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- Hackers: If you invest in online invoicing software that sends invoices via email, you will run the risk of hackers accessing clients’ and customers’ personal billing information.
Online Invoicing Resources
Before jumping into the first online invoice software you discover, do your research and decide which one would best fit the needs of your business. A web design invoice template will look a lot different than a construction invoice template. Here is the best online invoice software to consider.
Transact Invoice
Transact is free and is accounts receivable. It allows businesses to instantly send and collect custom invoices via SMS without the requirement of creating an account. It also has reminder and record-keeping integration. It is best for both small and large businesses.
Zoho Invoice
Zoho Invoice is free software that will be best for small businesses. Their invoices are customizable and clients and customers can set up recurring payments.
Freshbooks
Freshbooks is online invoicing software that also integrates accounting. Businesses can custom their invoice design and send reminders to customers/clients. Freshbooks does have a monthly fee.