Automated Invoicing System for Small Business Ecommerce Websites: All You Need To Know

The rise of ecommerce has made it easier than ever before for small businesses to reach a global market and make products and services accessible worldwide. However, every business online has more opportunities to grow. An efficient invoicing system for small business websites is especially helpful when it comes to managing timely payments and accurate financial records.

Manual invoicing systems for small businesses can consume a lot of time and lead to errors. Due to this, many SMEs (small and medium enterprises) are turning to automated billing and invoicing solutions. Although they may require additional expenses to operate and time to learn how to, the payoff is worth the minor inconveniences in the long run.

In this article, we take a closer look at automated invoicing software and how it can help ecommerce website owners upgrade their ecommerce stores. We also dive deep into the main advantages and disadvantages of manual and automated invoicing. Curious? Keep reading to learn all you need to know.

Key Highlights

• Automated invoicing software handles the billing process by automating tasks like data entry, payment calculations and recurring invoice sending. 
• Switching from manual invoicing to automated invoicing software for small businesses saves time and costs, eliminates the risk of errors, provides more accuracy, allows for better organization and enhances professionalism.
• When choosing invoicing software, it is crucial to consider invoicing features, pricing, security and other integrations.

What is the purpose of an invoicing system for ecommerce websites?

In short, automated invoicing software streamlines the process of creating and sending invoices to customers, processing orders, tracking payments as well as managing inventory and accounts receivables. On top of that, it helps small ecommerce websites comply with sales tax regulations and provides them with detailed reporting and analytics.

The invoice generator collects information about the company, customer and order, which ensures a smooth and organized flow of payments. Ecommerce websites can also integrate invoicing capabilities with inventory management systems or project management tools to track sales and manage resources more efficiently.

In short, invoicing and billing software allows sending invoices and promptly accepting payments online, thereby encouraging timely payments by customers. It also improves record keeping and helps run the business in a faster and more organized way. 

In the long run, automated invoicing software improves customer satisfaction due to the quality of services received.

How to choose the right invoicing software?

Choosing the right invoicing solution can significantly impact your business performance; however, the choice is highly personal, and it usually depends on such factors as the size of your business and its requirements. Let’s look at some key factors you need to consider when choosing the best invoicing software for your website.

Review invoicing features

Most invoicing software includes basic invoicing features, such as automation, payment reminders, customizable invoicing templates, integration with other software tools and security. However, when choosing an invoice app, consider what features you need and whether the tool you are interested in offers them. 

A few things you might be looking for may include customizable templates, automatic payment reminders, unlimited invoices, recurring invoices scheduling and integration with your accounting software.

Consider security

Free invoice software may not offer adequate security features, such as data encryption or regular security updates, which may endanger sensitive financial data. So, look for software that offers reliable data storage, encryption and two-factor authentication. 

Note that free tools usually do not offer advanced security solutions, so a free plan might not work best if you are trying to avoid hacking and promote safety. Also, keep in mind that regular backups and role-based access controls can help keep access to sensitive data in the hands of authorized users only. 

Opt for integration

Consider choosing invoicing software for small businesses that integrates with the tools and systems you already use, including accounting software, payment gateways, CRM systems, ecommerce platforms and management tools. This will help you sync your financial records with other company data, manage your journals more efficiently and reduce the risk of errors or discrepancies. 

Check for support and ease of use

User-friendly invoicing software enables you to create and send unlimited invoices quickly and easily. It is also imperative that you choose software with comprehensive customer support that includes technical support and training resources. You need this because, in cases of emergency, you may need help managing crises. 

Determine monthly fees

Free billing software can usually be linked to hidden fees, limited features, lack of support and limited scalability. Moreover, free invoicing software is far less reliable than a paid alternative. So, before purchasing the software of your choice, you should determine your budget and consider all costs, including ongoing fees or charges. 

When choosing an automated invoicing provider, it is crucial to compare prices. Particularly, pay attention to initial and renewal prices because many billing and invoicing providers offer discounts to new users to incentivize them to sign up for the services. However, these are non-recurring promotions. Fortunately, you can benefit from long-term or annual plans as they are usually cheaper than month-by-month subscriptions anyway. 

Consider tried and tested invoicing tools

As you now know, choosing the right invoicing tool is a highly personal decision, and you need to consider many different aspects. Nonetheless, there are some automated invoicing systems that ecommerce website owners tend to use more frequently. 

Square Invoices, FreshBooks, Zoho Invoice, Xero, Intuit QuickBooks Online, Invoicera and ZipBooks are some of the more popular choices among ecommerce website owners. That said, you should still research and consider all advantages and disadvantages before choosing the software that works specifically for you.

Manual invoicing vs. automated invoicing

Still not convinced automated invoicing is the way to go? Perhaps it is not, and you can support your operation entirely with manual invoicing, in which case even the best invoicing software might not intrigue you.

At the end of the day, it is a matter of preference of how you want to manage your invoices. So, let’s take a look at the advantages and disadvantages of both options. 

Benefits of manual invoicing

• Lower cost: Managing a manual invoicing system can be less expensive than using automated systems, as it does not require software or hardware purchases.
• Personal touch: Some customers may appreciate the personal touch of a non-templated invoice as opposed to invoice templates, especially if you send invoices with a personalized message.

Drawbacks of manual invoicing

• Increased time consumption: Managing manual invoice systems can be time-consuming, as they require the administrator to create invoices, deliver and track them manually.
• Errors: Manual systems are more prone to human errors, such as incorrect data entry or calculation mistakes, which can lead to late payments or disputes with customers.
• Limited access to data: Manual invoicing systems make it difficult to access data quickly and accurately as there is no centralized database that tracks invoice history, payment history or customer information.
• Lack of security: Unencrypted invoices can be lost, stolen or damaged during delivery or handling, and if sensitive financial data is not kept securely, the privacy of both the business and the customer could be at risk.

Benefits of automated invoicing systems

• Time saving: You can accept payments via a client portal or mobile apps, generate unlimited invoices, send professional invoices to customers via email or other electronic means and set up reminders.
• Increased accuracy: Automated invoicing systems are less prone to errors, as data is entered electronically and calculations are done automatically, which can reduce disputes with customers and prevent late payments.
• Better data access: You get a centralized database of invoice history, payment status and customer information, which means automated invoicing software makes it easier to access accurate data quickly.
• Improved efficiency: You can integrate invoicing and billing software options with other business or project management software, such as accounting or payment processing systems, which can reduce the need for repetitions and improve overall efficiency.
• Flexibility: The best invoicing software allows for flexibility in terms of invoice customization, as you can personalize invoice templates according to the specific needs of your business.

Drawbacks of automated invoicing

• Cost: Automated systems are more expensive than manual ones, as they require an initial investment, and you have to cover ongoing subscription or usage fees.
• Learning curve: Some automated invoicing systems can be more complex than others to operate, and thus you may require training to gain technical expertise.
• Technical issues: Software glitches, internet connectivity problems or system crashes may be unavoidable, and that could cause downtime and affect business operations.

How do invoicing tools help scale small ecommerce websites?

For small ecommerce websites, managing finances can be a daunting task that can hinder business growth. Automated invoicing systems for small businesses offer solutions to these challenges by optimizing all invoicing-related processes. Let’s explore some of the most significant benefits.

Benefit #1: Increased efficiency

Automated tools contain all of the necessary information about recurring invoices and transactions and can help speed up the entire process with the help of invoice templates or the ability to send unlimited invoices. Furthermore, by automating the process, you reduce the risk of human error and ensure that payments are accurate and complete. This lessens the risk of disagreements and chargebacks.

Automated solutions can help generate unlimited invoices, send invoices to customers without the need for manual input and accept online payments, thereby helping small ecommerce websites process more orders efficiently.

Benefit #2: Improved cash flow

By integrating invoice software with payment gateways, you can ensure less frequent payment delays. This can help you reduce the amount of time spent on payment processing as well as improve cash flow. Automated invoicing systems can organize your finances automatically and more legibly. This can help your small business website keep track of your invoices and payments in one central location.

Benefit #3: Better decision making

Once an invoice is sent, automated invoicing and billing software tracks the payment status and provides real-time data. For instance, you can track sales, payment status, payment history, outstanding invoices and other important data in real time. These valuable insights help organize your finances and make informed decisions on your business operations.

Benefit #4: Improved customer satisfaction

Invoicing tools enable small businesses to send professional-looking invoices automatically and offer multiple payment options, including credit cards, debit cards and bank transfers, as well as newer payment methods such as mobile invoicing, e-wallets and cryptocurrencies. In turn, this may help you improve customer satisfaction and loyalty.

WAcademy Web Services: Invoicing System for Ecommerce

The WAcademy internship program offers free training for beginner web, graphic and UX designers. To ensure they build skills and apply acquired knowledge through practice, we work with SMEs that need web design services. Although our interns enter the internship program without a lot of experience, we provide thorough training before they are connected with real small business owners who wish to build websites. This ensures the highest quality services.

Besides providing free web design services, we also offer an array of additional services that can enhance websites and help them grow faster. For example, we can integrate GDPR cookie banners, Meta Pixel, social media feeds, Google Analytics, online booking systems, under construction pages, pop-ups, SEO and offer professional website administration and other services. We can also help integrate an automated invoicing system, in which case, we take care of all configurations.

As you implement WAcademy’s Invoicing System for Ecommerce, our team sets up the plugin for your WordPress site and sets custom configurations, including the language of the invoice or the time the invoice is to be generated and sent out. With this hands-off approach, you have more time to enhance other services or communicate with customers directly.

In conclusion, while manual invoicing can consume your time and put you under stress, it is easy to automate the process and scale your ecommerce website. If you choose automated invoicing, you can improve billing accuracy, reduce administrative work and enhance the overall customer experience. So, what will you choose?