Freelancer’s guide to invoicing: Everything you need to get paid
Inna Kaushan, co-founder of Solna, provides freelancers and micro business owners with a full guide to invoicing clients, from payment terms to document formatting.
Money really isnt funny in a freelancer’s world. it’s literally the lifeblood of one’s career and as necessary to your survival as milk is to a baby.
Good invoicing forms part of this. Sending out clear, concise, well-designed invoices is important to get you paid and making it easy for your clients to pay you is necessary to get you paid on time. After all, the last thing you want is a chase.
New to it all? Not to worry, it isnt rocket science and good invoicing is achievable overnight. To help you get started, here’s a handy crib sheet:
What is an invoice?
An invoice is an important accounting document that requests payment in return for goods or services. It indicates what must be paid for, when it must be paid for, and how the recipient can pay for it. That’s the concept in a nutshell.
What should an invoice include?
An invoice should always include:
The word invoice?
The date of issue
Your name or your business name
The client’s name or their business name
Yours and your client’s contact information
A unique invoice number (for good bookkeeping)
The amount your client owes you
Your payment details
Your payment terms and conditions
If you want to get paid on time, make sure you use a clear and concise design so that your client can identify important information quickly.
What format should an invoice be in?
You can design invoices using any tool and in any format you like. Many freelancers send their invoices out as a Word document, PDF or even Excel? (we wouldnt recommend this as it’s harder to brand and a little accountancy-like) and others make use of available invoice templates more on that below.
If you do decide to use an Office application for your invoices, make sure they are saved in the Open Document Format, so your customers can actually open them. We can’t tell you how many times weve seen late payments occur because invoices can’t be opened by the client. We also recommend making your invoices read-only to avoid invoice fraud (this is where your customer edits the invoice to a lower amount).
Design matters too. Just like the wonderful product and service you provide, it’s also important to make a professional impression with your invoices.
A beautifully designed invoice adds a finishing touch to your service. We recommend you go down the customised route, and invoicing software is a great place to start. Services like Solna have templates ready and waiting for you to use which you can customise and brand to your heart’s content, and download as PDF or send through the platform. It beats slogging it out on Word.
Invoice payment terms
As a freelancer, you make your own hours and set your own payment terms. While some projects will call for you to bow to the payment run of the client, most of the time youll be able to dictate when you get paid from within your invoice.
Net payment terms are the most common with freelancers. Net 30 means you request payment within 30 days of invoice receipt. Net 7 is 7 days, net 10 is 10 days. You get the idea. The issue with these terms is there’s no guarantee the customer will pay. If you take on one-off clients you might want to skip to the next option – upfront payment.
Upfront payment, or payment in advance, safeguards your time and cash flow. Some businesses arent comfortable with it, so itll be up to you to forge trust in the relationship and win them over. If they won’t pay you upfront, then, to be honest, you should question if they would have paid you at all. You might have dodged a bullet.
If you have recurring customers, you have two choices: raise invoices manually or invest in software thatll automate the process for you. Automating the sending of invoices will free up your time and give your customer continuity.
Whatever terms you choose, make sure you keep on top of who’s paid and who hasn’t or else youll find yourself with cash flow issues pretty quickly. You might need to do this manually depending on the system you use. If you’re using invoicing software, you should get alerted when you receive payment or if payment is overdue.
How to send your invoice
It is standard practice to send invoices via email with a High Importance tag. In Outlook, you can request a read receipt which is a type of delivery notification – but it should be said this is self-enrolling, so the receiver can just say no to it. If you do send your invoices by email, then ask your client to confirm receipt.
Your email should have a subject header with the word invoice? in it, your company name and the month/ year. Here’s a good example:
Solna.io, Invoice, December 2018
Inna Kaushan is the co-founder of Solna, a smart invoicing platform powered by credit score data. Solna speeds up the invoicing and payment process for freelancers and small businesses. Through leveraged credit data that is overlaid on the platform's invoicing and reporting functionality, users get a clear picture of their customer's financial health and their overall exposure to risk. The system's automated credit control functionality automatically chases overdue invoices freeing up time and ensuring faster payment.
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