As a freelancer or small business owner, at some point you will need to invoice clients. However, it's possible that you'll run into slight difficulties creating an invoice or invoicing for the first time. If this is the case for you, there are plenty of resources out there to assist. This article provides an introduction to the invoicing process, giving you a good understanding of what invoicing should entail, and what invoicing tools you can use so that you can better inform your clients and help them set up a successful payment system for your own invoices.
What is an invoice?
An invoice is an itemised statement of the goods or services that you have provided to a customer, along with the corresponding charge. It is an important document for both you and your customers. Invoices can be created manually in a google doc, from a Microsoft word invoice template or from an online invoicing tool but an invoice at the minimum should provide:
- Details about your company name (or registered freelance details), tax information and contact information such as an email and phone number
- Details about your customer's name or business name and contact information
- The description and quantity of services and deliverables provided to the client as described in your original contract with the client
- The invoice date
- The total amount due and sales taxes owed by the client (if applicable)
- Your bank account details
- The payment terms including due date and accepted payment methods (e.g. bank transfer, credit card, paypal)
- Interest which can be charged to the client for late payment
- A unique invoice number for tax and bookkeeping purposes
If you are creating a recurring invoice then you can pre-generate the invoices with your invoicing system and share them with the client in advance.
Invoicing software can help you generate an invoice with these terms. To help you save time and avoid mistakes, it is important to choose an invoice generator which can easily connect to your contract and accounting system so that the data is consistent between systems and the data can be transferred between them seamlessly.
Do freelancers need a freelance invoice template?
Freelancers need invoices for their freelance work to be paid. Clients aren't always able to make a payment without an invoice and an invoice helps the client understand how much they owe the freelancer, for what and by when. Invoices exist to prove the fact that a particular person or company is entitled to certain amount of money from another party. An invoice serves many purposes:
- It acts as evidence that you have done the work and are therefore entitled to the money;
- It allows you to state how much is owed and when payment should be made;
- It provides information regarding whom to contact if there are any questions regarding payment;
- And last but not least, it helps you organise your finances properly by making sure that you receive all payments on time, as well as informing you about any outstanding invoices.
How do you create an invoice if you are self employed?
When you're self-employed, it's easy to lose sight of the details when it comes to invoicing clients. You know you have to invoice them and get paid, but getting the details right can be a chore. The key thing for self employed freelancers is to enter their self-employed tax information on the invoice where the service provider's business information is required.
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How do I invoice as a freelancer?
For freelancers and consultants, invoicing is an important part of the business. You need to do it right to keep your cash flow healthy. But creating a good invoice isn't always easy. Free invoice templates are fine as long as they include the information detailed earlier. However, it is also important to generate professional-looking invoices your clients will appreciate as the invoice is a representation of your business and work. The benefit of generating an invoice with an online system as opposed to using a free freelance invoice template is you can ensure the fonts and graphic design of the invoice are professional and you can make it easier for the client to pay you by automatically including payment links.
Which contracts do I need as a freelancer before creating an invoice?
Freelancers need to ensure they have contracts with their clients before delivering any services or work as this will protect them during the engagement. A freelancer or consultancy services agreement can ensure the client needs are satisfied whilst protecting the freelancer during the engagement. Robust contract terms help enforce the payment of invoices as they can define the condition of acceptance of work as well as the fees to be paid if ever the client terminate the engagement early even if the freelancer has already started work. Freelancers operating in a coworking space must also ensure that their confidential information and confidential information of their clients is properly protected. To create robust consultancy and non-disclosure agreements which are tailored to your requirements on no legal budget, sign up to Legislate today.
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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.