The Best Invoicing Software for Small Businesses in 2020

Having the ability to invoice customers quickly, accurately, and reliably is critical for businesses of any size. Modern invoicing software can help you to quickly generate invoices, deliver them to your customers, track when they have been opened and paid, and integrate with your existing accounting software.

That’s why we’ve put together a list of the best invoicing softwares for small businesses with detailed information on each one, so you can make the right choice for your business.

Table of Contents

Introduction

But there are many invoicing solutions and the best invoicing software for small businesses can depend upon several different factors, including:

For some very small businesses and one-man shops, using free invoice templates and spreadsheets may be suitable enough. If you feel like you have outgrown standard templates and spreadsheets, invoicing software can be a time and headache-saving investment for your business. 

With so many options on the market, sifting through them to find the perfect solution for your business can be difficult. In this article, we’ll dive into the best invoicing software for small businesses, break down their features, and make recommendations regarding what types of businesses they might be most suited for. 

Let’s get started. 

1. Wave

Wave is a web-based invoicing solution that caters to small companies (1-9 employees), freelancers, and solo entrepreneurs. It offers true double-entry accounting and because it is cloud-based, your invoices can be accessed from anywhere in the world with an internet connection. Wave also offers a free app that is simple and straight-forward.

When it comes to modern invoicing solutions, Wave is a standout. Their system is exceptionally easy to use, especially the base invoicing features. Their team is constantly adding new features and updates, growing Wave’s functionality as time passes to make it a more well-rounded solution that is suitable for more business types.

Wave also delivers advanced features including full double-entry accounting, with the option to pay additional fees for expert help with bookkeeping, tax preparation, or accounting consulting. Wave also offers payroll features, which has its own set fees associated with it.

How Much Does Wave Cost?

Wave is 100% free-to-use, opting instead for a fee-based system with a transaction percentage fee and a base transaction fee. There are no limits on the number of invoices, customers, or other plan-based limitations.

CardsFeePayout Time
Visa, Mastercard, Discover2.9% + $0.30 per transaction2 Business Days
American Express3.4% + $0.30 per transaction2 Business Days

Additionally, you can choose to skip the 2 business day waiting period with Wave’s “Instant Payouts” feature. This feature works similarly to Venmo and other person-to-person payment solutions. Instead of using the standard traditional banking methods, Instant Payouts pushes money to your business bank account using the Visa and Mastercard networks. This costs an additional 1% fee, totaled after the original fee has been applied. 

Wave also offers bank payments (ACH). Their fee for these payments is a 1% fee with a $1 minimum transaction. 

What Wave Does Well:

  • The lack of a monthly subscription makes Wave an excellent choice for budget-conscious small businesses. You pay them only when you get paid. 
  • Multi-currency invoicing
  • Wave is very intuitive and easy to use.
  • Instant Payouts allow you to skip the two business day payout time and get paid instantly.
  • Excellent, professional invoicing templates with multiple options.
  • Strong documentation to limit support requests and solve problems on a self-serve basis.

Where Wave Can Improve:

  • Wave does not feature the ability to close a period — meaning that invoices from previous quarters and years can be edited and changed, with those changed reflected in their reporting.
  • While Wave does offer subscription billing invoicing (automated monthly payments), they have to be opted into by the customer, with the option of making a one-time payment. For businesses that offer subscription-only services, this can cause some headaches. 
  • Larger companies may need a more robust solution.

Final Verdict:

Wave is the perfect invoicing software for small businesses that are looking for something simple, professional, and inexpensive. While it isn’t without its own quirks and small issues, the vast majority of businesses will never run into those using the standard features.

Wave is the great invoicing software choice for:

Very small businesses (up to 10 employees)

Freelancers

Solo entrepreneurs

2. FreshBooks

Freshbooks is one of the most well-known invoicing software solutions for small and mid-size businesses. It was founded in 2003 and since that time has grown to more than 10 million customers. Like Wave, Freshbooks is a cloud-based invoicing and accounting solution that is designed for very small businesses and self-employed individuals.

It includes full finance tracking and client invoicing, along with advanced features like project tracking, time-keeping, and internal communication features. FreshBooks does not currently offer payroll features but there are several third-party integrations available with payroll functionality. In 2018, FreshBooks received a large update that added double-entry accounting features. 

Known for being easy to use, both Freshbooks’ web-based dashboard and their mobile apps are intuitive without sacrificing functionality. 

How Much Does FreshBooks Cost?

FreshBooks’ pricing is based on the number of clients/customers that you need to invoice. They offer four base plans, each covering an increasing number of customers. As you step up through the plans, additional features are unlocked as well. FreshBooks offers a free trial, so you can always try out the more advanced features to see if they meet your needs. 

All four plans include:

  • Unlimited invoices and estimates
  • Expense tracking (imported from your bank account)
  • Time tracking
  • Ability to accept online credit card payments

Here is a breakdown of the plans and the features that are unlocked at each level:

PLANPRICEMONTHLY CUSTOMERSADDED FEATURES
Lite$15/Month5Base Features (Listed Above)
Plus$25/Month50-Payment Reminders
-Late Fees
-Accounting Reports
-Recurring Invoices
-Proposals
Premium$50/Month500-Payment Reminders
-Late Fees
-Accounting Reports
-Recurring Invoices
-Proposals

Each of these plans is available at a discount when billed annually. 

What FreshBooks Does Well:

  • Intuitive and user-friendly interface (both web-based and app)
  • Flexible API and integrations for advanced users
  • Advanced customizations
  • Detailed time tracking and project tracking features make FreshBooks a more viable solution for teams

Where FreshBooks Can Improve:

  • Their pricing is more expensive than competitors
  • Low number of allowed monthly customers for their Lite Plan (5)
  • FreshBooks’ reporting features could be fleshed out and expanded
  • Must manually transfer invoices from other systems when switching

Final Verdict:

FreshBooks is perhaps the most popular invoicing software for small businesses for a good reason — it is easy to use, reliable, and extremely customizable. While it does lack some features that would be a necessity for larger companies, their advanced time tracking and project tracking features make it a standout choice for project-based businesses and freelancers. 

While their monthly fees are reasonable, the pricing on their Premium Plan ($50 per month) is higher than the competition while delivering many of the same features. Additionally, only allowing up to five monthly clients or customers for their smallest plan means that most businesses, including freelancers and solopreneurs, will require an upgrade to the Plus plan, which costs $25 per month.

FreshBooks is recommended for:

Companies that don’t mind a monthly subscription 

Small to midsize businesses

Freelancers

Solo entrepreneurs

3. QuickBooks Online

Intuit’s accounting software solutions have been the de facto small business accounting solution since they were first founded in 1983. At the time, they completely reshaped the accounting software landscape. Their first product, Quicken, was the precursor to QuickBooks, which was launched in 2002 and quickly followed with the launch of QuickBooks online two years later. At the time, they were pioneering a cloud-based approach that would become an industry standard. 

Today QuickBooks Online has more than 2 million users and the product itself has seen many advancements. More than just an invoicing software (although it does feature advanced invoicing functionality), QuickBooks Online is a full accounting, financial management, and project management suite for small, medium, and large businesses. 

QuickBooks Online is known for its strong reporting and highly customizable invoices. It offers multi-currency payment options across all major credit cards. 

QuickBooks Online also shines in the integration department, with more than 600+ integrations with some of the most popular business software in existence today. 

Beyond their invoicing and account features, QuickBooks directly connects with platforms like QuickBooks Capital, where businesses have access to loans and liquidity directly through Intuit’s platform. Their QuickBooks Live Bookkeeping add-on is a service-based addition that allows you to connect with an experienced bookkeeper or accounting consultant that has expertise in the QuickBooks Online platform. 

While many companies use the QuickBooks Desktop software, many do not realize that QuickBooks Online actually offers a range of features that are not available in Desktop including sales receipts, split transactions, automatically scheduled invoices, and location categories. 

QuickBooks Online offers a cloud-based solution that allows you to access your data and invoice customers anywhere, at any time. While the pricing and learning curve for QuickBooks Online is steeper than other invoicing software covered in this article, it is still more intuitive and easier to learn than QuickBooks Pro and legacy accounting software. 

How Much Does QuickBooks Online Cost?

QuickBooks Online is a bit more expensive than the other invoicing software for small businesses on this list, but that is to be expected with the advanced features that it comes with. 

QuickBooks Online offers 5 separate plans. Each plan offers unlimited invoices and customers. As you step up through the plans, you gain access to more advanced features. 

The base features for all plans include:

  • Track income & expenses
  • Capture & organize receipts
  • Maximize tax deductions
  • Invoice & accept payments
  • Track miles
  • Run basic reports
PLANPRICEAdded Features
Self-Employed$15/MonthBase Features
Simple Start$25/Month-Send estimates
-Track sales & sales tax
-Manage 1099 contractors
Essentials$40/Month-Manage bills
-Track time
-Includes 3 users
Plus$70/Month-Includes 5 users
-Track project profitability
-Track inventory
Advanced$150/Month-Business analytics & insights
-Batch invoices & expenses
-Customize access by role
-Dedicated account manager
-On-demand online training
-Automate workflows

There are several payroll and set up add-on services that can be appended to these plans that each has their own costs associated with them. 

What QuickBooks Online Does Well:

  • Feature-rich
  • Advanced features for more complex situations
  • Integrations with 600+ popular solutions
  • Detailed time tracking and project tracking features make FreshBooks a more viable solution for teams

Where QuickBooks Can Improve:

  • Frequent customer support complaints
  • Navigation and features can sometimes be unintuitive
  • More expensive than the competition
  • Lengthy support wait times
  • Steeper learning curve than other products

Final Verdict:

QuickBooks Online is a powerful solution that manages to retain its intuitiveness and general ease of use for most users. With that said, the sheer number of features means that it might be a better solution for larger companies or companies that are looking for expanded accounting features. 

4. Xero

Xero is a cloud-based accounting and invoicing software solution that is headquartered in New Zealand. In general, Xero is more of a robust account solution and less of an invoicing solution. Still, it offers many exceptional features that make it one of the best invoicing software choices for small businesses. 

Today Xero has more than 2 million users that use it as their primary accounting and invoicing software. Their modern user interface is clean looking and easy to use. 

Recently, Xero has expanded to include a number of project management and team tracking features that have made it a suitable solution for small, project-based teams. However, this expansion of features has also come with some drawbacks, as user complaints have increased since the company began rolling out their large feature additions. 

Xero is a more expensive solution than Wave and Freshbooks, but on-par with QuickBooks Online. This is to be expected due to the expanded accounting and additional features, but that may take it out of the price range of smaller businesses and solo entrepreneurs. 

Generally, Xero is very intuitive and easy to use. Their mobile apps have an excellent reputation among their users and are one of the things that are most often referenced positively in user reviews across the web. One key area where Xero stands out is in the fact that they offer unlimited users on all of their plans.

How Much Does Xero Cost?

Xero’s smallest plan is quite affordable but limits users to only five invoices per month. That means that most users will need to step up to the middle plan. In total, Xero is available in three plans, each offering an expanded feature-set. 

The base features are available in every plan and include:

  • Five invoices or quotes
  • Five Bills
  • Reconcile 20 transactions
  • Live bank feeds
  • Reports
  • Unlimited users
PLANPRICEAdded Features
Early$9/monthBase Features
Growing$30/month-Unlimited Invoices
-Unlimited Bills
-Unlimited Reconciles
-Capture bills and receipts
Established$60/month-Multi-currency
-Capture and manage claims
-Track project time and costs

Please note: Multi-currency invoicing is only available for Xero’s largest plan. This may not make them an ideal fit for smaller Canadian businesses. 

What Xero Does Well:

  • Unlimited users for all plans
  • Simple, streamlined user interface
  • Easy integration with many popular payment processors
  • Easy recurring invoices

Where Xero Can Improve:

  • Limited reporting features
  • Multi-currency payments only offered for the largest plan
  • No bank payments (ACH)

Final Verdict:

Xero is a highly advanced and respected invoicing and accounting solution. With more than 800 available integrations, you’d be hard-pressed to find a piece of software that it doesn’t integrate with. However, the advanced feature sets and more expensive price tags mean that Xero might be better suited for companies that are looking for a more comprehensive solution than those that use Wave and FreshBooks. 

Choosing the Best Invoicing Software for Small Businesses

Choosing the right invoicing software for your small business is an important choice. It will serve as the primary channel through which you receive payments and drive experiences for your customers and clients. You must decide with all of the available information so that you find the best solution for your small business. 

The recommendations in this article are all excellent pieces of software. Each has its benefits, drawbacks, and situations where they would be a better fit. The overviews and recommendations in this article should serve as a starting point for your research. 

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Ryan Bozeman

Ryan Bozeman is a career B2B writer from Seattle, Wa. He is the founder of Writta and specializes in topics around marketing technology, B2B software, enterprise tools and SaaS companies.

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