Zoho Invoice Software: How to Set Up and Send Your First Invoice

Zoho Invoice is free invoicing software for small businesses. The free plan allows two users, three projects, and up to 500 invoices a year, according to Zoho's pricing page, and free accounts carry a "Powered by Zoho Invoice" line. To send your first invoice, select or add a customer, confirm the invoice number, set the date and payment terms, add your line items, and click Save and Send. The steps below follow Zoho's own help documentation.

The setup takes longer than the first invoice does. Set up your customers and items once, and each invoice after that takes a few minutes. This guide covers the free plan limits, the setup, every field on the invoice, and how sending and payment tracking work.

What does the free Zoho Invoice plan include?

Zoho says the invoicing product is free for small businesses, with no credit card and no ads. The limits are the part to plan around. Two users, three projects, and 500 invoices a year are the caps on the free plan as listed on Zoho's pricing page. Divided across twelve months, 500 invoices a year is about 42 a month. A business billing a few clients a week will fit under that. A business invoicing dozens of jobs a day will not.

Zoho's own pricing page says that businesses that outgrow the free plan should contact its product experts about other options, including Zoho Billing. The difference between those two products is covered in our post on Zoho Billing vs. Zoho Invoice.

For comparison, WaffleInvoice's free plan has no invoice cap. It allows unlimited invoices, estimates, and clients, with 25 invoice emails per rolling 30 days. Those two limits count different things, so they aren't directly comparable. Zoho caps how many invoices you create. WaffleInvoice caps how many emails you send. Both matter if you're deciding what to run your billing on.

What should you set up before your first invoice?

Three things save you time on every invoice after the first: a customer record, your items, and your invoice number format. Create these before you open the invoice screen.

1. Customers. Add each client with a name, billing email, and address. The Customer Name field on an invoice pulls from this list, so a misspelled name here becomes a misspelled name on every bill.
2. Items. Add each service you bill for, with a name, a description, and a rate. A plumbing business might have one item for "Drain clearing, per visit" and another for "Labor, per hour." Once an item exists, you pick it from a dropdown instead of retyping it.
3. Invoice number prefix. Zoho auto-generates an invoice number. If you want a prefix such as INV- or your initials, open the Gear icon on the invoice to change it. Settle on the format now, so your numbers stay in one sequence.

How do you create an invoice in Zoho Invoice, step by step?

Zoho's help documentation lists the steps in order. Here's the core path, with the fields you'll fill in on each one.

Set the payment terms before you add items. Zoho calculates the due date from the invoice date and the terms, and it's easier to check the due date when the terms are already on the screen.

How do you send the invoice and track payment?

Click Save and Send to email the invoice immediately. The dropdown next to it lets you schedule the send for a later date or save the invoice as a draft. Zoho also lets you send an invoice by SMS, by mail, as a PDF, or as a link to the customer portal, and you can use the Zoho Invoice mobile apps on iOS and Android to send from your phone.

After the invoice goes out, mark a payment as received when it comes in. The invoice has an option for online payment and for partial payments, so a client who pays half now can be tracked against the balance. Set payment reminders in the same area if you want Zoho to nudge clients whose invoices are late.

Worked example: a $2,400 invoice on Net 30

Say you run a small web maintenance business and bill a dental office for October. The invoice has two line items. Website maintenance for October is $1,800. A hosting handoff for the month is $600. Here's how the invoice comes together:

With the invoice date set to October 1 and Net 30 selected, the due date is October 31. If the client pays on October 20, you mark the payment as received against the $2,400 total, and the invoice closes. If they pay $1,000 on October 20, you record a partial payment, and the remaining $1,400 stays open with the same due date.

What should you check before you send it?

A few checks catch most of the mistakes that come back to you. Confirm the customer is the right legal entity, since the name on the invoice is what their accounts team searches for. Check the invoice number against the last one you issued so the sequence doesn't skip or repeat. Look at the tax line if you charge sales tax. Then read the due date out loud. It's the field that drives late payment, and it's easy to misread when it's computed.

When does Zoho Invoice stop being the right fit?

Zoho Invoice fits if you bill a small number of clients, two or fewer people touch invoices, and you stay under 500 invoices a year. If you grow past those limits, plan the move before you hit the cap, not after. Changing invoicing tools in the middle of a billing cycle means exporting customers and reconciling open invoices by hand.

If you're comparing options, our pricing page lays out what WaffleInvoice's paid plan costs. Pro is $19 a month, or $190 a year, which works out to $38 less than paying monthly for twelve months. For the full list of what the free plan includes, our features page covers invoicing, estimates, and client records. Questions about limits and billing are answered in the invoice software FAQs.

Frequently asked questions

Is Zoho Invoice really free?

Zoho describes its invoicing product as free for small businesses, with no credit card and no ads. The free plan has limits: two users, three projects, and 500 invoices a year, as listed on Zoho's pricing page. Check the current limits on Zoho's site before you commit, since plan details can change.

How do I change the invoice number on Zoho Invoice?

Open the invoice and click the Gear icon next to the Invoice# field. From there you can change the prefix on the auto-generated number. Set the format before you send your first invoice so the sequence stays consistent.

Can I schedule an invoice to send later?

Yes. Use the dropdown next to Save and Send to schedule the invoice for a later date. This is useful for recurring clients who expect bills on the first of the month.

Does Zoho Invoice accept partial payments?

Yes. You can enable partial payments on an invoice and record a payment against the balance. The invoice stays open until the full amount is received.