Billing software helps businesses create and send invoices, keep track of payments, and stay up-to-date on financial records. It can make one of the most important and sometimes frustrating parts of running a business – getting paid – much easier. Think about the amount of time it typically takes for a business to chase down invoices, double-check calculations, or send payment reminders. Billing software can automate most of that work, which can make a significant difference – especially for small businesses.

The global billing and invoicing software market is expected to grow at a compound annual growth rate of about 7% from 2025 to 2034 as more companies move towards automation. Below, we’ll unpack what billing software typically costs for a small business, what the return on investment (ROI) outlook is, and how to choose a solution that works best for your business.

What’s in this article?

• What does billing software do?
  
• Why do small businesses need billing software?
  
• What factors affect the cost of billing software?
  
• How can you choose affordable billing software?
  
• What is the ROI of billing software for small businesses?
  
• How much does entry-level and advanced billing software cost?
  

What does billing software do?

Billing software automates many aspects of the payment process, from invoice generation to tax reporting. Here’s a closer look.

Invoice creation

Billing software automates the creation of professional invoices, which include details such as the client’s name, products or services provided, payment terms, and tax calculations. It often includes templates that you can customise with your branding, such as a logo and company colours.

Payment tracking

Billing software tracks whether invoices have been paid, are still outstanding, or are overdue. It also sends reminders to clients for unpaid invoices.

Recurring payments

Billing software manages subscriptions or recurring billing for businesses with ongoing services or products. It also processes regular payments automatically.

Integration with other systems

Many billing platforms integrate with accounting software, customer relationship management (CRM) systems, and payment processors, so you can manage your finances and customer relationships in one place.

Tax management

Billing software automatically calculates taxes such as value-added tax (VAT) or sales tax based on local laws and applies them to invoices. This helps ensure compliance with tax regulations and saves time during tax season.

Reporting and analytics

Billing software provides insights into your business’s financial health, such as revenue trends, overdue payments, and cash flow forecasts. This data can help you make informed decisions and identify areas for improvement.

Multiple payment options

It’s common for billing software to support a variety of payment methods, such as credit cards, bank transfers, and digital wallets.

Why do small businesses need billing software?

Billing software saves you time by automating tasks such as creating invoices, tracking payments, and reminding clients to pay. It keeps your billing system organised and tracks payment status on invoices, so you always know who has paid, who hasn’t, and which invoices are overdue. The software can also give you better visibility into your cash flow, with dashboards and reports showing how much money is coming in. Automated calculations ensure accuracy on prices and tax rates, and having a single system with all your billing data makes it easier to pull reports when filing taxes. These benefits can have a major impact on your business’s bottom line.

What factors affect the cost of billing software?

The cost of billing software can vary widely depending on several factors. Basic software for simple invoicing is often inexpensive or even free. The price increases if you need advanced features, such as recurring billing, multiple payment gateways, tax calculation, or integrations with accounting software. Many billing platforms operate on a subscription basis, with customers paying based on the plan they choose, usually monthly or annually. Premium plans with more features cost more than entry-level plans.

Here are some other factors that impact the cost of billing software.

Number of users

Some platforms charge based on the number of users who access the software. A single-user plan will be cheaper than one designed for a team.

Scalability

Software designed for larger businesses or high transaction volumes often has a higher price tag due to its enhanced capacity and reliability.

Customisation options

Expect to pay more for software with the option for personalised invoices, branded portals, or tailored features.

Cloud-based vs on premise

Cloud-based billing solutions often come with ongoing subscription fees, while on-premise software might have a higher up-front cost but fewer recurring charges.

Integration capabilities

Software that integrates with other technology you use – such as accounting, CRM, or inventory management systems – might cost more up front, but it can save money in the long run by reducing separate systems.

Support and maintenance

Premium customer support, regular updates, and additional security features (such as fraud detection or encryption) often come at a higher price.

Payment gateway fees

If the software comes with built-in payment processing, transaction fees might apply. These fees will vary depending on the payment method used (e.g. credit card, ACH transfer (in the US)).

Industry-specific features

Software customised for certain industries, such as software-as-a-service (SaaS) businesses with subscription billing, might cost more than generic options.

How can you choose affordable billing software?

To find the right billing software at the right price, start by focusing on what matters most for your business. Do you handle recurring payments, subscriptions, or usage-based billing? Understanding your priorities will help you narrow down the options. Beyond your specific business needs, here’s what to consider when making this decision:

• Value: Think about what you’re paying for, whether it’s features that save time, integrations that reduce administrative work, or tools that help you collect payments faster. Some pay-as-you-go models, in which you only pay for what you use, are especially useful if your transaction volume varies.

• Integration: Good billing software should work seamlessly with the systems you’re already using, such as your payment processor, CRM, or accounting software. If it doesn’t, you’re facing extra time and money spent on alternative solutions.

• Customisation: Branding options, such as adding your logo to invoices or offering a customer portal, can make your business appear more polished.

• Accessibility: If you want to manage billing from anywhere, you’ll need cloud-based software. An intuitive interface can also save you and your team time.

• Ability to grow: Even if you’re starting small, think ahead for the long run. Choose software that can handle increased transaction volumes or more advanced billing needs for when the time comes.

Before committing to a subscription, use free trials or test pay-as-you-go plans to confirm whether a platform will work for your business.

What is the ROI of billing software for small businesses?

The return on investment of billing software for small businesses can be substantial. Over a year, the combination of time savings, faster payments, error reduction, and improved customer retention could equal thousands of pounds. Here’s a closer look at billing software’s ROI:

• Saved time: Automating tasks such as creating invoices, tracking payments, and sending reminders reduces hours spent on administrative work. If you save 5 hours a month and your time is worth £50 per hour, that’s £250 per month back in your pocket.

• Faster payments: Billing software offers customers ways to pay using multiple payment methods and ensures invoices go out on time. These features can reduce delays and improve cash flow. If faster payments help you avoid late payment fees or interest on a line of credit, those savings can add up fast.

• Fewer errors: Errors in manual billing, such as incorrect charges or missed invoices, can lead to lost revenue, disputes, and damage to your reputation. Automated systems can significantly reduce those risks. Recovering just one £500 underbilled invoice due to an error correction could justify the software cost for months.

• Customer retention: Well-designed invoices and easy-to-use portals can leave a positive impression on customers, who are more likely to trust and continue working with businesses that make their payment process simple and transparent. Retaining one loyal customer due to a smooth billing process can result in years of repeat business.

• Fewer accounting needs: Many types of billing software syncs directly with accounting software. This feature can reduce the need for additional accounting services. Saving £500 annually on tax preparation or accounting fees, for example, can directly boost your bottom line.

• Reduced switching costs: Billing software is often built to scale. Whether you’re adding more clients or expanding into subscription-based services, the right platform grows with you. You could avoid an expensive one-time system migration cost by choosing scalable software from the start.

• Financial insights: Detailed financial insights from billing software can help you identify trends, adjust pricing, or spot opportunities to cut costs. Recognising and addressing a 10% underpricing issue across £100,000 in annual sales would recover £10,000.

How much does entry-level and advanced billing software cost?

Entry-level billing solutions can range from being free to around £20 per month. They typically come with basic features suitable for small businesses or freelancers, such as simple invoicing, payment tracking, and limited customisation.

As your business grows, you might need additional features and want an upgrade to more advanced solutions. Stripe Billing offers flexible pricing, so you can adjust your plan as your business needs change. Here are the two ways businesses can pay for Stripe Billing:

• Pay-as-you-go model: This option charges a small percentage of your total billing volume with no recurring fees. You pay only for what you use.

• Subscription plan: Stripe has a monthly subscription plan for more predictable costs. This covers up to £70,000 in billing volume per month, and any additional volume is charged a small percentage.

When deciding between the pay-as-you-go model and the subscription plan, consider your business’s billing volume and need for predictability in expenses. The pay-as-you-go model offers flexibility for fluctuating volumes, while the subscription plan provides cost certainty for higher, consistent billing amounts. Beyond the billing fees, standard payment processing fees also apply.