The way we work is fundamentally changing: from how we find jobs, to tracking work, and getting paid. For a growing number of people, every step is touched by technology. In a new series on the Payable blog, we’re going to deep dive into the different tools and players driving this change.
What are time tracking and invoicing tools?
When running a one-person or small business, you’ll likely need a way to invoice clients for your work or services. For example, if you’re a freelance designer and need to track your time on a project and easily transfer that time to an invoice. On the flipside, if you’re a small business with contractors, you need a way to manage their workflows, approve (and store) invoices, plus pay them.
A crop of new tools have emerged to make it easier than ever to manage your own business (whether you’re a business-of-one or a 20-person-plus operation). These days, the majority of time tracking and invoicing tools are web-based and available on multiple devices (stored “in the cloud”). Many of the top options come with additional services like sending and receiving payments online, or integrating with project management tools (like Basecamp) and accounting tools (like Quickbooks).
As with most business tools, finding the right software really depends on your business’ size, needs and the type of work you do. Below we’ve created a thorough comparison of the leading time tracking and invoicing products to help you discern the best fit.
What are the key features to look for?
Not all products are created equal and key features set several ahead of the pack. We’ve chosen to compare only the top 6 offerings according to these key features:
Built for very small to medium-size teams: These tools are relied upon by both one-person business and even companies with 100+ employees, but are ideal for small businesses.
Cost conscious: Depending on your size and needs, most pricing plans range from free to $99/mo.
Custom work types and rates: Not every worker is paid hourly -- some are paid by the project, word, or webpage. Likewise, you’re not likely to pay every worker the same rate or invoice clients at the same rate. Look for a tool that will easily allow you to customize your work types and rates.
Time tracking: Depending on the type of work you do, you may need a time tracking tool that allows you to set a timer or run in the background to make sure you’re accurately keeping track of hours. Most of the products we compare have this timer feature, plus take it a step further by having that time easily rollover into an invoice.
Expense Tracking: You may need to keep track of mileage or any additional tools or products you’ve purchased in order to complete a project or while on the job. Look for a product that allows you to enter expenses and ideally keep a record of that expense (like recept capture via a mobile app). This is essential to have for both your accounting records and any contractors.
Online payments and fast payment speed: One of the biggest pain points for small businesses and freelancers is accepting and sending payments. If you can make paying/getting paid as painless as possible by integrating it into the tracking and invoicing flow, than workers are likely to get paid faster and companies waste less time coordinating checks and other payment options.
Automated payment reminders: According to one study, freelancers in New York lost $3-5 billion in earnings due to client nonpayment and the opportunity costs of chasing late payments. This feature enables workers to waste less time chasing payments.
Taxes and compliance: Working with several W-2 employees? You’ll likely need a platform that integrates with accounting software (Quickbooks, Xero) or has built-in accounting features (Freshbooks and Wave). Similarly for 1099 contractors, look for an option that allows you to export invoicing and payment data to accounting tools or has an integrated accounting feature (Payable).
Accessibility: Look for a tool that you can access from both smartphone and desktop/laptop. Especially for time tracking and expense tracking, having a mobile option makes record keeping so easy to manage.