A Comprehensive Guide to Invoice Tracking

If you own a small business, then tracking your invoices and payments plays a crucial role in the success of your business. Because the amounts paid can affect the cash flow, considering the expenses to pay and other things in running a business.

However, an ineffective invoice management process can be a big headache as it consumes unnecessary time for the payable person, i.e., your client.

Manually tracking the invoice can be overwhelming if you are a small business owner.

So, the best solution to getting your invoices paid on time without any problems is to track them. In fact, you can automate the invoice tracking process using an invoice tracker in just a few clicks. Keep reading to learn more about invoice tracking.

What is Invoice Tracking?

The process of tracking an invoice from when it is received until it gets paid is called invoice tracking.

For instance, you are an HVAC business owner who sells your services to various clients. So, you have completed installing an HVAC system, and you send your invoice to your client. What do you do next? Keep tracking it unless it gets paid, right? So, this is invoice tracking.

Tracking your invoices can be done manually. You can use any invoice tracker template or whatever system you want to create and send invoices. But manually entering the invoice details can cause errors and consume time and effort.

Did you know the average cost of manually processing a paper invoice is between $15 and $40 per invoice? Because it consumes employee’s time working on entering data, doing rework (if needed), tracking down invoices, and also extra money is spent on late fees, lost discounts, and many more.

This is why investing in the best invoice-tracking software that does all the processes automatically is highly recommended.

Why Should You Use Invoice Tracking Software?

The software or tool automates the bill creation for different products or services you have rendered to your customers. This software helps you to collect payments on time and avoids manual data entry.

Though invoicing is a significant part of running a business, it is time-consuming, especially for small businesses. The invoice must be error-free and delivered quickly. So, for these reasons, investing in invoicing software is necessary.

• Invoice software can help your business process, receive, and track payments quickly by streamlining your invoicing workflow.
• The best part is that this invoice software comes with customizable inbuilt invoice templates. The tool can generate the list of services or products provided to the client, their corresponding costs, along with sales taxes and other fees.
• So, you edit the details, add your brand logo and other things, and send the invoice on the spot to your customer. Since it also acts as an invoice tracking tool, you can track overdue invoices and unpaid invoices automatically.

Though there are multiple invoice tracking software present in the market, if you are looking for affordable and reliable estimating and invoicing software, then check out InvoiceOwl.

InvoiceOwl invoicing software is packed with all the advanced features at an affordable price. It has an inbuilt invoice tracking feature that tracks the invoices sent and notifies about late payments via notification.

You don’t have to check credit card transactions or bank accounts to know if the payment has been made or not. You will get all the details clearly on the software application.

There are many more fascinating features found in this software.

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How to Keep Track of Invoices and Payments?

Follow the below-given tips to keep track of invoices and payments.

1. Select the best invoicing software

With multiple invoicing software to choose from, finding the best invoicing software can pose a challenge. But to help you choose the ideal software, we have listed a few features to consider. You will find them in the next section.

You must answer some important questions before finalizing the invoice software.

Is the invoicing software cloud-based?

The invoicing software must be cloud-based. Otherwise, you must be at your computer whenever you want to get a report or check the invoicing details. But if it is cloud-based, you can access information from your home, an application on a smartphone, or any device.

Can multiple users access it?

As a small business owner, you will probably allow your team members to access all the software and other resources. That said, the invoice software you invest in must allow multiple user interfaces and must also restrict access to certain features.

Is the invoicing software cost-effective?

In general, when compared to accounting software, invoicing software is cost-effective. However, you don’t have to invest in expensive invoicing software. Like, when you can create, send, and track invoices with affordable invoicing software such as InvoiceOwl, then why put a hole in your pocket?

Other things to consider are:

• Is the software user-friendly?
• Does it come with security features?
• Is the software customizable?
• Is the software scalable?
• Does the software charge according to billable hours?
• What about the payment methods?

These questions will help you decide which is the most suitable invoicing solution for your company.

The other things you must check are:

Check the software integration requirements:

Once you find out your business’s invoicing needs, you must check if your integration requirements are met. Check if the invoicing tool can integrate with your existing accounting solution for easier bookkeeping.

Consider your budget:

You may have set a budget for investing in invoicing software. Get a better understanding of different costs, such as upfront expenses for updates and other software-related charges.

Compare the features of different software packages:

Can you add logos or invoice codes? Does it accept multiple payment options? And send out late payment notifications and other such features. You can also compare this software solution with its competitors before making a decision.

2. Implement the best practices for invoicing

61% of late payments are due to incorrect invoices, and 39% of all invoices sent in the US are paid late.

If you want to get the invoice created quickly, sent to the client, and cleared on time, then it is essential to follow some practices.

Below you will find the best practices given by industry experts for invoicing:

Provide a detailed description

Avoid adding “Project as negotiated or discussed.” Be honest. Will you or your client remember every detail of what you discussed? It’s humanly impossible, and this can even create chaos.

So, make sure to create and send an invoice that your client understands clearly. Compose clear, detailed information about the purchase and the details such as a unique invoice number, transaction details, payment, etc. The theme invoice template can be selected from the software based on the type of business.

Verify if the due date is appropriate

The next crucial thing is that the due date of the invoice must be verified. Check if the planned payment date is entered correctly.

Though creating invoices seems easy, a small error in the details you enter can create a mess and lead to the delayed payment. So, double-check if the dates mentioned are correct.

Ensure the contact information is up-to-date

With time, you may need to change the phone number, or you may have relocated.

If you have updated your business contact information, don’t forget to update it on your invoice. Ensure you have all the details on your invoice. And this will help you get paid faster without any hassle.

3. Keep an eye on outstanding invoices

What do outstanding invoices mean? Open invoices are also called outstanding invoices that are sent to the client but have not been paid. An outstanding invoice is not overdue because the payment due date hasn’t passed yet, so the client isn’t late.

Proper invoicing software will notify you when a payment is getting late. Some software will generate and send timely reminder emails to chase payments from clients. But the problem is that these emails are often ignored.

The best-recommended practice is to make a phone call to the client first and remind them about the payment. If the contact can’t be reached via phone, then send a follow-up email with the original invoice attached.

Your client will appreciate the follow-up. Since the client has all the information about the payment status in the invoice you sent, there are high chances for immediate payment.

4. Check reports regularly

Business reports help you manage your business better and expand easily. So, check if the invoicing software also comes with financial reporting software with a simple dashboard to view your monthly, quarterly, and annual income, outstanding payments, and taxes owed.

These reports also help you save time, analyze your business, and plan better. Additionally, you can stay on top of your business when you track and make use of reports.

Which is the Best Software for Invoice Tracking?

As already mentioned, there are hundreds of invoicing software. At the same time, some software comes equipped with advanced features but is too expensive for invoicing software. Meanwhile, some software lack some crucial features or doesn’t have an easy-to-use interface. 

We would suggest you go through InvoiceOwl invoicing software, which is the best software solution for invoice creation and tracking. You will also find all the important features to track invoices without costing an arm and a leg, and we bet it doesn’t compromise on anything.

InvoiceOwl software allows business owners to create and send professional, detailed invoices from their smartphones. Once the invoice is saved to one’s InvoiceOwl account, the user can access the resources and accounting documents to track the invoice at any time from anywhere.

As some exclusive features, the software includes options for uploading images and supporting documents, quick approvals with e-signature, different payment gateways for online payments, and be notified with real-time invoice tracking notifications and staying updated on your payments and invoices. Its read receipt feature will give you the information if the client opens the invoice sent via this software.

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Conclusion

There are lots of reasons to get an invoice tracker. Online invoicing can make your invoicing process a breeze. The best part is that it comes with added security. By tracking invoices, you can get paid faster. Also, it is an excellent method for tax purposes and gives you a glance at your finances. Using this data, you can develop and expand your business.

Overall, you can prepare unique invoices with the invoice tracker template gallery, customize them easily, finalize them, email them directly to your clients, and print as many as you need during dispatch items.