Professional invoicing software

The very nature of the sole trader (micro-entrepreneur) status means running your business alone. You handle the sales side, the organization of services or product sales, as well as after-sales support. If you have a business premises, other tasks pile up to give your customers the best possible welcome. Bookkeeping quickly becomes time-consuming and eats into your working hours, which is why it’s recommended to use professional invoicing software that saves you time and helps you manage your business.

The essential qualities of professional invoicing software

Professional invoicing software must include the features essential to keeping your books. You should also look at the additional benefits it offers and, above all, make sure the software is kept up to date by its developers, so it always complies with laws that change from year to year.

The immutability of your accounting documents

Your accounting documents must be traceable. This means you need dated, tamper-proof records. In the event of a dispute with a customer or the tax authorities, you can present the original documents as proof of your good faith.

If a customer or supplier presents a falsified document, you’re protected by the recording of the original documents.

Archiving

The law requires you to keep all your accounting records, whether on paper or digitally, for 10 years. Professional invoicing software lets you organize your archiving and find any supporting document in just a few clicks.

You don’t clutter your computer with bulky folders that aren’t always easy to sort, but instead have access to archives all coded the same way. Moreover, cloud storage through the software doesn’t weigh down your computer’s capacity and lets you access it from any desktop or laptop, wherever you are.

The evolution of professional invoicing software

Accounting laws aren’t set in stone and change frequently. For sole traders, for example, the revenue thresholds allowing you to keep this status have changed since it was created. In addition, you’re now subject to VAT invoicing and reporting above a certain threshold.

It’s therefore crucial that the software’s developer keeps rolling out updates, to guarantee you stay compliant. It’s also advisable to contact support before subscribing, to make sure it offers efficient after-sales service, with the option to communicate easily by email, chat, or even phone.

Simplicity and customization

Your software needs to be intuitive — you shouldn’t have to spend hours figuring out how it works. You generally get a free trial period that lets you test it out.

You should also be able to customize your quotes and invoices, since the documents you send to your customers reflect your image. It’s important that your documents are well presented and display your logo and colors. This matters even more if you manage several businesses and need to differentiate your various activities.

The versatility of your software

Once you’ve made sure your future professional invoicing software offers the general features we’ve just described, you need to list the tasks it lets you carry out. The software should be flexible and agile — it shouldn’t just issue your accounting documents, but should also help you manage your business strategy, forecast the expenses you need to set aside, sync with your online store(s), and automate as many tasks as possible to save you time, etc.

Here, in detail, are the features you should demand from your accounting software.

Listing customers and suppliers

Every business works with customers and suppliers. Each one should have a record summarizing their contact details, as well as a history that updates automatically with every transaction involving them.

You should also record all the particularities of these customers and suppliers, whether positive or negative. This lets you personalize your interactions, watch out for a bad payer, reward a loyal customer, or check a supplier’s market standing with a single click, etc.

Sales-related documents

Quotes

Some businesses require a written quote. A potential customer often requests quotes from several companies, and presenting a professional document works in your favor, in addition to the price offered. From the very first contact, you create a customer record that lets you link the quote, which is automatically added to that person’s history.

The quote should display several elements: your and the customer’s contact details, the date and validity period, a detailed description, and payment terms (which may require a deposit with the order).

If you work outside the euro zone, you need to be able to draw up your quote by converting the offer into the relevant currency. For this, the software must have this option and be connected to the European Central Bank, so as to convert currencies at the exchange rate in effect at the moment the quote is issued.

The purchase order

Once your offer is accepted, you can ask for the transaction to be formalized by signing the quote, or you can issue a purchase order that the customer must return signed.

Since the purchase order is derived from the quote, it should be generated with a single click.

The delivery note

Among the chain of sales-related documents, the delivery note provides a written record of your service, which spares you from claims later on. Issued from the purchase order or the quote, it can specify certain terms, particularly if there’s a remaining balance you commit to delivering later.

Invoicing

Once your service is complete or your goods delivered, you move on to invoicing. This too is based on the quote, purchase order, or delivery note, and is generated automatically.

To be legally valid, an invoice must include various mandatory particulars. If it doesn’t comply, you risk a fine in the event of an audit and, in the event of a dispute with your customer, you won’t have grounds to win, since you’ll be at fault. Professional invoicing software automatically fills in all the data and ensures your document is legally compliant.

If you run an e-commerce business, the invoice is often attached to the delivery, without going through other prior documents.

Invoicing for subscriptions and recurring purchases

If you offer recurring deliveries or services, your software should provide an option to automatically issue the corresponding invoices. For example, you might offer a subscription, regular maintenance, or the repeated supply of consumables.

You should be able to configure your invoicing according to the frequency of your choice: weekly, biweekly, monthly, annually, or any other frequency you choose.

You also need to set the duration of this subscription. It can be fixed, requiring the signing of a new contract to continue, or unlimited if the order renews automatically.

Correcting invoice errors

Once your invoice has been sent to your customer, it can no longer be modified. It’s therefore essential to check everything before sending. Since a mistake is always possible, you must issue a credit note, partial or full, before rebilling for the correct service.

Invoice numbering is strictly regulated: you cannot delete an invoice number or give the same number to two invoices. Nor can you skip a number between two invoices. All these errors are automatically avoided thanks to invoicing software like Bizyness.

Payment of your invoices

You need to closely track the payment of your invoices. The software lets you record the payment method and the date it was made. You should have access to an overview that instantly shows you late payments and lets you follow up with the customer.

Costs and expenses

You should never confuse your revenue with your margin, which gets eaten into by your costs and expenses. With software that gives you good visibility into your expenses, you can think more effectively about a strategy to reduce them and mechanically increase your margin.

Expenses cover the purchase of raw materials that you transform or, if you’re a retailer, the wholesale purchase of the product you’ll resell. You should also record all costs related to running your business: advertising and promotion costs, travel, entertainment, office supplies, etc.

With a standard company, you can optimize these expenses by allocating them within your accounts, but this isn’t the case with a sole proprietorship. In any case, you should focus on keeping these expenses to a strict minimum.

Professional invoicing software also lets you keep the supporting documents for these expenses.

Fixed costs

You should also look at your fixed costs, which aren’t always as unavoidable as they seem. Rent, insurance, vehicle costs, etc., are unavoidable, but you should find ways to reduce them.

By accessing a summary provided by the software, you instantly identify the priority areas to improve.

VAT invoicing and reporting

Since the reform of the sole trader status, once you exceed a certain threshold, you must charge VAT (Value Added Tax) and collect it on behalf of the State. This means adding VAT to your invoices and reporting it to the tax authorities.

VAT is the indirect tax that brings in the most revenue for the State, accounting for nearly half of its tax receipts. Audits are strict and back-tax adjustments are painful in the event of non-compliance. Professional invoicing software is designed to warn you when you cross the critical threshold and to automatically include VAT where applicable.

— For merchants, the sole trader revenue threshold is €176,200; beyond that, they must change status. The VAT exemption threshold is €85,800, and the increased threshold is €94,300.

— For tradespeople and self-employed professionals, the sole trader revenue threshold is €72,600, before changing status. The VAT exemption threshold is €34,400, and the increased threshold is €36,500.

If you exceed the increased threshold during the year, you must charge VAT from the first day of the month in which the threshold is exceeded. You then need to send corrected invoices to customers billed between the first of the month and the day the threshold was exceeded.

If your revenue falls between the exemption threshold and the increased threshold for two consecutive years, you must charge VAT starting January 1 following those two years.

Professional invoicing software automatically handles this headache and generates the reports you need to send to the tax authorities. It also lets you factor the VAT amounts you’ll need to remit into your forecast budget.

Keeping mandatory and optional accounting records

As a sole trader, you must keep certain records up to date, which may be subject to review by the tax authorities. In addition, some non-mandatory reports are recommended to help you anticipate expenses in your forecast budget.

The purchase register

You’re required to keep a purchase register listing the expenses you’ve recorded as costs. The software automatically factors in deductible VAT once you’ve exceeded the exemption threshold.

The revenue ledger

The other mandatory document is the revenue ledger. It lists the services you’ve invoiced, and the accounting software syncs it automatically.

URSSAF contributions

Sole traders report their revenue to URSSAF, which then calculates the amount of contributions owed. Reporting is monthly or quarterly, and you must not miss a single deadline.

Effective professional invoicing software forecasts these contributions and calculates them as your sales come in. This way, you have no unpleasant surprises on reporting day, and this real-time estimate lets you set the amount aside. A reminder tells you when to file your report.

Communication with external parties

Accounting software must take into account your external contacts, as well as the relationship with your online store.

Automation tools

It’s important that your software is compatible with automation tools like Zapier. Anything that can be automated saves you valuable time to work on your business strategy.

Relations with external contacts

Accounting exports let you create documents in just a few clicks, ready to send to various contacts. This could be your banker, from whom you’re seeking a loan, investors who might help finance your business, or an accountant or chartered accountant who advises you, etc.

Syncing with your online store

Professional invoicing software must sync with your online store (Shopify, WooCommerce, Wizishop, etc.). This way, running your store is automated and you no longer waste time managing its bookkeeping.

You’ll find your order history in your interface, letting you generate statistics, calculate your margins, manage invoicing, payments, etc.

Professional invoicing software helps you avoid any accounting error that could lead to a tax adjustment or cost you credibility in a dispute. It also saves you considerable time that you can devote to growing your business. It’s your most reliable ally in guiding you toward success.