Top 5 Invoicing Softwares for Small SaaS Businesses
Small SaaS businesses don’t really need “invoicing software.” They need a billing engine that happens to produce invoices. The difference matters. A normal small business might send one-off invoices after a project. SaaS bills the same customer again and again, often with plan changes mid-cycle, add-ons, usage spikes, and the occasional “my card expired but I didn’t notice” moment. Tools built for simple PDF invoicing choke on that fast.
Here’s what breaks first when you use a generic invoicing tool for SaaS. A customer upgrades on day 17 of a monthly cycle. If your system can’t prorate, you either lose half a month of revenue or you send a manual top-up invoice that looks like you’re making it up as you go. Usage-based add-ons get worse. If someone goes over their limit and you can’t bill automatically, you’re stuck reconciling usage in a spreadsheet and hoping you didn’t miss anyone. Proration and recurring billing are not “nice to have” in SaaS. They are table stakes.
Then there’s failed payments. For subscription businesses, a non-trivial chunk of churn is not a customer choosing to leave. It’s a card failing and nobody fixing it in time. Benchmarks put involuntary churn at roughly 20 to 40 percent of total churn, and typical recovery rates sit under 50 percent without proper dunning. If your billing tool doesn’t automate retries, reminder emails, and payment updates, you’re leaking MRR in the most boring way possible.
Finally, SaaS is usually cross-border by default. The moment you sell to another country, VAT on digital services and MTD-style digital record rules start to matter. Even if you are tiny today, your invoicing setup needs to handle tax fields and clean records so you don’t rebuild your stack mid-growth.
So this list is not “top invoicing apps in general.” It’s five tools that small SaaS teams can implement without a finance department, and that actually support the realities of subscription billing: recurring charges, proration, dunning, and sane tax handling. If your product is subscription-first, your invoicing tool should be too.
What small SaaS teams actually need from invoicing software
For SaaS, the invoice is just the receipt. The real work happens earlier, in how the system handles subscriptions that change over time. If the tool can’t do that cleanly, you end up patching the gaps with manual credits, one-off invoices, and pm-me-later notes that never age well.
First, you need recurring subscriptions that run without babysitting. Monthly and annual plans should auto-send, auto-collect, and reflect plan changes immediately. This is the base layer for any subscription business.
Second, proration has to be native. In SaaS, customers upgrade, downgrade, pause, or add seats mid-cycle. Prorated billing charges only for the portion of service actually used, and it’s what keeps upgrades fair and low-friction instead of a support ticket waiting to happen. If your product has more than one plan, you will need this on day one.
Third, if you charge for usage or add-ons, metered billing should be either built in or easy to wire up. Usage pricing has become common in SaaS because it maps price to value. But it only works if usage flows into billing automatically, not via a spreadsheet export every month.
Fourth, dunning needs to be automated and decent. Failed cards drive a meaningful share of SaaS churn. Recent benchmarks put involuntary churn for SaaS at about 22 percent of total churn, and recovery rates without good retry and reminder flows are mediocre. A tool that retries payments intelligently, emails customers, and lets them update cards in a portal will save you MRR you didn’t even realize you were bleeding.
Finally, don’t ignore tax and VAT handling. SaaS goes cross-border early, and digital-services VAT rules are picky. Even if you’re small, your billing system needs correct tax fields, compliant invoices, and exports your accountant can trust. Otherwise you’ll rebuild your stack right when growth is already chaotic.
That’s the filter for the list ahead. The five tools below all cover these core realities. The question is which one matches your current billing complexity and the payment ecosystem you’re already using.
Quick comparison table. Pick your billing shape first
All five tools below can send invoices. The split is about how SaaS-native they are. Stripe Billing and Chargebee are billing engines first. Zoho Billing is a value play with strong SaaS features. Recurly leans hard into churn recovery and dunning. FreshBooks is here as the “simple recurring invoices” option for tiny SaaS teams that are basically retainers in SaaS clothing.
| Software | Starting price / free tier | Best for | Standout strength | Real drawback |
|---|---|---|---|---|
| Stripe Billing | Usage-based fees or new subscription pricing for Billing. No separate “free tier” beyond Stripe account. | SaaS already on Stripe payments | Clean proration, usage billing, and API control in the same stack you take payments with. | Costs scale with revenue and complexity. You live inside Stripe logic |
| Chargebee | Starter plan up to a revenue threshold, then paid tiers (Performance around $599/mo). | Growing SaaS with multiple plans, add-ons, or international pricing | Handles catalog complexity, proration, coupons, and dunning without custom code | More setup and “learn the system” tax than Stripe |
| Zoho Billing | Standard about $19/mo billed annually, Premium about $45/mo. 14-day trial. | Small SaaS that wants real subscription features on a sensible budget | Strong SaaS feature set (proration, metered billing, dunning) at low cost. | Best experience if you’re already in Zoho. API limits and ecosystem pull |
| Recurly | Trial, then typically from roughly $249/mo entry level, scales with volume. | SaaS with meaningful failed-payment churn or complex recovery needs | Best-in-class dunning and revenue recovery tooling | Gets expensive fast for early-stage teams |
| FreshBooks | From about $15/mo. | Tiny SaaS with simple recurring plans, no proration or usage | Easy recurring invoices and pay links with minimal setup | Not a true SaaS billing engine. Weak on proration, metered usage, and churn recovery |
If you are already on Stripe and your pricing is not wild, start with Stripe Billing. If your plans, add-ons, or geos are multiplying, Chargebee or Zoho Billing will save you future hacks. If card failures are a real churn driver, Recurly is worth the spend. If your “SaaS” is basically a simple monthly subscription with no mid-cycle changes, FreshBooks can carry you until reality catches up.
Stripe Billing
Best for
Small SaaS already taking payments through Stripe, with simple to moderately complex pricing.
What it does well
Stripe Billing is the straight-line option if your checkout is already Stripe. You get subscriptions, automatic recurring invoices, prorations for mid-cycle upgrades, coupons, trials, and metered or usage billing without stitching together extra tools. The API is strong, so if your product has custom billing logic, you won’t hit a wall quickly.
Where it falls short
Cost scales with volume. Stripe’s billing fees sit on top of payment processing, so as MRR grows, Billing becomes a real line item. Also, you’re committing to Stripe’s model. If you later want to run multiple gateways or have finance people who prefer a billing layer above payments, you may need to migrate.
Price snapshot
Stripe offers pay-as-you-go Billing fees or subscription pricing for Billing, depending on your plan and region. You choose based on predictability vs flexibility.
Real-world SaaS fit
You’re a 3–10 person SaaS with Stripe Checkout already live. Plans are seat-based or tiered. You want upgrades to charge fairly mid-month and need basic dunning without adding another platform. Stripe Billing handles this without extra architecture.
Verdict
Best default for Stripe-first SaaS. The moment your pricing or recovery needs get fancy, check the next two tools.
Chargebee
Best for
Growing SaaS with multiple plans, add-ons, regional pricing, or a messy catalog.
What it does well
Chargebee is built for subscription complexity. It handles plan catalogs, upgrade and downgrade proration, metered billing, bundles, coupons, lifecycle automation, and solid dunning. It also sits above gateways, so you can run Stripe plus others if needed. This is why many SaaS teams move to Chargebee right after “Stripe Billing hacks” start piling up.
Where it falls short
Setup takes more thinking than Stripe Billing. You are modeling your pricing inside Chargebee, not just toggling Stripe settings. There’s a “learn the system” tax, and the UI can feel enterprise-ish if you’re tiny.
Price snapshot
Starter is free up to around $250K lifetime billing, then Performance is about $599/month with overage fees beyond plan thresholds. Enterprise is custom.
Real-world SaaS fit
You launch with three plans. Six months later you’ve added annual discounts, usage add-ons, and EU vs US pricing. Stripe Billing works, but every change feels risky. Chargebee gives you a proper control panel for that complexity.
Verdict
Best “step up” billing platform once your pricing stops being cute.
Zoho Billing
Best for
Small SaaS that wants real subscription features on a sane budget.
What it does well
Zoho Billing covers the essentials SaaS cares about: recurring subscriptions, proration, metered pricing models, hosted payment pages, and dunning for failed payments. The Premium plan is explicitly designed for subscriptions and usage billing, not just one-off invoicing.
Where it falls short
Best experience is when you’re already using Zoho for CRM, support, or books. Outside that, it can feel like joining a new ecosystem, and API limits vary by plan.
Price snapshot (UK)
Standard is $29/month billed annually. Premium is $59/month billed annually and is the tier you want for subscriptions, proration, and usage billing.
Real-world SaaS fit
You are pre-Series A with $10K–$50K MRR, pricing has a couple tiers plus add-ons, and you need proration and retries without paying Chargebee money yet.
Verdict
Best value pick for small SaaS that has outgrown “basic subscriptions.”
Recurly
Best for
SaaS where failed payments are a meaningful churn driver, or where revenue recovery is worth paying for.
What it does well
Recurly is built around retention and recovery. It’s strong on dunning logic, smart retries, and tooling to reduce involuntary churn. If you’ve seen weeks where “card failed” is a top cancellation reason, Recurly usually improves recovery without engineering a custom system.
Where it falls short
Pricing is higher than Stripe Billing and Zoho Billing, and it scales quickly with volume. It’s a “revenue ops” tool more than a scrappy MVP billing layer.
Price snapshot
Public guides put entry tiers around $249/month after trial windows, then custom pricing as volume grows. You typically have to talk to sales once you’re past early scale.
Real-world SaaS fit
You’re at $100K+ MRR, churn is being pushed up by payment failures, and your support team is tired of “can you update your card?” tickets. The uplift in recovered MRR pays for the tool.
Verdict
Worth it when recovery matters more than tool cost.
FreshBooks (lightweight SaaS option)
Best for
Very small SaaS with simple recurring plans, no proration, no usage billing.
What it does well
FreshBooks does clean recurring invoices, payment links, reminders, and a surprisingly friendly UI. If your “subscription” is basically a steady monthly fee and customers don’t change plans mid-cycle, FreshBooks keeps billing painless.
Where it falls short
It is not a SaaS billing engine. Proration and metered usage are not its world. The moment you add seat-based upgrades or usage tiering, you will be back in manual-adjustment land. Client limits on lower plans can also nudge you upward sooner than expected.
Price snapshot (UK)
Lite is around $15/month but capped at 5 billable clients. Plus is around $25/month for more clients and recurring billing features.
Real-world SaaS fit
You’re a bootstrapped micro-SaaS charging one flat monthly price, mostly B2B, and you want to stop sending invoices manually without adopting a full billing stack yet.
Verdict
Fine for simple recurring billing. Not built for SaaS once pricing gets dynamic.
How to choose fast (by SaaS stage and billing model)
Start with two variables: billing complexity and how tied you are to Stripe.
If you are early stage and your pricing is simple, flat monthly or annual plans, maybe a seat count, and you already use Stripe for payments, Stripe Billing is the cleanest path. It handles subscriptions, proration, coupons, and usage billing in the same stack, so you are not adding another system before you have to. Billing can be pay as you go at 0.7 percent of billing volume, or on a subscription plan if you want predictable costs.
When your pricing stops being simple, more tiers, add-ons, regional pricing, reseller deals, mid-cycle amendments, Stripe Billing starts to feel like a growing pile of custom logic. That is the moment to look at Chargebee or Zoho Billing. Chargebee is the heavier-duty option for catalog sprawl and multi-gateway setups, with a Starter plan free up to about $250K lifetime billing and a Performance plan around $599 per month after that. Zoho Billing covers proration, subscription management, metered usage, and dunning at a much lower fixed cost $29 per month for Standard and $59 per month for Premium, billed annually.
If card failures are a visible churn driver, not an occasional edge case, you want a billing tool that treats recovery as the product. Recurly is built around dunning and involuntary churn recovery. Their own yearly research highlights how big failed payments are across SaaS and subscription categories, and Recurly’s positioning is explicitly about reducing that loss. Expect sales-led pricing once you are past a small starter setup.
FreshBooks only makes sense if your SaaS is basically a simple subscription with no real proration or usage logic. Think micro-SaaS charging a flat monthly fee, where upgrades are rare and support is tiny. It is a “good recurring invoicer,” not a SaaS billing engine.
A practical way to decide in a week: run one customer through the nasty path. Signup, upgrade mid-cycle, add a usage overage, fail a card once, recover it, then export the ledger for your accountant. The tool that handles that without manual patches is the one you keep.
Common mistakes small SaaS teams make
They pick a generic invoicing app because it is cheap and easy, then discover it cannot prorate upgrades or handle seat changes. The result is manual credits and one-off invoices that look inconsistent and cost support time. SaaS billing needs proration and subscription logic by default.
They postpone dunning setup. Failed cards quietly drive involuntary churn, and recovery is much worse without automated retries and customer notifications. If your tool supports dunning, turn it on early, even if the emails are plain.
They treat tax as a future problem. SaaS goes cross-border early, especially in the EU. When VAT fields or digital tax exports are missing, you end up rebuilding billing at the same time you are trying to scale. Zoho Billing and Stripe Billing both emphasize tax-ready invoicing and compliance support as core features, because this bites teams fast.
They overengineer billing before product-market fit. If you still change pricing every month, focus on something flexible and quick to edit. You can graduate to heavy catalog tooling later. Stripe Billing or Zoho Billing are usually enough until your pricing stabilizes.
Conclusion
For a small SaaS, billing is one of the highest leverage “boring systems” you will ever set up. Stripe Billing is the default if you are Stripe-first and your pricing is still simple. Chargebee is the step up when your catalog and deal structures get complicated. Zoho Billing is the value pick that still covers real SaaS needs like proration, usage billing, and dunning at a predictable price. Recurly earns its cost when failed payments are a meaningful chunk of churn. FreshBooks is fine only for the simplest recurring-fee micro-SaaS.
Pick two tools that fit your stage, then test them against a real customer flow that includes a mid-cycle change and a failed payment. Keep the one that gets you paid correctly without you thinking about it. That is the whole job.
FAQ
Do small SaaS businesses really need “subscription billing” tools, or is invoicing enough?
If your pricing never changes mid-month and you don’t do usage billing, invoicing can work early. The moment you add upgrades, downgrades, seats, or add-ons, invoicing-only tools turn into manual cleanup. You will either undercharge or annoy customers. Subscription billing tools exist because SaaS billing is a moving target.
When should I move beyond Stripe Billing?
Two clear triggers. First, your pricing catalog starts looking like a menu, tiered plans, add-ons, regional prices, annual discounts, reseller deals. Second, engineers start writing custom billing logic to patch Stripe gaps. When billing changes begin to require code reviews, it’s time to look at Chargebee or Zoho Billing.
Is Chargebee overkill for early-stage SaaS?
Often, yes. If you are pre-PMF and still changing pricing monthly, a heavy catalog tool slows you down. Chargebee shines when pricing stabilizes and complexity is real, not hypothetical. Until then, you’re paying for a future problem.
Why pick Zoho Billing over Stripe Billing?
Usually cost predictability and a clearer subscription UI. Zoho Billing gives you SaaS features for a fixed monthly price. Stripe Billing is elegant if you already live in Stripe, but costs scale with volume and you’re tied to Stripe’s model. If you want a separate billing layer without enterprise pricing, Zoho is a solid middle ground.
What is dunning, and why should I care?
Dunning is the failed-payment recovery flow: retries, reminder emails, and a way for customers to update cards. Involuntary churn is boring but expensive. If your tool doesn’t automate this, you leak MRR quietly. Even basic dunning beats “we’ll email them when we notice.”
Can I handle usage-based billing without a dedicated tool?
You can, but it usually goes like this: export usage, calculate overages in Sheets, send manual invoices, then fix mistakes later. If usage is more than a side note in your pricing, use a tool that supports metered billing natively.
How painful is switching billing platforms later?
Not fun, but survivable. You can migrate plans and customers, but expect edge cases around proration, grandfathered pricing, and invoice history. The bigger cost is mental: rechecking every billing path so you don’t break revenue. That’s why choosing based on your likely next 12 to 18 months matters.
Should I prioritize features or cost at this stage?
Prioritize correctness and low maintenance first. A cheap tool that can’t prorate or recover failed payments costs more in lost revenue and support time than a pricier tool that runs cleanly.
What’s the fastest way to validate a billing tool?
Run the “annoying path.” Create a test customer, subscribe them, upgrade mid-cycle, add a usage overage, force a card failure, recover it, then export reports for your accountant. If that flow works without manual patches, you’re good. If it doesn’t, you’ll feel the pain ten times harder in production.
