Square Invoicing: What Merchants Need to Know and Alternatives

As businesses evolve in the digital landscape, managing invoices efficiently has become a vital component of financial health. Invoices Square provides small businesses with an affordable invoicing solution through Square's platform, but is it the best option for all merchants? At Swipesum, we delve into the nuances of invoicing, comparing Square to alternatives and offering insights based on the latest data and trends in the industry.

A Step-by-Step Guide to Efficient Square Invoicing

Getting Started with Square Invoices

What are Square Invoices?

Square Invoices is a free invoice generator that allows you to create and send professional-looking invoices to your customers. It’s a part of the Square Point of Sale (POS) system, which helps you manage your business and accept payments. With Square Invoices, you can create and send unlimited invoices, estimates, and contracts, facilitating invoice payments and streamlining your transaction processes.

The Case for Square Fees Invoice

Square invoicing simplifies the billing process for small businesses with a straightforward pricing model—charging 2.6% plus $0.10 per transaction. By using a square invoice, businesses can take advantage of itemized fields, various payment options, and customization capabilities, making it easier to manage their invoicing process.

However, as we have observed with many of our clients, this simplicity comes at a cost. Businesses often find themselves losing a significant chunk of revenue due to these transaction fees, especially when dealing with larger invoices. For instance, on a $30,000 invoice, Square’s fees can total $780.10, leaving only $29,219.90 for the business.

A Real-Life Story

One of our clients, a bookeeping firm, relied on Square for invoicing. While they appreciated the user-friendly interface, they were shocked to see how much they were paying in fees for invoice payments. After a thorough analysis with Swipesum, they transitioned to a more tailored invoicing solution through Bizinta, leveraging a very low-cost merchant account and payment gateway. This change not only saved them on fees but also streamlined their billing process, allowing them to focus more on client relations rather than administrative tasks.

Pricing and Plans

Square Invoicing offers a range of pricing plans to suit different business needs. The plans include:

• Free Plan: Send unlimited invoices, estimates, and contracts with no monthly fees or commitments. Processing rates apply, making it a cost-effective option for businesses that need basic invoicing capabilities without additional costs.
• Plus Plan: For $20/month, the Plus Plan offers discounted processing rates and additional features such as milestone-based payment schedules, multi-package estimates, and custom invoice templates. This plan is ideal for businesses that require more advanced invoicing features and want to save on processing fees.

Comparing Square vs. Merchant Account with Swipesum

When considering alternatives, we compared Square’s invoicing to a merchant account pricing structure, combined with Swipesum’s consulting services. NMI charges a gateway fee of $0.10 and a merchant account fee of 0.15% plus $0.15 per transaction, with a minimum fee requirement for ACH payments. Here’s how the costs stack up:

As shown in the table, the savings with a merchant account become increasingly significant as the invoice amount rises, making it a more viable option for businesses that frequently issue large invoices​.

Benefits of Using Square Invoices

• Faster Payments: Get paid quicker with flexible payment options, including credit cards, Google Pay, and ACH bank transfers.
• Custom Branding: Create custom invoices that reflect your brand and unique business identity.
• Automation: Automate your tasks with features like recurring billing and automatic payment reminders.
• Real-Time Tracking: Track your invoices and payments in real-time with the online Square dashboard.

Key Features of Square Invoicing

Square Invoicing offers a range of key features that make it an ideal solution for businesses looking to streamline their invoicing process. Some of the key features include:

• Unlimited Invoices: Send unlimited invoices, estimates, and contracts with no monthly fees or commitments, allowing you to manage your billing without worrying about additional costs.
• Recurring Invoices: Set up recurring invoices for weekly or monthly billing, making it easy to manage repeat customers and ensure consistent cash flow.
• Automatic Payment Reminders: Set reminders before, on, or after the due date of an invoice, ensuring timely payments from customers and reducing the need for manual follow-ups.
• Online Square Dashboard: Access and manage all your invoices, estimates, and contracts from the online Square dashboard, providing a centralized location for all your billing activities.
• Point of Sale App: Use the Square Point of Sale app to send invoices, estimates, and contracts on-the-go, giving you the flexibility to manage your invoicing from anywhere.
• Accept Payments: Accept payments from customers using various methods, including credit cards, Google Pay, and cash, offering convenience and flexibility to your clients.
• Payment Schedule: Set up a payment schedule that works for your business, including one-time, recurring, or milestone-based payments, allowing you to tailor your billing to your specific needs.
• Invoice Details: Add detailed information to your invoices, including itemized products or services, taxes, and discounts, ensuring clarity and transparency for your customers.
• Automatic Reminders: Set automatic reminders for upcoming or late payments, reducing the need for manual follow-ups and helping you maintain a healthy cash flow.
• Free Invoice Templates: Access free invoice templates that can be customized to fit your business needs, making it easy to create professional-looking invoices quickly and efficiently.

Creating and Sending Invoices

Step 1: Log in and Start a New InvoiceLog in to your Square account through the online dashboard or the Square Point of Sale app. Click on the “Invoices” tab and select “Send an Invoice” to start creating a new invoice. Choose a template or create a new invoice from scratch.

Step 2: Add Customer Information and DetailsAdd customer information, including name, email, and payment method. Enter invoice details, such as a unique name, custom message, and payment schedule. Choose between one-time and recurring invoices.

Step 3: Add Items to the InvoiceAdd multiple products or services to the invoice. Specify the quantity and add line adjustments. You can create new products or services as needed. Any new products or services created will be available for future invoices.

Customizing and Automating Recurring Invoices

Recurring Invoices
Set up recurring invoices to automate your billing process. Choose the frequency, start date, and end date for recurring invoices. Provide an option for customers to enroll for automatic payments.

Creating and Adding Square Contracts
Use Square Contracts to establish policies and payment terms. Add contracts to your invoices to gain authorization to charge cards saved on file, tailoring them to fit your business needs.

Managing and Tracking Invoices

Tracking and ReportingTrack your invoices and payments in real-time with the online Square dashboard. Access insightful reporting to gain critical insights into your business performance, helping you make informed decisions with Square Invoices. Additionally, understand the cost associated with different payment methods, including a percentage charge and a minimum fee for ACH payments.

Payment RemindersSet up automatic payment reminders to notify customers of upcoming or late payments. Customize your payment reminders to fit your business needs and send notifications via email or SMS.

Alternatives to Square Invoicing

As a group of payment processing consultants, we always recommend using a payment gateway and merchant account as an alternative to Square Invoicing. While setting up these systems may take roughly two hours longer than using Square, the financial savings you'll experience make it worthwhile. Platforms like Zoho Invoice, which support open gateways, should definitely be considered. Ultimately, the key advantages lie in the features offered by the merchant account and gateway, which can be tailored to meet the unique needs of your business.

A quick consultation with Swipesum can help you find the best solution at the best price. Our expertise in the payment processing landscape allows us to guide you through the options, ensuring that you select the invoicing solution that aligns perfectly with your operational requirements and financial goals. Reach out today to optimize your invoicing process!

The Data Speaks: Trends in Invoicing

The landscape of invoicing is rapidly changing, driven by technology and evolving business needs. Here are some notable statistics:

• E-invoicing Growth: The global e-invoicing market is expected to grow from $13.5 billion in 2023 to $60.9 billion by 2032, reflecting a CAGR of 17.7%.
• Automation in Accounts Payable: Currently, 68% of businesses still manually enter invoices, leading to an average processing cost of $15 and a processing time of 14.6 days​.
• Automation is on the rise, with 41% of teams planning to automate their processes in the next year​.

Additionally, any new discount types created will be accessible for future invoices, allowing businesses to streamline their billing process by preparing custom options that can be reused in subsequent invoices.

Embracing Automation with Automatic Payment Reminders

Businesses are increasingly recognizing the need for automation in invoicing. With advancements in AI and machine learning, automated invoice generation and smart reminders are becoming standard practices. For example, businesses utilizing AI-powered invoicing solutions can reduce processing times dramatically, achieving greater accuracy and efficiency​.

Should Merchants Use Square Invoicing?

For merchants evaluating their invoicing options, it’s essential to consider not only current costs but also future scalability and technological advancements. One option to explore is 'invoices square', which provides small businesses with an affordable invoicing solution through Square's platform. This service offers low fees for processing payments, options for using test accounts for development, and the benefits of upgrading to a Plus level account for additional invoicing features. Here are actionable steps to take:

1. Evaluate Your Needs: Determine the volume of invoices you process monthly and the associated costs with each option.
2. Consult a Payments Expert: Working with a consultant like Swipesum can help identify the best payment processing solution tailored to your business needs.
3. Consider Automation: Explore automated invoicing options to save time and reduce errors, ultimately improving cash flow.
4. Stay Informed: Keep up with industry trends and new technologies that can enhance your invoicing process.

It's crucial for businesses to evaluate their options carefully. While Square invoicing may seem like an easy choice, the potential for savings and efficiency lies with alternatives like Swipesum. By embracing automation and staying informed about industry trends, merchants can optimize their invoicing processes and enhance their overall financial health.

For more insights or to explore tailored invoicing solutions for your business, contact Swipesum today!