Top 5 Features to Look in Invoicing Software for Contract

Contractors often take on multiple projects, and invoicing can be a tedious task. 

Yes, manual invoicing can be time-consuming, prone to errors, and may lead to delayed payments. 

And guess what? Invoicing software solves these problems by automating the process, enabling contractors to focus on their core work.

But, should you just choose anyhow software and start using it for your business? Absolutely NO!

That’s why we’ve decided to educate you on the top 5 features you should look for in invoicing software for contractors.

So, continue reading to discover them. But, let’s first understand what invoicing software is about, its benefits, and its common features.

What Is Invoicing Software for Contractors?

Invoicing software for contractors is a tool that simplifies the billing and payment process or credit card processing for contractors. 

It streamlines the invoicing process by automating the generation of invoices, tracking payments, and providing a platform for managing financial records.

With invoicing software, contractors can create and send invoices within a few clicks. 

This software shouldn’t only be considered as a time-saving tool, but also a branding enhancement tool, as it allows contractors to customize invoices with their branding, such as adding a logo, and includes necessary details such as project details, hourly rates, and taxes. 

The software can also generate recurring invoices for long-term projects, saving contractors from having to create new invoices every time.

Also, in the case of clients who have forgotten to pay their invoices – invoicing software can also help by sending automated reminders to the clients.

And this ensures that contractors receive timely payments and minimize the need for follow-up emails and calls.

The software also provides a platform or system for managing financial records. 

It stores all invoices, receipts, and payment records in one place, making it easy for contractors to track their financial transactions. 

This feature is particularly beneficial for contractors who need to keep track of their expenses for tax purposes.

Invoicing software for contractors can as well integrate with accounting software, to streamline bookkeeping tasks further. 

The integration enables contractors to transfer financial data seamlessly between the two platforms – which helps in eliminating the need for manual data entry.

Top 5 Features to Look in Invoicing Software For Contractors

Now that you’ve known that invoicing software is undoubtedly an essential part of a successful contractor business.

It’s now the right time to explore the features to look in invoicing software for contractors – when making a software choice.

So, we’ve made it simple for you by listing below, the top five features to look for when selecting invoicing software for contractors:

• Customizable Invoices

If you’ve been following, you should have noticed that I mentioned the word “customize” when I explained what “invoicing software for contractors” is all about.

So, that tells you that customization is an essential feature you shouldn’t overlook in invoicing software.

Customizable invoices are essential for you, as a contractor, as it enables you to personalize your invoices to match your brand identity. 

It’s important to look for invoicing software that allows you to add your logo, change colors, customize the layout of the invoice, etc,.

This makes your invoices look professional and can help you stand out from your competitors.

•  Easy Time Tracking

Time tracking is critical for contractors as they often bill by the hour. 

Therefore, invoicing software that has an integrated time-tracking feature can be a lifesaver. 

It should allow you to track time for each project, add billable hours to an invoice, and generate reports. 

This feature will help you keep track of your time and ensure that you are billing accurately.

•  Automated Invoicing and Payment Reminders

Automated invoicing and payment reminders can help contractors save time and avoid late payments. 

Invoicing software that allows you to set up automatic invoices and payment reminders can be a huge benefit. Like, a HUGE one.

Imagine that you can create invoices and schedule them to be sent on a specific date. 

How about setting up automatic payment reminders to ensure that your clients pay on time? How does that sound?

Great, right? Thus, a reason why you should also consider automated invoicing and payment reminder features.

•  Expense Tracking

Expense tracking is essential for contractors to keep track of their expenses and ensure that they are reimbursed for any business-related expenses. 

Your chosen invoicing software should allow you to track expenses and include them in your invoices. 

Additionally, the software should allow you to categorize your expenses and generate reports for tax purposes.

• Integration with Accounting Software

Integrating your invoicing software with your accounting software can streamline your financial management process. 

What Are The Key Steps In Invoice Processing?

Below are the key steps in invoice processing, as a contractor:

• Create an invoice

The first step in invoice processing is to create an invoice. This document should contain all of the relevant details, including the work that was performed, the payment terms, and the payment amount. 

Make sure that your invoice is accurate and includes all of the necessary information, as this will help to avoid any payment delays.

• Submit the invoice

Once you have created your invoice, it’s time to submit it to the appropriate party. This could be the client that you worked for, or an intermediary such as a staffing agency or recruiter. 

Make sure that you follow any specific instructions that are provided regarding the submission of invoices, as this will help to ensure that your invoice is processed as quickly as possible.

• Track the invoice

After you have submitted your invoice, it’s important to track its progress. This will help you to know when you can expect payment and will also allow you to follow up if there are any delays or issues with the payment. 

You can use a spreadsheet or other tracking tool to keep track of your invoices and their status.

• Follow up on payment

If your invoice has been submitted and it’s been longer than the payment terms that you agreed upon, it’s paramount to follow up on payment. 

You can send a friendly reminder email or make a phone call to the appropriate party to inquire about the status of the payment. 

However, don’t forget to be professional and polite in your communication, but don’t be afraid to assert yourself.

• Record payment

Once you have received payment for your invoice, you need to record it in your accounting software – as it will help you to keep track of your income and expenses and will also make it easier to file your taxes at the end of the year. 

Make sure that you record the payment accurately and keep all relevant documentation, such as receipts or bank statements.

What Are The Common Mistakes To Avoid While Invoicing?

Invoicing mistakes are common among contractors, and they can lead to delays in payment, disputes with clients, and even legal issues. 

Let’s check out these common mistakes, so that you can avoid them to have a successful business.

• Not including all necessary details

One of the most common mistakes made by contractors when invoicing is not including all the necessary details in their invoices. 

It is crucial to ensure that all the relevant details such as the client’s name and address, your business name and address, the services rendered, the quantity, and the cost per item are included in the invoice. 

This information will ensure that the client can identify the work performed, and it will help to avoid disputes over the invoice’s accuracy.

• Not adhering to the payment terms

It is essential to establish clear payment terms with your clients before starting the project. 

These terms should be included in the contract and reflected in the invoice. 

Failure to adhere to the payment terms can lead to payment delay. Therefore, ensure that you send the invoice on time and follow up with the client if the payment is not received within the stipulated time.

• Inaccurate billing

Inaccurate billing can occur due to various reasons such as human error, miscalculations, or misinterpretation of the contract terms. 

You should ensure that the billing is accurate to avoid disputes with clients over the free invoice generator for freelancer. 

So, double-check the invoice to ensure that the billing information is accurate.

• Lack of clarity in the invoice

The invoice should be clear and easy to understand to avoid confusion with the client. 

This can be achieved by using simple language, bullet points, and clear headings. 

It is also paramount to include any relevant information such as payment due date, payment options, and any discounts or promotions offered.

• Not keeping accurate records

As a contractor, your responsibility is to keep accurate records of all your invoices and payments. 

Failure to do so can lead to discrepancies in accounting, payment delays, and even legal issues. 

Conclusion

Invoicing software is indeed a tight friend of contractors – as it helps them to streamline their work process and achieve a greater result.

But, as it’s always been, not all friends are the best – you have to filter the best among them.

Hence, a reason why you should consider the features we’ve outlined in this article – so you ca choose the best invoicing software for yourself, as a contractor.

We also covered key steps in invoice processing and the common mistakes you should avoid while invoicing.