Introduction
It is truly heart-wrenching when, as a freelancer, you wrap up your project after pouring 200% of your efforts, but when the time finally comes to cash in on the hard work, the invoicing process brings everything to a disheartening standstill.
Whether you are applying sum formulas in spreadsheets manually or just clicking through an invoicing software to automate things, note that the invoicing process directly affects your professionalism, time, efforts, accuracy, efficiency, and thus results. This guide compares manual invoicing and invoicing software in detail, considering all possible aspects, which helps a freelancer decide which method works best for them. Keep reading!
What is Manual Invoicing?
Manual invoicing refers to the way of creating and sending invoices, either using pen and paper or using computer applications like Microsoft Word or Excel. These applications are computer-based but require manual intervention every time to create a new invoice. Hence, manual invoicing is considered.
Usually, freelancers who rely on manual invoicing have to create invoices every time from scratch and manually calculate and check the invoice amount. They have to send the invoices either through mail or email, and manually through calls or letters, take follow up of the overdue payments. Sounds cumbersome? Yes, there are several challenges that manual invoicing poses for a freelancer; some prominent challenges are calculation errors, lost tracking of invoices, and making data-driven reports.
As there is no lock without the key, the Manual invoicing maze also has a key solution in the form of invoicing software for freelancers and small businesses. This software unlocks automated and useful features that help you to reduce administrative workload and focus on core business activity.
Continue reading to explore more about invoicing software and find the one that you find perfect for your freelance business.
What is Invoicing Software?
If your system of invoicing is still manual, you are missing the ease, accuracy, and automation of invoicing software. It’s time to discover the power of invoicing software!
Invoicing software is a totally digital solution designed and developed to automate and streamline the routine invoicing work for small businesses and freelance professionals. It is a perfect invoicing mentor for people who want to focus on growth rather than getting entangled in only administrative work all day long.
Example of Best Invoicing Software For Freelancers
There is an array of invoicing software available out there. Everyone is claiming the best, but what makes an invoicing software best for you depends on your needs and expectations. Certain invoicing software like Billbooks offers heavenly features that make the process of invoicing fun and easy like never before.
Some of the key functionalities of Billbooks are –
- Creating and sending invoices automatically.
- Personalised templates that reflect your brand.
- Keeps record of hours worked and generates time tracking invoices without a single error.
- Tracking and follow-up payments with overdue clients.
Need for Invoicing Software
Manual invoicing is a time-consuming and cumbersome process, and that too without accurate results. There are high chances of errors occurring in Invoices created manually. This spoils the business brand image among clients and also incurs financial losses. To escape from this real nightmare scenario, heartily welcome invoicing software into your life and see the change.
Small business invoicing software is faster and more efficient than manual invoicing. Such software ensures that payments are received on time, chases overdue clients and sending auto-reminders. It is needless to mention that this software saves a lot of your valuable time, which you can focus on growth and scale aspects. And no doubt, accuracy is its core feature.
Head-to-Head Comparison: Manual vs Software
Invoicing software undoubtedly wins against manual invoicing. There are incredible benefits showered by invoicing software for freelancers and small businesses. Be it efficiency, automation or accuracy, invoicing software is always better. Moreover, nowadays, software is more reliable than humans. Let’s compare the two systems head to head –
| Feature / Basis of Comparison | Manual Invoicing | Invoicing software |
| Time and Efficiency | Manual invoicing is time-consuming and prone to errors. | Invoicing software automates tasks and saves time |
| Accuracy and Reliability | Manual invoicing is prone to errors and shows inconsistent records. | Invoicing software provides assurance of accuracy and reliability. |
Integration and Automation | Manual invoicing requires you to enter data manually which takes hours without the guarantee of accurate results. | Invoicing software automates and integrates tasks with perfection. |
Organization and Tracking | Manual invoicing is disorganized and there are chances of documents getting misplaced, or lost or destroyed purposely. | Invoicing software works on centralized server where every transaction is organized and tracked. Transparency is appreciated by you. |
Security and Compliance | Manual invoicing may not meet compliance standards. | Invoicing software ensures that all legal and regulatory compliance are met with. |
| Scalability and Flexibility | Manual invoicing is a tedious job that kills productive tasks and obstructs business growth. | Invoicing software integrates and scales with the proportion of business growth rate. This ensures that your operations are not affected. |
| Cost | Manual invoicing can result in administrative costs like salaries and the implied cost of wasted time and resources. | Invoicing software cuts the cost of inaccuracy, errors and multiplies productivity several times. Hence, it proves cost-effective in the long run. |
| Customer Experience | Manual invoicing is a slow process, which leads to poor customer experience and delayed communication sometimes results in loss of customers | Invoicing software ensures timely payments and real-time communication with 100% transparency. This wins customers’ confidence. |
| Customization and Personalization | Manual invoicing is monotonous. Once the template is designed, making customization is a cumbersome task. | Invoicing software is highly customisable with hundreds of easily editable templates as per business brand aesthetics. This brings customer satisfaction. |
Why Freelancers Should Consider Invoicing Software
Freelancer professionals usually do everything on their own, be it generating invoices, or sending invoices to the clients, or chasing clients for payments. In all these hassle, freelancers’ find less time to focus on growth areas. Here is why freelancer should consider invoicing software –
Save Time on Repetitive Tasks
Manual invoicing needs to create Invoices every time from scratch; including details of inventory, amount, and tax. This kills significant time and resources. Invoicing software, on the other hand, frees you from repetitive tasks. It automates routine tasks as well as sending auto-reminders to overdue clients to ensure timely payments. Tracking expenses and generating invoices can be done effortlessly in a Jiffy. After switching to invoicing software, you left with more time that can be utilised in focusing on business growth and scaling.
Professional Appearance
Manual invoices are not visually appealing to the clients. Since the world has entered into graphic designing, business aesthetics has also reshaped from paper printing to 3D designs. Invoicing software helps you to stay creative and up to date with the market trends. This software offers hundreds of professional-looking invoice templates which you can customise and edit the way you want. This helps you to create Invoices with the essence of your business logo and vision. This creates a lasting impression on clients and boosts your brand building.
Faster Payments And Reminders
Understanding the manual invoicing system, you get tired of chasing clients, sending reminders manually through emails and texts, but no constructive response is received. Invoicing software resolved such problems to a great extent because it automatically sends payment reminders at the set frequency, tracks invoice status on the go, and receives notifications when payment is finally received. This way, you can keep yourself updated with the finances of your business without having to drown in a sea of papers and registers.
Easy Tax Tracking And Reports
This is a crucial consideration because tax matters are legal and regulatory failing to which serious consequences have to be faced. In a manual invoicing system, freelancers must calculate and apply tax rates on their own, which can lead to significant issues if done incorrectly. In contrast, invoicing software automates this process, eliminating potential errors. The software comes with built-in tax rates that are regularly updated, making it easy to file tax returns.
Very Early-stage Freelancers
If you have recently started as a freelancer, you are in the process of building your business. At this stage, with a limited client base, you may still be using manual invoicing. You can create a personalized template using MS Word or MS Excel. However, you will need to manually edit the client details each time you create an invoice. So, to mark the beginning of your freelancing career, manual invoicing is acceptable as it is a low-cost alternative.
Very Low Invoice Volume
At the onset of the professional careers, all freelancers have only a few clients. Thus, manual Invoices become manageable for a handful of clients in the beginning. Since the volume of transactions will be limited, tracking invoices will be manageable and tracked through spreadsheets. However, note that this kind of invoicing management is viable for sole freelancers where the administrative burden is minimal. When your client base increase, you need to move to invoice software for better invoicing.
No Budget For Tools
When a freelancer just steps into the world of professional business and service sector, it requires a handsome budget because multiple operations need investment. Thus while operating on a tight budget, manual invoicing is a pocket-friendly option and is feasible too. Investing in invoicing software at such an early stage might be a generous decision. However, a freelancer may manually use the free document templates and create a professional looking Invoices.
Final Verdict
Conclusively, manual invoicing works for beginners or freelancers who work part time with a limited number of clients. However, as your business graph moves up, it becomes difficult to manage manually and that is where an invoicing software can help. Invoicing software for small business and freelancers is designed keeping in mind the modern business needs. The software is smart, quick, and fast enough to manage your invoice issues in less than a minute. Freelancers who are foreseeing growth in their career prospects, switching to an invoicing software is no more a choice – it is essential! Make an informed and wise decision.
FAQ’s:
What’s The Main Difference Between Invoicing Software And Manual Invoicing?
The core difference between invoicing software and manual invoicing is Automation. Invoicing software made payment tracking and billing very easy peasy without error. On the other hand, manual invoicing is prone to errors, needs more time and effort.
Why Should Freelancers Use Invoicing Software?
Freelancers should use invoicing software to automate billing, payment tracking, and create more professional Invoices. Unlike manual invoicing, invoicing software offers accuracy, efficiency, and simplifies invoice management like never before.
Can I Still Use Manual Invoicing If I’m Just Starting Out?
Yes, manual invoicing is not a bad idea when starting out. At the beginning, businesses and freelancers had few clients that could be easily managed and tracked manually. However, as the workload and client base surge, invoicing software becomes a better option as it not only helps in managing finance but also gives accurate results and saves precious time.
Is invoicing software expensive for freelancers?
Invoicing software for freelancers is generally affordable, with many offering free plans or low-cost subscriptions, making it a cost-effective solution to streamline billing and improve professionalism.
Does Invoicing Software Support Taxes And Discounts?
Yes, almost all invoicing software accommodates taxes and discounts. You can apply tax rates and discounts automatically, or remove them as per your convenience. You may also generate tax reports to present to your consultants and manage it better.
