A pressing concern of business owners and managers is how to reduce the time and cost spent on internal processes like billing and invoicing. Invoice tracking templates or manual entries are still practiced by some businesses to serve the purpose. But are these methods efficient enough to save you time and money?
Besides accounting errors and your relationship with clients, the kind of invoice tracking system you use is a key factor that increases or decreases the cost of invoicing. According to an estimate, it lies somewhere between $15 to $40 per invoice.
To stay at the lower end of this scale, businesses are turning towards invoice tracking software to manage invoices from when they are sent until they get paid.
This blog will discuss why you need invoice tracking software and how to choose the best solution from the available options.
- Invoice tracking software is essential for efficient finance management and reducing costs.
- Manual methods like templates or manual entries are time-consuming and inefficient.
- Invoice tracking software streamlines the process, reducing manual efforts and improving cash flow management.
- It enhances organization, minimizes errors, and improves credibility with clients.
- Top 5 invoice tracking systems: timegram, Invoice Ocean, Square Invoices, Invoice Generator by Invoiced, and Harlow.
- Implement best practices: establish clear invoicing and payment processes, train employees, ensure data accuracy, and regularly review and update the tracking system.
What are the Benefits of Using Invoice Tracking Software?
Invoice tracking is a tiresome process that often poses challenges to efficient finance management and consequently impacts the success of any organization. It involves keeping tabs on invoices, managing payment processes, and ensuring timely payments.
These tasks are time-consuming and may incur additional expenses, especially for small and medium businesses. Invoice tracking systems greatly help stream these repetitive yet crucial tasks. These systems offer a range of benefits that contribute to improved financial operations and overall organizational efficiency.
Let's explore some of the key advantages:
Reducing Manual Efforts
Instead of relying on time-consuming manual methods, such as paper-based invoicing or spreadsheets, businesses can leverage the power of technology to generate, send, and track invoices quickly. An efficient invoice tracking system can create bills by customizing inbuilt templates with a few clicks, increasing productivity, and freeing up resources for more strategic financial activities.
Improving Cash Flow Management
Late payments can significantly impact a business's cash flow and hinder its financial stability. An invoice tracking system helps address this issue by providing real-time visibility into payment statuses. With automated tracking and notifications, businesses can promptly follow up with clients on outstanding payments, reducing the risk of late or missed payments.
Moreover, by tracking clients' payment history and patterns, businesses can identify potential late payers in advance and take proactive measures to ensure timely payment. By optimizing cash flow, it helps businesses improve liquidity, and maintain a healthier financial position.
Enhancing Organization and Minimizing Errors in Invoicing
Manual invoicing processes often risk errors, such as incorrect calculations, duplicate invoices, or missing information. These errors are minimized through a centralized platform for creating, managing, and tracking invoices. The system can automatically populate relevant information, such as client details, payment terms, and product descriptions, reducing the chance of human errors.
The automated software can also generate detailed reports, allowing businesses to review and reconcile invoices easily. This enhanced organization and accuracy not only improve the credibility and professionalism of the business but also contribute to stronger relationships with clients based on accurate and transparent invoicing practices.
Top 5 Invoice Tracking Systems
Here’s an overview of the top 5 invoice tracking apps for 2023:
timegram is a powerful time tracking and project management solution that offers a range of features to simplify and speed up the invoicing process. It provides an incredibly easy invoice tracking system that integrates with the solution’s automated time tracking functionality. It tracks billable and non-billable hours spent on tasks and effortlessly converts them into accurate invoices.
Using timegram for tracking invoices improves accuracy while eliminating the tedious and time-consuming task of manually logging hours worked on paper or in spreadsheets. Organizing and reconciling different billing rates is no more a hassle for accounting and payroll management. You can generate invoices that reflect the time and effort invested, avoid the risk of inaccuracies, and gives opportunities to increase cash flow by focusing on tasks that earn you better hourly rates.
It makes the whole process a breeze, the solution shows a clear breakdown of billable items categorized under projects or clients. You can create invoices within 30 seconds and download them in PDF for sharing with clients.
timegram.io focuses on transparency that boosts your customer relations and trust by removing any chance of discrepancies. It is also the only software that balances employee concerns about fair compensation without invading their privacy.
Additionally, its reporting feature allows you to see estimated vs. actual time, which improves resource management and utilization for future projects.
timegram.io has a free forever plan that provides access to all the product’s features. There is also a paid plan, which is for $8/month/user.
2. Invoice Ocean
Invoice Ocean is a user-friendly online invoicing software that offers a range of efficient features for generating professional invoices quickly. With its auto-completion and pre-defined VAT rates, you can create accurate invoices with a few clicks. The platform also allows for easy input of client information, making the process seamless.
The app’s top priority is ensuring that all sensitive data and transfers are encrypted and protected. This gives managers peace of mind knowing that their financial information and clients' money are secure.
One drawback could be the lack of a built-in time tracking feature, which it compensates with its integrated payment option. The recurring invoices option automates sending invoices on specified dates. The interface is user-friendly, and the layout of the invoices is basic yet effective.
It offers a free 30-day trial period before choosing a package. Pricing starts at $7.20/month.
3. Square Invoices
Square Invoices is a versatile cloud-based invoice and billing management solution suitable for small businesses and growing enterprises. It offers a user-friendly platform for creating and tracking invoices, accepting payments, and managing contacts. With real-time tracking, you can easily monitor the payment status of your invoices, send reminders, and receive payments.
Paid plan users can enjoy customization options, such as adding custom fields and setting up milestone-based invoices for longer projects. While Square Invoices caters to service-based businesses, it is also suitable for product-based businesses, offering the flexibility to accept payments online or in person.
While it offers a free plan, most useful features are available only in the paid plan. Pricing starts at $20/month with additional charges for each payment.
4. Invoice Generator by Invoiced
Invoice Generator by Invoiced is a straightforward web-based tool that allows you to create professional invoices within minutes. Its minimalistic and easy-to-use interface makes it perfect for users who simply need to generate invoices without additional features. The intuitive design follows the standard invoice format.
Creating an invoice is as simple as filling in the form, adding a thank you note, and sending it directly or downloading it as a PDF or XML file. Invoice Generator provides a history section where you can track your invoices. However, it's important to note that the invoices are stored in your browser, not the cloud. Clearing your browser's history will result in the deletion of all stored invoices.
To ensure safer bookkeeping, it is recommended to download your invoices to your device or export your entire history as a CSV file.
Invoice Generator by Invoiced is a reliable solution for freelancers and users who require a quick and hassle-free way to generate invoices. While pop-up ads and banners might be a putdown, the clean and consistent design ensures a professional look.
For small businesses, pricing starts at $39/month, including only basic features.
Harlow is a great invoice tracker software for freelancers who want to streamline their business operations. This all-in-one platform is equipped with a wide range of features, including automated invoicing, professionally designed proposal templates, and various other capabilities that enhance efficiency and elevate the professional image of freelancers.
With Harlow, freelancers can save valuable time and maintain an organized workflow, allowing them to focus on their core business activities. The platform acts as a centralized hub, enabling freelancers to organize and manage their daily operations, gain a comprehensive view of their clients, and ensure timely payment for their work.
It offers invoicing capabilities, time tracking, proposal and contract templates, task and project management, client management, and more. It provides everything freelancers need to establish a smooth workflow and boost productivity.
Harlow offers a free 14-day trial before making a commitment. Pricing starts at $29.00/month.
(Reviews are based on user feedback from G2, Catperra, and Software Advice)
How to Choose the Right Invoice Tracking App
Wondering which one of our top picks should you choose? To be honest, there is no one size fits all invoice tracker app that beats the others in terms of overall performance. Every business has particular requirements, and every app has unique features. Your selection depends upon your budget and what features you are looking for within that range.
Pricing is an obvious concern when choosing a billing tracker. Evaluate the pricing structure of the software and determine whether it aligns with business needs and gives you value for money.
Some invoicing apps offer a free or low-cost plan with limited features, while others have tiered pricing based on the number of clients or invoices. Consider the scalability of the pricing plans and whether they offer additional features you may require as your business grows.
Take the time to evaluate these apps and other options to make an informed decision.
Implementing an Invoice Tracking System: Best Practices and Tips
Once you have implemented an invoice tracking system, you must establish the best practices to use it effectively. Here are some tips to remember for setting up and maintaining an invoice tracking system:
1. Establishing Clear Invoicing and Payment Processes
Define clear invoicing and payment processes to ensure consistency and avoid confusion. Determine when and how invoices should be generated, how payment reminders will be sent, and what actions to take for late payments. Communicate these processes to your clients and ensure they understand their responsibilities and deadlines. Clear communication reduces payment delays and disputes.
2. Training Employees and Ensuring Data Accuracy
Provide comprehensive training to your employees on using the invoice tracking system effectively. This includes entering data accurately, generating invoices, and managing payment records. Emphasize the importance of data accuracy to avoid errors that can lead to payment delays or financial discrepancies. Regularly monitor and review data to identify and correct any inaccuracies promptly.
3. Regularly Reviewing and Updating the Tracking System
Invoice tracking systems should not be set up and forgotten. Regularly review the system's performance and assess its effectiveness. Seek feedback from employees and clients to identify any pain points or areas for improvement. Stay updated with the latest software features and updates to maximize its potential. Consider incorporating automation and integration with other tools to streamline your invoicing process further.
The Takeaway: How to Improve Business Processes with an Invoice Tracking System
Implementing an efficient invoice tracking system can be a lifesaver if you want to reduce costs and improve cash flow management. Manual methods of invoice tracking, like templates or manual entries, are time-consuming and prone to errors. On the other hand, invoice tracking software streamlines the process, reducing manual efforts and improving organization.
Businesses can make the process more effective by choosing a comprehensive productivity tool that provides all the essential features for project management.
Time-tracking software like timegram does just that! It offers:
- Automated time tracking without invading privacy
- Converting hours worked into accurate invoices
- Estimated vs. actual time worked
- Clear breakdown of billable time
- Accommodating different billing rates
- Integration with popular apps
Managing all processes from a single platform helps businesses minimize errors in invoicing. Additionally, it contributes to enhanced organization, improved credibility with clients, and stronger financial operations.
When choosing an invoice tracking system, it is important to consider features that align with your business needs AND the value for money.
By following the best practices with timegram, you will be on the most cost-effective way to optimize your invoicing and finance management.
How do small businesses keep track of invoices?
Traditionally, small businesses would use spreadsheets or templates to record and organize invoices manually. However, this method is time-consuming and prone to errors. Using invoice tracking software is more common now to keep track of invoices. These software solutions provide a centralized platform to generate, send, and track invoices, ensuring timely payments. Invoice-tracking software streamlines the process by integrating it with time-tracking data. It improves cash flow management, minimizes errors, and enhances organization for small businesses.
What’s the difference between an invoice template and an invoice generator?
An invoice template is a pre-designed document that provides a structure for creating invoices. It typically includes sections for necessary information such as business details, client information, an itemized list of products or services, and payment terms. While an invoice generator is a tool or software that automatically generates invoices based on the pre-populated information. It eliminates the need to manually input details by generating invoices quickly and accurately, saving time and effort.
How do you ensure billing accuracy?
You can ensure billing accuracy by following the best practices, such as;
- Improve and automate the recordkeeping system
- Implement a centralized system to track all transactions
- Train your employees
- Monitor your invoicing process
- Take regular feedback from clients