Best invoicing software for startups and small businesses

For early-stage founders and small business owners, it can be tempting to treat invoicing as an afterthought. You send an invoice, wait, follow up, if needed, and eventually get paid. However, the problem is that this approach doesn’t scale. 

As soon as invoices become inconsistent, delayed, or unclear, cash flow becomes harder to predict. For early-stage companies without a dedicated finance hire, that uncertainty creates friction everywhere else, from payroll planning to hiring decisions. 

Good invoicing software doesn’t just help you send invoices. It helps you standardize your billing process, reduce delays, and see what money is actually coming in. That makes it an indispensable operational tool. In this guide, we help break down what to look for when choosing invoicing software, present the best options by category, and highlight common mistakes to avoid.

Early-stage teams don’t need every billing feature available on the market, but they do need tools that reduce manual work and make payments predictable. Here are the key features to look for.

Automation that reduces follow-ups

At a minimum, invoicing software for startups and small businesses should:

• Generate invoices consistently
• Send reminders when invoices go unpaid
• Support recurring invoices for ongoing work

These features remove the need to manually track who owes what and when.

Simple workflows

If invoicing is handled by a founder or operator, usability matters. You should be able to create, send, and check an invoice without needing to set up complicated workflows or learning obscure accounting concepts.

If a tool adds steps instead of removing them, it’s the wrong fit.

Accounting compatibility

Even if you’re not using accounting software today, you likely will in the future. Invoicing tools that integrate with systems like QuickBooks or Xero reduce rework later and keep revenue data consistent.

Mercury’s guide on how to improve invoicing processes covers the ways that these handoffs tend to break down as volume grows.

Clear and professional invoices

Invoices are often the only financial document that your customers see. Clear layouts, basic branding, and defined payment terms reduce confusion and disputes.

If you’re unsure what to include, Mercury’s invoice terms and conditions guide outlines common standards.

Pricing that matches your stage

Some tools bundle invoicing into expensive plans meant for larger teams. For early-stage businesses, predictable pricing matters more than feature breadth.

Payment options

Invoices that are easy to pay get paid faster. And offering multiple payment options means you can accommodate your customers’ varying needs. Software with built-in card and ACH payments reduces friction, especially for smaller customers.

Different tools work well at different stages. These categories reflect how most early-stage teams actually operate.

Best overall invoicing software

FreshBooks

FreshBooks is a solid option for teams that want structure without complexity. It works well when invoices are tied to time or project-based work and when consistency matters more than customization. For many service businesses, this software strikes a good balance between control and ease of use.

Why it works:

• Simple invoice creation
• Automated reminders
• Built-in payments

Best for: Service-based businesses and early-stage startups that want professional invoices with minimal setup

Best invoicing software for solopreneurs

Wave

Wave remains one of the best free invoice software options for small business owners just getting started. It’s best suited for low-volume invoicing where simplicity is the priority and manual processes are still manageable. As billing becomes more frequent or complex, most teams eventually outgrow it.

Why it works:

• Free invoicing with unlimited invoices
• Simple setup and clean templates
• Optional paid payments add-ons

Best for: Freelancers and solopreneurs sending basic invoices and managing cash flow manually

Best invoicing software for growing startups

QuickBooks Online

QuickBooks includes more than invoicing software. Its billing features are robust, especially once volume increases. Using this software makes sense when invoicing, expense tracking, and reporting need to live in one system. The tradeoff is setup time and ongoing maintenance, which can be more time consuming than standalone invoice tools.

Why it works:

• Invoicing and billing automation
• Detailed reporting
• Wide ecosystem of integrations

Watch out for: It can feel heavy for very early teams, and you may end up paying for features you don’t need yet.

Best free invoicing software option

Mercury's invoice generator

If you need to send an invoice quickly without adopting new software, Mercury’s free invoice generator is a great place to start. It’s useful for testing invoice formats or handling one-off billing without committing to a platform. It doesn’t replace invoicing software, but fills a clear gap when speed and simplicity matter.

Why it works:

• Free and browser-based
• No account required
• Clean, professional invoices

Best for: Founders who need to send invoices immediately or validate a workflow before choosing full software

Best invoicing software for global businesses

Xero

For startups working internationally, Xero stands out for its currency and global accounting features. It handles exchange rates and international reporting more cleanly than many alternatives. That matters once cross-border invoices become routine, rather than occasional.

Why it works:

• Multi-currency invoicing
• International compliance support
• Integrates with global payment tools

Best for: Distributed teams and startups that bill customers across borders

Best invoice automation software

Zoho Invoice

Zoho Invoice is designed for teams that want more control over billing logic. It’s a good fit when invoices follow rules or patterns that can be automated reliably. But for simpler billing models, this flexibility may be more than you need.

Why it works:

• Custom invoice rules
• Automated workflows
• Competitive pricing

Best for: Businesses with higher invoice volume or more complex billing needs

Invoicing is only one part of the money movement lifecycle. What happens after an invoice is paid matters just as much, and Mercury can help streamline and centralize your workflows

Mercury doesn’t replace invoicing software. It connects what happens next.

Cleaner accounting handoffs

Mercury integrates with tools like QuickBooks and Xero, allowing invoice payments to flow directly into your accounting system. This reduces manual reconciliation and keeps revenue data aligned with actual cash.

If you’re evaluating accounting tools, Mercury’s overview of the best accounting software for startups provides useful context.

One place to see incoming and outgoing cash

When invoices are paid into your Mercury account, you can see incoming revenue alongside cards, bill pay, and transfers. That consolidated view helps founders understand real cash position, not just outstanding invoices.

A financial stack that scales with you

Many startups change invoicing tools as they grow. Having a financial backend that doesn’t need to change each time makes the transition smoother. Mercury provides that foundation. You can learn more about Mercury invoicing here.

Even good tools can cause problems if they’re mismatched to your company’s stage. Here are the most common mistakes startups and small businesses make:

• Choosing for features, not workflows: It’s easy to overestimate how much functionality you’ll use. Most early-stage teams benefit more from simplicity than from advanced billing logic.
• Ignoring downstream systems: An invoicing tool that doesn’t connect cleanly to your bank or accounting software creates manual work after the invoice has been sent, including tracking payments and cash position.
• Locking into tools that don’t scale: Free tools can be useful early on. Just make sure there’s a clear path forward when invoice volume increases.

Choosing invoicing software is less about finding the most powerful tool and more about choosing one that fits how your business actually operates today. The right choice reduces friction now and won’t force a painful change later as your company’s customer volume and complexity grow.

The right invoicing software helps you to get paid on time and spend less effort managing cash flow.

Start with tools that match how your team works today. Make sure to choose invoicing software that connects cleanly to the rest of your financial stack. And leave room to grow, so you won’t need to rebuild your systems later.

If you want a simpler way to connect invoicing, payments, and spend, Mercury provides infrastructure that supports those workflows as your business evolves.