Ignition blog  /  Improve cash flow  /  Why small businesses need to automate invoicing

IMPROVE CASH FLOW 8 mins 23 Jun 2023 by Kasey Clark
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Key takeaways:

  • Automating invoices can streamline operations and drive growth for small businesses by improving efficiency, accuracy, and cash flow management.

  • Challenges with manual invoicing include time-consuming tasks, potential errors, and financial risks.

  • With automated invoicing you can easily export invoicing data and access full payment history, which provides valuable insights for financial analysis and decision-making.

  • Integrations with your ledger software, such as QuickBooks and Xero, can simplify invoicing and reconciliation processes.

Say goodbye to time-consuming manual invoicing

Small businesses face unique challenges when they’re managing billing and payments. Manual invoicing processes can be time-consuming, are often prone to errors, and can hinder growth.

That's where the power of invoicing software automation comes into play. By leveraging the cutting-edge technology that’s available to them, small businesses can streamline their invoicing process, accelerate payment cycles, and unlock new growth opportunities.

In this article, we’ll look at the benefits of invoice automation. We’ll also dive into the inner workings of invoicing software to equip your organization with the tools and knowledge to take control of your invoicing, and drive business success.

If you’re finding that manually processing invoicing is taking up valuable time and you want to embrace the future of accounts payable (AP) automation and invoice management, this blog will help inform your decision-making.

Challenges that the small business owner faces with invoicing

Small businesses, especially those with growth aspirations, understand the importance of setting up efficient processes right from the start. You recognize that automating tasks wherever possible is essential for freeing up valuable time and resources and allowing you to focus on driving your business forward.

In a world where time and resources are limited, it's crucial for small businesses to avoid getting caught up in manual processes that take them away from client acquisition and service.

However, one critical aspect that small business owners cannot afford to overlook is getting paid – and paid on time – for the work you do. A cash flow crisis because clients fail to pay can have serious consequences for your firm’s financial stability. To avoid this, you need to address the challenges of the invoicing process.

Small businesses across various industries, from accountants and bookkeepers to marketing agencies and other professional services providers, encounter numerous obstacles around invoicing.

Manual data entry, a common feature in the billing process, can be time-consuming and resource-intensive for small business owners. The manual tasks involved in creating invoices, sending, and processing them can quickly become overwhelming, leading to potential errors and delays.

Managing incoming invoices and accounts payable becomes a juggling act, further complicating efforts to maintain a healthy cash flow. Human error in handling invoices adds another layer of complexity, impacting both accuracy and efficiency.

To overcome these challenges, it’s time for small businesses to turn to automated invoicing solutions. These solutions streamline the entire invoicing process, reducing the need for manual tasks and ensuring timely payment processing.

By automating the way you create invoices, send, and track them, small businesses can minimize errors and delays, improve cash flow, and focus on what matters most – growing your business and delivering exceptional services to your clients.

Automated invoicing solutions provide the necessary efficiency and accuracy that small businesses need to thrive in today's competitive landscape.

What is invoice automation?

Invoice automation, also known as automated invoice processing software, is cutting-edge technology that streamlines the entire invoicing process. Here’s an example of what it can do:

  • Automatically generates invoices based on preset intervals or specific triggers, like your billing schedule or the signing of a proposal by your client.

  • After generating an invoice, the software can instantly send it via email, coupled with reminders for overdue payments at designated intervals.

  • Tracks invoice status and provides updates on payments, overdue notices, and when your invoice has been viewed.

  • Invoice automation can match the client's payment against the corresponding invoice when integrated with your accounting software.

  • It can also generate reports on outstanding invoices, paid invoices, revenue trends, and more.

The benefit for small businesses is that invoicing becomes a set-and-forget strategy. By eliminating many of these repetitive tasks, automation clearly makes invoicing faster and more effective, with reduced risk of human error.

With invoicing taken care of, you’re free to focus on other parts of your business, such as winning more clients and retaining your existing ones.

Getting paid faster with automated invoicing

What's more, with automated invoicing you can get paid faster when you use automated invoices.

Small businesses that are prioritizing growth understand the importance of efficient processes and streamlined payment processing. With automated invoicing, you have the power to collect payment from your clients when you invoice them. This ensures customers pay on time and eliminates debtors from your business.

Say for example, you’re a professional service provider who needs flexible billing or the ability to invoice clients in multiple ways:

• You might need to take an upfront deposit from a client as soon as they sign your proposal.
• You may also work on retainer, so need to charge the client a regular recurring monthly fee.
• And you may also need to bill on completion when project work is completed.

Invoice automation software such as Ignition makes it easy to do this. But Ignition doesn’t just automate invoicing. It automates and optimizes proposals, client agreements, billing, payment collection and workflows – all in one platform.

It enables you to run your business smarter, so you can finally put an end to mundane repetitive admin, late payments and unbilled work forever.

Taking upfront deposits

With Ignition, you can collect payment details upfront and automate payment collection from the moment a client signs your proposal. When the invoice is due, Ignition automatically takes the payment so no one lifts a finger.

The software makes it convenient for clients to pay automatically using credit or debit card, direct debit, PAD or ACH, depending on the region. So, no more chasing clients.

Then, you can get paid effortlessly with set-and-forget client billing and automatic payment collection to protect your cash flow.

Regardless of how you price your services – hourly, fixed fee, value pricing or another method – the software can invoice based on your agreed scope and billing schedule.

Set-and-forget invoicing and reconciliation

For instance, by connecting Ignition with QuickBooks and Xero through Zapier, you can automate your invoicing and reconciliation tasks, ensuring a seamless flow of all the data between the platforms. Set and forget it, as your tech conveniently generates and reconciles invoices automatically.

You can put manual invoicing in your rearview mirror and embrace the efficiency and convenience of automated invoicing to accelerate your business success.

Invoicing software to take your business to the next level

The benefits of invoice automation are clear to see, especially for small business owners who are looking to scale and want to run their business more efficiently. But how do you choose a solution that’s right for your business now – and as it grows?

There are a number of things to look out for in invoicing automation. Here’s a list of the top five:

1. A business dashboard so you can view and track payments

You need to be able to see payments that have been collected and that you expect to collect in the current financial period. When you run a small business it’s often easy to track payments but as you grow this can become more challenging. Having access to a comprehensive payment history is key for keeping track of client payments and ensuring timely cash flow.

With Ignition, small businesses can easily view and track complete payment histories using a business dashboard. This gives you insights into key metrics, such as outstanding payments, and payment trends. It also gives you visibility over the revenue you’ve already generated from active proposals.

As well as listing services that generate the most revenue for your business, you can track how many of your proposals are accepted by your leads and existing clients.

This transparency can provide valuable insights and further helps you make informed financial decisions that can grow your business

2. The ability to easily export your invoicing data

You should be able to easily export your invoice data for further analysis and reporting. Whether it's for generating financial reports or sharing data with your accountant – the ability to export invoicing information in various formats simplifies the process and saves you time.

With this feature, small businesses also gain greater overall visibility into their financial stability, so they can make more informed decisions to drive their business forward.

3. Invoice template configuration

Customizable invoice templates are another handy feature of automatic invoicing software. You can personalize your invoice layout, design, and branding to accurately reflect your company's image and professionalism.

Using invoice templates not only adds a professional touch, but also makes sure you have consistency across all client communications. With customizable templates, you can make a lasting impression and present your business as a reliable and trustworthy partner to your clients.

4. Accept online payments

As we discussed earlier, automatic invoicing software that integrates with secure payment gateways enables small business owners to accept online payments conveniently.

By offering multiple payment options, such as credit cards or automated clearing house (ACH), you can provide a seamless payment experience for your clients.

Accepting online payments also reduces the risk of delayed payments or missed payments, ensuring faster and more reliable cash flow. Ultimately, it helps to ensure you get paid for all the work you do!

5. Automatic notification

Automatic notification features help small business owners stay on top of invoicing and payment processes. Whether you’re sending automated payment reminders to clients or receiving alerts for overdue payments, these notifications ensure timely actions and minimize the need for manual follow-ups.

By using automatic notifications, you can save time, avoid awkward conversations, improve communication with clients, and maintain healthy client relationships based on prompt payment interactions.

Over to you

To be able to effortlessly manage your invoices is the gift of invoicing software that keeps on giving. From tracking invoice statuses to monitoring payment activities, you gain complete control over your invoicing process.

What’s more, collecting your clients' billing details upfront enables you to take control of payment collection, eliminating accounts receivable (AR), and further minimizing friction points in client relationships.

All up, it means no AR, guaranteed payments, improved cash flow, and a hands-off AR process.

Ignition offers a comprehensive solution to automate your business from proposal to payment. The platform empowers you to focus on what you do best, and our automated features take care of the rest.

Watch an online demo and discover how Ignition can help you run your business smarter. Free up valuable time, automate manual processes, and leave time-consuming admin to your competitors.
Book a demo of the Ignition software

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Kasey Clark
Kasey Clark


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Published 23 Jun 2023 Last updated 19 Mar 2024