Invoicing software for businesses: What should you pay attention to when choosing?

The market for invoicing software is large. Dozens of providers promise that invoices can be created in seconds and that accounting practically runs by itself. But after a few months at the latest, it becomes clear whether a tool really suits your company, or whether you are still copying back and forth between systems, reconciling payments manually and sending every payment reminder individually.

It is therefore worth taking a thorough approach to the selection right from the start. In this article, we show you which requirements modern invoicing software should meet and what this can look like in practice.

Why choosing invoicing software is so important

Invoicing software is far more than a tool for writing invoices. It is the basis for almost all payment flows in your company. This is where your receivables arise, this is where you can see which customers have paid, and from here payment reminders and the bookkeeping are initiated.

At the latest with the obligation to use e-invoices in the B2Bsector, it is clear: simple Word or Excel templates are no longer sufficient. All companies have had to be able to receive e-invoices since 2025. For sending, paper and, with the recipient’s consent, PDF invoices are still permitted until the end of 2026. From 2027, companies with more than 800,000 euros in turnover in the previous year must issue e-invoices; from 2028, this will generally apply to all domestic B2B invoices. Anyone choosing new software now should therefore think not only about current needs, but also about how your company and the legal framework will develop over the next few years.

The 7 most important requirements for modern invoicing software

1. 1

   Invoice creation: fast, flexible and error-free

   The basic function has to work flawlessly. Good invoicing software automatically adds all mandatory information, assigns consecutive invoice numbers, and accesses stored customer and product data. This helps you avoid typos and queries that unnecessarily delay payment.

   The better the software reflects your typical processes, the less post-processing you will have to do.

2. 2

   E-invoices: obligation rather than optional extra 

   An e-invoice is not a PDF sent by email, but a structured data set that can be read by machines. In Germany, the formats XRechnung and ZUGFeRD are particularly widespread. Your invoicing software should be able to create both formats and ideally also receive and display incoming e-invoices, because your company is already obliged to do so today.

   With some providers, e-invoicing is not automatically included in the plan and is sometimes offered as a paid add-on module.

3. 3

   Payment tracking: outstanding items always in view 

   Sending an invoice is one thing; knowing whether it has been paid is another. Modern invoicing software connects directly to your business account, imports incoming payments, and automatically matches them to the corresponding invoices. Outstanding and overdue invoices are clearly displayed, without you having to manually go through bank statements. The easier the payment, the faster your money comes in.

4. 4

   Dunning process: automated and individually customizable 

   In everyday business, the dunning process in particular is often neglected because it is unpleasant and time-consuming. Good invoicing software takes this work off your hands: payment reminders and dunning notices are created and sent automatically according to rules you define yourself.

   Ideally, the dunning process can be adapted to your own workflows, for example with regard to deadlines and wording. After all, a regular customer who has overlooked an invoice needs different communication than a customer who has not responded to several reminders.

5. 5

   Interfaces: your invoicing software is not a lone fighter 

   No invoicing software works in isolation. It must communicate with other systems in your company, for example with:

   • Your accounting and tax consultancy, so that invoice data can be passed on without detours

   • Your sales channels, such as online shops, so that invoices are created automatically

   • Other systems in your company, so that customer data does not have to be maintained twice

   • Banks and payment service providers, so that incoming payments are assigned automatically

   The more ready-made interfaces a provider offers, the fewer custom solutions you will need.

6. 6

   Transfer of outstanding receivables: what happens after the last reminder? 

   This requirement is most often overlooked when making a selection. Many invoicing tools stop at the internal dunning process. If your customer still does not pay after the final reminder, the manual work begins: looking up invoices, compiling the dunning history, exporting customer data and sending everything to a collection agency.

   Modern invoicing software instead offers a direct connection to digital debt collection service providers. You specify once after how many days an overdue invoice should be transferred, and the rest runs automatically. The receivable is transmitted with all relevant data, and you can check the current status at any time. This creates an end-to-end process from invoicing to payment receipt without media disruption.

7. 7

   Data protection, GoBD and scalability 

   Invoices contain sensitive customer and financial data. Therefore, make sure that the provider is GDPR-compliant and ideally stores the data on servers in Germany or the EU. Equally important is GoBD-compliant archiving.

   So think about tomorrow: as your company grows, you may need multiple user accounts with different permissions, a higher invoice volume or additional interfaces. A pricing model that grows with you will save you from having to switch systems later.

Practical example: how invoicing software and debt collection interact

How the requirements mentioned work together in everyday life can be well illustrated with a typical process. A company sends regular monthly invoices to its customers. For a long time, invoicing, payment reconciliation and dunning were handled via different tools and a lot of manual work, so a large part of the time was spent following up on outstanding items. With the e-invoicing obligation in mind, the company opts for central invoicing software and switches to easybill .

The same monthly services are now automatically created as recurring invoices and sent as e-invoices. Incoming payments are reconciled with outstanding invoices via the bank connection, and anyone who does not pay on time automatically receives a payment reminder and, if necessary, a dunning notice. Existing systems are also connected via interfaces so that data no longer has to be maintained twice.

If an invoice remains unpaid despite a reminder, easybill automatically transfers it to a debt collection service provider such as Debtist after a defined period. The result: The time spent on invoices and reminders drops significantly, and the company only has to take care of the cases that really need attention.

Checklist: The right questions for every provider

Before you decide on an invoicing program, you should answer the following questions for yourself:

1. 1

   Does the software cover my typical types of invoices (one‑off, recurring, instalments)?

2. 2

   Are XRechnungen and ZUGFeRD included in the plan, both for sending and receiving?

3. 3

   Is there an automatic payment reconciliation with my bank account?

4. 4

   Can I customize dunning levels, deadlines, and texts individually?

5. 5

   Can the software be connected to my existing systems via interfaces?

6. 6

   Can overdue invoices be transferred automatically to a debt collection service provider?

7. 7

   Where is my data stored, and is the archiving GoBD-compliant?

8. 8

   Does the plan grow with my company?

Conclusion: The best invoicing program thinks beyond the invoice itself

When choosing an invoicing program, you should not only look at invoice creation. What matters is how well the software maps the entire path through to payment receipt: from the e-invoice, through payment monitoring and dunning, to the transfer of outstanding receivables. The fewer media disruptions there are, the more time you save and the more stable your cash flow.