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Online Financial Tools Can Streamline Your Billing and Payments Processes

By Jesse Butts | October 30, 2012

Online invoice and payments software for small business can reduce the time it takes to get your money in the bank.

Maintaining a positive cash flow is often one of the most difficult aspects of running a small business. Even when business is booming, that lull between sending an invoice, receiving payment, and having the check clear the bank can be the death knell for small businesses with frequent expenses. But with the proper financial tool, all that can change.

Thanks to recent advancements in business-to-business electronic payments and invoicing, you can cut the time of sending invoices, making deposits at the bank, and waiting for your money to be available. What’s more, some online software packages can stay on top of your collections and give you broader insight into your cash inflow.

The Key Components of Online Invoice and Payments Systems

Most online invoice and payments services worth their salt offer components that give you the ability to:

  • create electronic invoices and send them to customers via email
  • accept payment from, at the very least, credit cards and ACH debits/eChecks
  • deposit payments directly into your bank account

While you may think all of this sounds excessive for your business, consider the benefits:

  • a standardized invoice template with all invoices stored in one system, cutting anywhere from a couple minutes to an hour of prep time depending upon your current invoice system
  • up to several days eliminated from your cash inflow period because you’re not waiting for checks to be mailed or finding the time to deposit them
  • less time required for your bank to process and post the payments, meaning you can access your money sooner

Of course, if your business only receives several payments a month and cash flow gaps are never an issue, switching to an online system might not be worth the effort. But if you routinely send invoices and find the frequent trips to the bank a chore, an online system might be the answer.

To help you decide which tool is the best for your business, we’ve reviewed some of the most popular online invoice and payment options.

PaySimple

With PaySimple, you receive the widest range of features. You can use this online system for three basic payment functions:

  • accept payments through credit cards, eChecks (using ACH processing), mobile payments, an interface that enables you to enter phone and mailed payments, and online payments from your website
  • streamline billing through electronic invoices, automated recurring billing, and a central location for customer communications
  • manage customers with customer records, reports, and integration with accounting software

For entrepreneurs who receive steady payments from a diverse base of customers, the wide range of payments can help you accommodate clients in any manner they want to pay. And if you’ve struggled to create reports that provide insight into your cash inflow, you can click a few buttons instead of creating your own report in a spreadsheet.

The full package costs $34.95 monthly plus transaction fees which, generally speaking, fall in line with standard credit card rates.

PayPal: Online Invoicing

PayPal has worn the crown as king of electronic consumer payments for years, and it’s not surprising its business-to-business Online Invoicing package is a popular choice among small business owners. Although it lacks some of the higher-end features PaySimple provides, for many small businesses, the feature set is ample. Online Invoicing enables you to:

  • send electronic invoices
  • let your customers pay by credit card, bank account, or PayPal
  • use an invoice management system to track the diligent and the deadbeats

Online Invoicing is ideal for small businesses that fall in a happy medium where invoices and payments arise at a steady enough pace to prove an inconvenience. And for businesses with customers who prefer making electronic payments, it’s a safe bet.

Even if you think you’ll never use it, there’s no harm in opening an account and exploring your options. After all, PayPal charges no monthly fees and fairly standard per-transaction fees.

Your Bank’s Electronic Invoice and Payment System

Banks, like many other businesses, realize the more services customers use, the less likely they are to abandon ship. To keep their small business customers loyal, many banks offer online invoice and payment systems similar to PaySimple and PayPal’s Online Invoicing.

Bank of America, for example, offers Paymode-X. This online invoice and payment system (that sounds like it’s straight from a Marvel comic) contains fewer features than either of the previously mentioned competitors, but it will get the job done.

Depending upon your bank, you may be able to take advantage of more features. At a minimum, you can expect a basic way to send invoices and receive payments electronically. Fees also vary from bank to bank, but most are free, and some banks even eat the cost of per-transaction fees.

As you research your options, remember the bottom line: The days of tracking payments in a homemade spreadsheet then running to the bank so the check will clear before you’re in a cash crunch can be over in a few clicks.

Finance

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