With more than 50 clients and a half dozen people working for her, Brenda Turner's business, High Park Dog Walks, was doing well. Invoicing her customers, however, was growing not only complicated but time-consuming. Then her brother-in-law, an independent contractor, suggested she try Toronto-based FreshBooks, an online accounting and invoicing service with some 4.5 million users in 130 countries.
FreshBooks is one of several options for small business owners who, as spokesman Stuart MacDonald put it, "realize that the stuff they have to do gets in the way of the stuff they love to do."
Newcomer Wave Accounting, for example, another online accounting application, includes an invoicing tool. "Anybody who needs to bill their clients for any work they've done can put together an invoice very quickly and easily and e-mail it directly to their customers," said Rob Maurin, its vice-president of community, content and communications.
Wave sends users regular alerts, telling them which invoices are due or past due. It also helps flag incoming payments through a link to a bank or PayPal account.
BPM Outsourcing, based in Markham, Ont., meanwhile, also provides monthly reports showing accounts that are outstanding and what has been paid. If payments are delayed, BPM staff will call debtors to remind them to pay up. "We leave our clients to be the good guys," joked the company's chief executive officer, Ron Johnson.
"What that does," he added, "is enable them to bring their cash in faster and minimize their need to use bank loans or bridge financing."
Indeed, for smaller operators, prompt payments and managing cash flow go hand in hand. "A small business can't afford to finance their accounts receivables," warned Mr. Johnson. Yet harried business owners sometimes forget to invoice.
Worse, they underestimate the amount of time they work for their customers. "FreshBooks takes all of the hassle associated with time tracking and makes it painless," Mr. MacDonald said. "You can set up for a specific customer and project, then just click and a time tracker pops up on your screen. It will keep track of when you're doing the work for that client or on the phone with that client.
"When it comes time for you to issue that invoice," he added, "you have it ready to go."
FreshBooks' research shows that their users get paid on average 11 days faster, he said, and save five hours of time a month. "Because the online invoicing is easy, people tend to send out the invoices sooner, and clients pay them more quickly," Mr. MacDonald said.
For Ms. Turner, of High Park Dog Walks, online invoicing is a definite improvement over the days she had to wait for her clients to leave a cheque or cash on the dining room table.
FreshBooks allows her dog walkers to put their time sheets into the system. "From that I can instantly invoice the clients," she said. "I don't have to go into Excel and start adding up. Everything just follows through neatly. I also have an online scheduler that will talk to FreshBooks through an API (application programming interface). It will automatically allow the contractors to invoice me and me to invoice the clients."
The resulting impact on her cash flow has been "wonderful," she added. Now her clients click onscreen and payment goes through either PayPal or a credit card instantly. "And [the clients]love it because they get the points on Visa or MasterCard," she said.
"People definitely pay quicker," agreed Cavan Kelly, owner of the technology consultancy JC Kelly. He has been using FreshBooks for seven years. "Part of that is the invoices get out quicker. If they haven't paid in 'X' number of days, a reminder goes out automatically. I don't have to think about it," he said.
While Wave is ad-supported and therefore free, FreshBooks fees start at $19.95 a month for users with three or more customers. For smaller businesses, the service costs nothing.
As the economic downturn has given increasing numbers of people the incentive to strike out on their own, online accounting service providers are experiencing a major growth spurt.
That phenomenon is global, Mr. MacDonald said. Whether it's the professional who has been laid off or the young person pursuing a dream, "a lot of people are taking the bull by the horns and have decided they're going to go their own way and try to create a future they can feel good about for themselves," he said. "Our role is to be there for them, in their corner."