Word should be able to do the letterhead no problem. Saved as a template it should be fine.
Excel for printing on invoices. It will take a lot of work I think. Aligning everything perfect and getting font size/font clarity right would be a difficult task.
I study BA (Hons) Accounting at University and I received tutoring in Sage Line 50, an Accounting package. This program allowed client information to be added and stored, also allowing invoices to be printed out with the clients name and important information. I understand that this may be way more than your dad needs and possibly even outside the budget but its a pretty solid program.
Id listen to some more suggestions before jumping on my advice and ideas.