As a freelancer, you are living the dream.
You get to call all the shots — like when to work, where to work, and even how much you get paid.
But with that freedom comes a lot more responsibility — it's not all working from the beach or on the couch in sweatpants.
You are also in charge of all the less-fun business processes, like creating and sending invoices.
Your time is money — you don't have time to waste chasing payments or dealing with complicated invoicing systems.
The good news? You don't have to.
This guide will walk you through absolutely everything you need to know about invoicing as a freelancer — including what information your freelancer invoices should include and how to get paid faster.
What is a Freelancer Invoice?
An invoice is a document created by a freelancer, service provider, or vendor that serves as a payment request. It may include a variety of information including the number of hours worked, invoice number, business address, and information on late fees.
Unlike a bill, an invoice is more detailed and includes information about when and how to submit payment.
As a freelancer, your invoice might look something like this:
While most freelancer invoices are sent once work is complete, there are several other types of invoices, including:
- Recurring Invoices: If you have a retainer client, you would send an invoice for the same amount every month.
- Deposit Invoices: An invoice sent out before a project begins for, in many cases, around half of the final invoice amount.
- Interim Invoices: An invoice sent when specific (pre-agreed upon) milestones are met for a project. For example, a graphic design freelancer might charge a portion of their final fee when the first draft is turned in.
What is a retainer client? A client who pays in advance to ensure you are available when they need you. For example, they may pay for 10 hours per week of your time — and you get paid whether or not they have work for you.
What Should I Include in My Freelancer Invoice?
Freelancer invoices include all the information clients need to make a payment. The invoice format you use might depend on the client, the invoicing software you use, and the type of invoice you are sending.
However, all invoices should include the following information, as applicable to your situation:
- Name and Business Information: Your DBA (doing business as) name, logo, and other identifying information.
- Unique Invoice Number: This helps you and your client avoid missed or double payments by giving each invoice a unique number.
- Invoice Sent Date: Pretty self-explanatory — all invoices should include the date the invoice is sent.
- Payment Due Date: The date payment is due and when the date when the payment would be considered late.
- Late Payment Charge: When the late fee goes into effect, how much it is, and whether it grows over time. For example, 1% for the first week late, 5% for the second, and so forth.
- Payment Information: How can your client submit payment? For example — credit card, check, ACH deposit, or an electronic payment system.
- Service/Product Details: What work was completed, how many hours it took, etc.
Depending on the type of invoice you send, you might also include information about discounts provided, whether it is a retainer invoice, and previous payments (for example, if you are sending an interim invoice.)
What if my freelance client wants me to use their internal invoicing system or template?
Some clients may require freelancers to use their company invoicing system or template. If you use invoicing software, we suggest creating your own invoice in your system to track payments, then send their invoice manually. Keeping your own system updated will ensure you stay organized for taxes and other financial reports.
How to Send a Freelance Invoice
Once you have added all the required information to your invoice, send it via email or, if required, by regular mail to the appropriate party. Keep in mind; you may need to send it to the accounting department rather than your point of contact.
Pay attention to invoice format requirements — some clients may require the invoice to be sent as a PDF or in another format.
How often should I invoice my freelance clients?
It depends on the type of work and the clients themselves. Many freelancers bill either monthly or weekly, but only after establishing a relationship with a client. In addition, large projects may be billed as specific milestones are met, rather than weekly or monthly.
Be sure to discuss the length of billing cycles with your client before signing a contract or starting work. For new clients, complete a small project and require payment before moving to long-term billing cycles, such as monthly.
5 Invoicing Tips for Getting Paid Faster
One of the least exciting parts about being a freelancer is waiting to get paid. Unlike a regular job, you won't have a set payday. Instead, it is up to you to ensure your invoicing process is easy to navigate and take steps to make sure you get paid faster.
The following tips will help you do just that.
Use an Easy-to-Follow Invoicing System
When it comes to invoicing as a freelancer, go for simple and easy to use. Back and forth emails asking for clarification slow down payments and create a headache for everyone involved.
Creating an easy-to-edit invoice template is a good first step. Also make sure to use an easy to understand email subject line like "John Smith — May 2020 Invoice" so your emails don't get lost in overfilled inboxes.
Set Clear Payment Terms
Payment terms cover what must occur before payment is rendered. For example, does the client need to sign off on the work before payment is sent? Are you working on a net-30, net-60, or even net-90 (😱)? What happens if the payment is late? Does work stop, or is there a late fee?
All this information should be outlined in your contract, but make notes in your invoice as well to make sure everyone is on the same page.
What is a net-30 payment?
Net-30 means the invoice is due 30 days (or 60 or 90, respectively) after the client receives the invoices.
For large companies, this functions as a business line of credit — for example, if you buy 9,000 rolls of plastic to make shower curtains to sell, net-90 means you can make the curtains and likely sell them before making a payment.
Most freelancers try to avoid net payment terms, but many will accept 30 days. More than net-30 is uncommon in the freelancing world and should be avoided if possible.
Accept a Range of Payment Types
It sounds simple, and it is; if you want to get paid faster, make it easy to get paid. Offering a wide range of payment types, including credit card, ACH, and online portals like PayPal make it easy for clients to pay you faster.
Word to the wise — pay attention to transaction fees. Most payment types will charge a transaction fee, which is often a flat fee or a percentage of the payment amount. Those fees CANNOT be passed on directly to the client in many cases. (For example, it is against PayPal's user agreement to charge a client for the PayPal fee.)
Instead, you'll need to bake these costs into your rates — and make sure to ask your accountant if you can write those fees off on your taxes.
Set Automatic Payment Reminders
It's an uncomfortable situation — you sent an invoice last week but haven't received payment yet. Did they receive your invoice? Was your invoice lost in the ether?
Automatic payment reminders save you time by automatically sending payment reminders to your clients — it is like having a digital assistant dedicated to making sure you get paid on time.
But, to use this handy feature, you'll need invoicing software — which is our next tip!
Consider Using Invoicing Software
Billing and invoicing software functions a bit like your very own digital assistant. Depending on the software system you choose, your software might help you track your time, send invoices, and keep track of expenses.
Clarrow, for example, is an all-in-one freelancer platform that helps you create and send contracts, invoices, and proposals, log expenses and even track time. You can set up automatic payment reminders, get notified by email when payments post, and even automate expense reports.
As a freelancer, your time is valuable. Invoicing software can help streamline your back-office process so you can focus on what you do best — whether that is creative work, analyzing data, or herding cats from your keyboard.
Most freelancers don't decide to ditch the 9-5 world thinking, "Wow, it sure would be a lot of fun to do boring business stuff like keep track of payments and record expenses."
You did it because you love the work, or wanted more freedom, or wanted to provide better quality service. Luckily, there is a simple way to stay organized and streamline invoicing, expenses, and contract creation. We can help — sign up for a free Clarrow trial and start sending stress-free invoices today.