There is a difference between knowing the details of the invoicing software and understanding how it works. An invoice software is an online or desktop based system that provides automation and accuracy based system for billing purposes. There are few customers to whom you need to send invoices on a regular basis or in a repetitive manner and it is a tedious task to send them reminders and same invoices again and again. This work is made easy with the help of a software that manages all the stuff and can create multiple types of invoices catering to businesses of different industries. These invoices can be in the form of receipt, credit memos, timesheet, recurring invoice, statements, progress invoice, proforma invoice etc. Regardless of the name and appearance of the invoice it aims at getting payment from the customer and most of the invoice software works as follows —
Build the invoice – You can build an invoice from scratch or populate lines from a previous invoice by duplicating it. Mostly an invoice software will ask you to input the name, amount, quantity, discounts, tax and similar stuff. You can even customize the invoice according to your company and customer.
- Send the invoice – once the invoice is built then the second step is to send it to the client whom you are billing. You can add a new client to your database or just send the bill to a previous customer. You can even add a validation level in order to approve the costing before sending it to the client. You can even notify the customers via email or SMS once an invoice is generated for them.
- Receive payment – the main motive of sending invoice is getting paid, so the next step that the invoice software must perform is to get payments. There are several cloud-based software that comes integrated with online payment systems for bills and invoices. You can even send payment reminders to the clients on a daily or weekly basis as per your schedule so that payments are received. Even management can be notified of payments received and pending.
- Report generation – After you input all your bills and data into the system the next steps is to get proper reports from the software. Most common reports include outstanding invoices, payment cycle details, late and pending payments etc. These reports are generated based on your input data and you can choose to get reports for a weekly, monthly, yearly or for a particular date range.