February 17, 2021 en_US A billing system is the process a business uses to bill and invoice customers. Learn how to set up a billing system for small businesses. https://quickbooks.intuit.com/cas/dam/IMAGE/A3QFwGNW1/billing-system-how-to-set-up-feature-us.jpg https://quickbooks.intuit.com/r/getting-paid/billing-system/ How to set up a small business billing system

How to set up a small business billing system

By QuickBooks February 17, 2021

As a small business owner, getting paid is integral to your business’ success. After all, if you’re moving tons of product but not getting payments on time, your cash flow and ability to operate will be negatively impacted. The billing software you choose can automate back-office tasks and reduce the number of late payments you receive. In turn, this lets you prioritize business growth rather than spend hours manually tracking down late invoices or inputting information line by line. Great accounting software streamlines your business processes and keeps your books in order.

Keep reading for comprehensive explanations of billing systems and what to focus on when comparing different solutions. Or you can jump directly to a section you’d like to learn more about.

What is a billing system?

At its most basic definition, a billing system is the process by which a business bills and invoices customers. Billing systems often include payment software that automates the process of collecting payments, sending out recurring invoices, expense tracking, and invoice tracking.

Illustration of laptop and form with text “Billing system importance”

Purpose of a billing system: Why is a billing system important?

Billing software helps ensure that your customers have a streamlined way to pay for goods and services. Billing services are critical for small businesses because they offer

  • Administrative control and supervision over payments and payment tracking
  • Payment and payment-agreement transparency between your small business and your customers
  • Ability to manage your company’s cash flow more easily than manual invoicing
  • Billing process automation that helps reduce errors automatically by compiling costs and estimates
  • Ability to optimize business operations and reporting practices

How to set up a billing system

Small business billing systems include necessary features like payment tracking, integrated payment processing, accounts receivable, accounts payable, and many more. You can learn more about the most critical components of a billing system in the sections below.

Data input

When you’re setting up your billing system, it’s important to be able to create customer profiles. You’ll need a place to input important details like customer or client names, billing addresses, and terms of payment. Having this information on hand helps with your customer relationship management (CRM).

Besides customer information, it’s also crucial to record and verify information about third-party payers like insurance companies. Smart accounting systems allow you to both input and verify this kind of information.

In addition, you’ll want a billing system that allows you to store product and service information. Depending on your business, this might include prices, quantities, descriptions, and discounts.

The ease of inputting this information is paramount because you don’t want to spend an excessive amount of time figuring out an inefficient billing platform. Usability should be a major feature to look for when you’re evaluating different billing solutions.

Billing codes

Billing codes are particularly important for tracking money and categorizing the products or services you offer. Codes might identify consultations, supplies, products, devices, services, or equipment. You can also leverage billing codes to assess how you spend your resources and time. Recognizing larger price patterns and resourcing needs can help when you grow larger and need to focus more on enterprise resource planning (ERP).

Integrated payment processing

It’s always a good idea to accept as many payment methods as possible. Your customers might pay you in cash, by check, through an online payment system like PayPal or Stripe, or by credit or debit card. It’s in your best interest to provide customers with flexibility in the payment methods you accept.

Payment tracking

In the U.S., a majority of invoices are paid late, but this is not always the consumer’s fault. In fact, payments are often late because of inaccurate invoicing.

61% of late payments are due to incorrect invoices

To limit delinquent payments, you can configure your billing system to remind you of approaching due dates. This prompts staff to send out payment reminders for customers who have an impending due date.

Your billing system should also make it simple and straightforward to find and contact customers with delinquent accounts.

Some billing software even allows you to manage collection services for past due debts directly from the billing system.

Safety and security

Any kind of invoicing or billing system software will access sensitive bank and financial information that might include credit scores, income, or Social Security numbers. Since this information is private, it should only ever be accessed by authorized users who have permission to do so.

If you accept credit card payments, you’ll need to ensure that your billing platform meets the payment card industry standards. This includes regular updates to enhance the overall network security.

How to use QuickBooks to manage customer billing

QuickBooks is an excellent invoicing software and accounting software that seamlessly integrates with your workflow and offers robust functionality. QuickBooks also automates many manual aspects of the billing process. As a result, you save time and resources. Below, we’ll dive into some of the main benefits of using QuickBooks for your small business accounting needs.

Customize your invoices

It’s important to send out professional invoices that exude professionalism. Luckily, with QuickBooks you can personalize your own invoice template with your company’s logo and colors.

You can also set up recurring invoices with customers that you bill regularly.

QuickBooks invoicing software speeds up invoicing by up to 37%.

Add billable hours

You can automatically add billable hours to invoices with Google Calendar, TSheets, or QuickBooks time-tracking. This is especially helpful if you work as a freelancer or contractor.

Accept online payments

Using QuickBooks Payments¹ as your billing solution allows you to accept many payment methods, making it easy for customers to pay you. Customers can pay with a credit card, debit card, or ACH bank transfers. Plus, you can accept a customer’s online payments directly through online invoices.

Get real-time notifications

With QuickBooks’ instant notification system, you’ll know exactly when customers view their invoices and get real-time alerts when they pay. You can also use automated payment reminders.

Automatic matches

With revenue recognition, QuickBooks automatically matches payments with invoices so your books are always in order no matter what payment method your customers choose.

Accurate invoices

You can customize and send multiple invoices to your clients without relying on manual billing processes. With QuickBooks Online Advanced, you can use batch invoicing to create invoices 37% faster² and import hundreds of invoices at once.

Flexible pricing

QuickBooks Online uses a subscription-based pricing model, and QuickBooks Payments is free to access with a QuickBooks Online subscription.

Different pricing levels match your business model and needs whether you work with freelancers, contractors, or clients, making QuickBooks a configurable accounting system that provides you with everything you need to accept payments and organize and manage your books.

Takeaways: Billing systems and your small business

Getting paid is an incredibly important part of ensuring that your business runs smoothly. Having a well-organized billing system is one of the best ways to send invoices and receive payments for products or services rendered. Accounting software like QuickBooks allows small business owners to keep their payments, invoices, and other essential accounting elements organized. And the less time you spend on back-office tasks means more time to spend on what really matters: growing your business.

QuickBooks’ billing software serves as a virtual general ledger that gives small businesses the functionality necessary to streamline business operations.


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  1. QuickBooks Payments account: QuickBooks Payments account subject to eligibility criteria, credit and application approval. Subscription to QuickBooks Online may be required.
  2. QuickBooks Online Advanced – Batch Invoicing and Create Invoices 37% Faster claim: Based off of tests comparing QuickBooks Online regular invoice workflow with QuickBooks Online Advanced multiple invoice workflow. QuickBooks Online Advanced supports the upload of 1,000 transaction lines for invoices at one time. Number of invoices imported depends on the number of transaction lines in the .CSV file. Customers received remuneration for participating in the tests.

Real-time access requires connection to and participation by your financial institution.

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