Still doing invoices in a spreadsheet? How to pick invoicing software for a small business
⏱ In about 7 minutes
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In this article
The short answer
Short answer
If you send more than a handful of invoices a month, move to invoicing or accounting software that sends invoices, takes online payments, chases late payers and connects to your bank feed. You'll stop retyping numbers, and you'll know at a glance who owes you.
- Want full accounting your accountant already knows: Xero or QuickBooks.
- Mostly invoicing clients for your time (freelancer or service business): FreshBooks.
Check which one your accountant or bookkeeper uses before you choose. It saves money at tax time.
Why spreadsheets stop working
- No reminders. Nobody chases the invoice except you.
- No link to your bank. Matching payments means scrolling through statements.
- Easy to break. One wrong formula or overwritten cell and your totals are off.
- Hard to hand over. Your accountant gets a file they have to rework.
business.gov.au recommends you "use accounting software to manage invoices, sales and customer accounts", which "helps you keep track who you've invoiced and who has paid." (business.gov.au)
Fix it: step by step
Step 1: List what you actually need (15 minutes)
- How many invoices and clients per month?
- Do you need quotes, recurring invoices or time tracking?
- Do you need to track sales tax or GST?
- Does your accountant need access?
- How many people in your team will use it?
Step 2: Ask your accountant which software they use (5 minutes)
Many accountants work mainly in one or two products. Matching them makes year-end easier.
Step 3: Compare plans on the limits that matter (20 minutes)
Use the table below. Watch the invoice or client limits on entry plans.
Step 4: Start a free trial and send a test invoice (30 minutes)
Send an invoice to yourself. Check how it looks, how you'd pay it, and how reminders work.
Step 5: Connect your bank feed and move your clients (1–2 hours)
Import your client list, set up your invoice template with your logo and payment terms, and connect your business bank account.
Step 6: Keep the old spreadsheet, read-only (5 minutes)
Don't delete old records. In Australia, the ATO says you generally need to keep records for 5 years. (ATO)
Comparison: what the official pages say
All details from official vendor pages, checked 18 Oct 2026 (Xero promo re-checked 19 Oct 2026). Not hands-on tested. No ratings. Prices change, and all three showed time-limited discounts when we checked; the prices below are the standard listed prices.
| Factor | Xero (US) | FreshBooks (US) | QuickBooks Online (Australia) |
|---|---|---|---|
| Entry plan | Early: US$27/month | Lite: US$23/month | Simple Start: A$33/month |
| Entry-plan limit | Quotes and 20 invoices, 5 bills | Invoices to 5 clients | 1 user plus access for your accountant |
| Next plan up | Growing: US$59/month (send invoices and quotes, auto-reconcile) | Plus: US$43/month (50 clients) | Essentials: A$60/month (3 users, recurring transactions) |
| Bank reconciliation | Yes ("Reconcile bank transactions") | Listed: automated bank import, bank reconciliation | Listed: automated bank feeds |
| Receipt capture | "Smart Document Capture" | Expense receipt scanning (from Plus) | Receipt capture |
| Accountant access | "No per-user license fees" | "Give your accountant access" (from Plus) | "Plus access for your accountant" |
| Free trial / promo | Promo: 90% off first 6 months (US page, checked 19 Oct 2026) | Promo: 80% off for 4 months | 30-day free trial; promo 70% off for 6 months |
Australian Xero plans are priced separately in A$ on Xero's Australian page, and US FreshBooks prices are in US$. Check the page for your country.
Quick pick
Quick pick: invoicing and accounting software (product details from official vendor pages, checked 18 Oct 2026. Not hands-on tested. No ratings. Confirm prices on the vendor's site.)
- Best for most small businesses: Xero. Full accounting with invoicing, online payments, automated reminders and bank reconciliation. No per-user licence fees. → See our accounting guide
Best for freelancers billing clients for time: FreshBooks. Invoicing-led, with recurring invoices, late payment reminders and late fees. Watch the 5-client limit on Lite. → See our accounting guide- Australian businesses whose accountant uses QuickBooks: QuickBooks Online. Simple Start covers invoices and quotes for 1 user, plus accountant access. → See our accounting guide
What we'd avoid: honest limits
Free: the Small Business Password & Access Checklist
A 1–2 page checklist that turns this article into a to-do list: which accounts to protect first, how to set up shared access, and what to do when someone joins or leaves.
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Frequently asked questions
Is free invoicing software good enough?
For a few invoices a month, maybe. Once you need bank feeds, reminders and tax tracking, accounting software is usually worth it.
Can I switch later?
Yes, but it takes work. Export your data first and keep old records. The ATO says you need to be able to reconstruct your original data if your record-keeping system changes. (ATO)
Do I need accounting software or just invoicing?
If you also track expenses, GST/sales tax and bank transactions, you need accounting software. If you only bill a few clients, invoicing-led tools can be enough.
Is cloud accounting safe?
See our guide: Is my financial data safe in the cloud?
Related guides
- Accounting: our hub
- Clients pay late and I hate chasing them
- My bookkeeping is a shoebox of receipts
- My accountant wants access to my accounting software
Sources
Government bodies first. All links checked and loading on 18 Oct 2026.
- business.gov.au (Australian Government): How to invoice
- Australian Taxation Office: Overview of record-keeping rules for business
- Vendor pages (checked 18 Oct 2026): Xero US pricing · Xero AU pricing · FreshBooks pricing · QuickBooks Australia pricing
About our review process
We pick products from official information and say clearly when we haven't tested something hands-on. Commissions may influence which products we choose to cover, but not our assessment of them. See how we work.