From the day we started our company, AJ and I wanted to be able to run our company from the road. We wanted to be able to to work from the United Kingdom, Kenya, Germany, France, Tanzania, Miami, New York, Montreal and wherever else our little adventurous hearts wanted to go. So we intenionally setup our comapny to run from the cloud.
One of the services we use for invoicing is Freshbooks. Freshbooks allows you to create custom invoices and that you can email or mail to clients. There are a ton of features that make Freshbooks one of my personal my favorites app (since I am the one who gets to deal with invoicing, yay). The paypal and google checkout integreation allows your clients to pay directly from the invoice to your paypal or google checkout. The other really neat feature is the invoice autobiography, on the bottom of every invoice in your dashboard you can see when the invoice was created, edited, sent viewed and eventually paid.
Full Disclosure - Freshbooks is one of the awesome sponsors of our Rise of the Cubicle Farmer tour, and we have been using them since the day we opened our company. If you run a small business, you should really consider using them.