For any small business, the odds against financial success are stacked against you. By year six, for example, there’s roughly a 60% chance that your company will be out of business. Surprisingly, the primary reason small businesses fail isn’t that they don’t have a viable business model, but rather that they fail to promptly collect all of the money they are owed. In fact, according to a Dun & Broadstreet study “90% of small business failures are caused by poor cash flow.”
So what if I told you that you can dramatically decrease your overdue accounts receivables, while simultaneously saving your business time and making your company look more professional to clients? It’d be an obvious win of course.
Yet despite that, a majority of small businesses still rely on sending out client invoices via US mail that they’ve generated via Excel or MS Word. And even those that do use email to send invoices often don’t allow their clients to pay instantly via the invoice, which also has a demonstrable negative impact on accounts receivable.
In this article, we’ll highlight a few leading free software products that small business owners can use to start sending more professional invoices, save time, and help reduce their overdue accounts receivable issues.
Free Invoice Maker
For some businesses, accepting payments via credit or debit card isn’t realistic or even ideal. Moreover, they may only have one or two customers to send invoices to each month and therefore even the hassle of setting up a free invoicing software platform seems like overkill.
If that describes your business, consider using Free Invoice Maker. It’s just that, a website where you can quickly enter your customer’s invoice data and have a professional looking invoice auto-generated in PDF format, and ready to send out. You can choose from a few different invoice formats, upload your company logo, and make a few other customizations.
The benefits are that this is completely dummy-proof, and requires no commitment or even a signup by the business owner. The downsides are that you can’t accept payment via your invoices, and you won’t get any reporting or tracking abilities. If you do sign up, (which is still free) you’ll have the ability to accept payments via PayPal (unfortunately that’s it in terms of payment acceptance options), and you won’t have to have any Free Invoice Maker branding on your invoices.
In sum, this is a great option for super small businesses that want a step up from sending Excel or Word based invoices, but don’t need much by way of reporting nor the ability to accept payments via their invoices.
If you’re dealing with sensitive customer data, or you’re a savvy techie that wants the ability to create a truly custom invoicing solution, Fusion Invoice is perfect for you.
Fusion Invoice is a completely open-source free invoicing platform. Unlike other invoicing solutions that host your data for you, with Fusion Invoice you download the software and keep your client’s data on your own server. That could be particularly attractive to individuals who work with highly sensitive client data and feel they can secure that data better on their servers rather than trusting it to a third party.
In terms of functionality, Fusion Invoice out of the box has the ability to design and send custom invoices and accept payments via those invoices. Uniquely, it also supports recurring invoices (sending the same invoice every month without having to manually send it), allows customers to pay in their own currency, and most uniquely, allows you access to the source code so if there’s a unique setup or integration that you’re trying to accomplish you can.
A quick note, Fusion Invoice isn’t completely free, insofar as there is a one-time $60 purchase fee. There are no monthly fees or other ongoing, however, which is why we included it here. Another limitation, is that it’s currently only integrated with PayPal, Stripe, and Mollie, which means essentially you’re limited to using one of those three services to process your client’s payments.
Personally my favorite free invoicing software, Zoho as a company makes a variety of different small business tools that all fully integrate with their Zoho Invoice platform. And while the free stand-alone invoicing service is perfect for a small business with a dozen or so customers, as your business grows you may want to start using the Zoho CRM or one of the other small business tools Zoho offers, and the benefit of using Zoho Invoice is that you won’t have to start from scratch if your business grows to that level, you can simply migrate all of your customer data over to those services as well.
Zoho Invoicing is completely free for businesses with less than 25 customers. It’s surprisingly intuitive and easy to use for such a robust invoicing system. It offers a number of pre-designed templates, allows you to send customers estimates, schedule and send overdue invoice reminders, and accept payments from within the invoice.
As far as accepting payments inside of the invoice, Zoho integrates with both PayPal and Authorize.net (which almost all traditional credit card processors use) so you’re essentially able to use whomever you’d like to act as your credit card processor (which means you can price shop for the cheapest rates).
Finally, Zoho has some pretty robust reporting, so you’re able to see at a glance how many clients are overdue, which types of clients they are, what products are selling, what’s not selling, etc. And because they offer a mobile app, you can check on this (as well as send invoices) from the convenience of your smart phone.
The Invoice Machine
If Zoho is great for those that want a full-featured invoicing solution, the Invoice Machine is perfect for those that want simplicity and ease of use.
The Invoice Machine is completely free for businesses sending less than three invoices and three estimates per month. It enables you to create, send and track clean professional looking invoices, and accept payments for your invoices via the invoice. Like Zoho, Invoice Machine integrates with PayPal, Authorize.net and the 2Checkout payment gateways. That means, once again, that you can essentially pick whoever you want to act as your credit card processor.
The Invoice Machine is incredibly easy to use. The downside, of course, is that it doesn’t have the reporting or tracking ability of a more robust invoicing solution. It does, however, have a pretty straightforward task timer (see picture) that if you bill clients by the hour, can be very useful for keeping an accurate tally of how much time you’ve spent working on a specific client’s account.
Small businesses face a lot of challenges to surviving and growing. A surprising number of those challenges, (e.g. looking professional, billing accurately and easily, tracking funds owed, getting paid on time, and saving owner time to focus on core business issues), can be addressed by using a professional invoicing solution. And given the number of excellent free options out there, it makes absolute sense for you to dump your old Excel and Word client invoices and start sending professional invoices using one of the free services described above.
About the Contributor
This article was contributed by Brad Martin, CMO of Soar Payments