The best model I've seen for online invoicing is FreshBooks and I'm already using it.
FreshBooks is so much more than an invoicing tool. It's an accounting system with simple services that help you manage your business. You can:
* Use a secure web address to access your account, branded with your business name.
* You can track time of your staff or a contractor with time sheets by projects or tasks. They will login using your branded FreshBooks web address.
* Share documents with your staff and clients, set access levels to restrict who can see what.
* Create support tickets to help manage additional time spent with customers.
* Send snail mail invoices by the US Postal Service prepared by the FreshBooks team, just purchase stamp credits. Invoices are sent via first class business mail within one business day.
FreshBooks has 5 different paid plan options and 1 free plan. The free plan is robust with only two restrictions; you are limited to 3 clients but you can invoice them as much as you need. Your emails will have an added signature at the very bottom that reads: "Save time invoicing with FreshBooks (www.freshbooks.com)". It's so small you or your customers will hardly notice it. In my opinion that's a small price to pay to create a free small business invoice.
For online invoicing and so much more Rising Star Ideas, LLC recommends FreshBooks.