Invoice tracking answers the question the owner asks on the way to the bank: how much is out there, how much of it is late, and how long is the money taking to come in. For a business selling on account the tracking is not a list of invoices, it is the list joined to the payments applied against each one, because an invoice is open only until the payment named it. This page is about what an invoice tracking system has to hold, what managing invoices and payments looks like when it is done properly, where the invoice management process usually goes wrong, and what invoice management systems add beyond a spreadsheet.
Tracking invoices and payments together
An invoice is issued with a date, a due date and an amount. A payment arrives with a date and an amount and, if the process is right, the invoice it settles. The tracker joins the two: open amount per invoice after part payments, days past due, and per customer the total open and the oldest item. Track invoices without the payments and the list is a history; track them together and it is a balance. The free invoice tracker on this site reads outstanding, overdue and days sales outstanding from exactly that join.
The invoice management process: manage invoices in five columns
Issued, sent, due, paid in part, paid in full. Every invoice is in one state and moves forward only. Manage invoices in those five columns and the month-end statement is a filter, not a document; let them sit in a folder and the statement is an afternoon of reconstruction. The invoicing workflow that keeps the columns true is the one where a payment is applied on the day it arrives, against the invoice the remittance names.
Where a spreadsheet stops and invoice management systems start
A sheet with one row per invoice works for one person and a few dozen invoices, until a payment covers three invoices, a credit note has to be applied, or two people need the same balance in the same hour. Invoice management solutions add three things a sheet cannot: the payment split across named invoices, the customer's own view of their statement, and the history of who did what. Buy for those three and ignore the rest.
Choosing invoice management solutions for a small seller
Ask to see one customer's account after a part payment against one of three open invoices: the open amounts, the aging and the statement should all agree. Invoicing management tools that show a right balance and a wrong aging fail that test. Then ask the price for the account rather than per user; the paid record on this site is priced that way, and the tracker itself stays free.
Questions people ask about invoice tracking
What is invoice tracking?
Keeping every issued invoice with the payments applied against it, so the open amount, the days past due and the customer's total are read from the record rather than reconstructed.
What does managing invoices and payments look like in a small business?
Issue from the sale with a due date, apply each payment against the invoice it names on the day it arrives, send the statement at the period end and the reminder from the due date. The free tracker reads the figures from that record.
When does a spreadsheet stop being enough for the invoicing workflow?
When a payment covers several invoices, when credits have to be applied, or when more than one person needs the same balance at once.
What figures should an invoice tracking system show?
Outstanding, the overdue share by age band, the average invoice and days sales outstanding, per customer and in total.