Being your own boss has its advantages. You get to decide on your schedule, workflow, and which projects to take. But it also means you are responsible for everything. That includes setting up your own invoice. Many freelancers are very skilled in their field but are less experienced when it comes to the bookkeeping side of things.
For some freelancers, money matters are downright daunting. It can be confusing knowing how to set up freelance invoices, as every business is different, with different billing methods and invoicing needs. But in order to properly run a business, no matter what you are selling, there’s no getting around the importance of proper invoicing for freelancers. Let’s take a look at the best practices for how to invoice as a freelancer, but first, let’s start with the basics.
The Basics – What Every Invoice MUST Include
There is a range of information that must be included on a freelance invoice to meet legal requirements. Make sure your freelance work invoice has the following:
Name and address of the freelance company
This should match the registered information of the company.
Business ID numbers
Include any relevant business identification numbers. These will vary depending upon which state or country you reside in.
The invoice must include the address where the project was undertaken, which may be different from the freelance company’s registered address.
Every invoice must display its unique number. When using automated invoicing software, it will be generated by the system.
This is the date that the invoice was issued.
Name and address of the customer
The customer name and address should feature as well. Make sure you use the correct details for the customer’s accounting needs. You can check with the customer to find out.
All items that are being billed for should be included as a list. Each item features a brief description of the product or service provided.
Cost per item/Quantity
The invoice should specify the cost per item (product or service), and the number of items purchased. This provides a breakdown of the invoice’s total amount for accounting purposes of both the freelancer and the customer.
Any applicable taxes are calculated and displayed here.
This is the calculation of all the item costs, taxes, and discounts, represented as the final amount owed by the customer.
Payment Due Date
The final due date of the invoice should be displayed clearly.
Terms & Conditions
Details such as payment terms, late payment penalties, and information about how to complete the payment are included here, usually at the bottom of the freelance invoice template.
What Makes Freelancing Invoices Different?
Freelance invoices are different than other types of invoices because the nature of freelance work is so varied. A graphic design freelance invoice will be very different from an auto repair shop invoice. Although invoices for freelance work all need to include the same elements, such as item descriptions, and payment terms and conditions, the actual content of the invoices will vary greatly. For some types of freelancing, the item description will be as simple as listing a product. For others, the item description will go into greater detail, describing all elements of a complex service provided by the freelancer.
A freelance invoice template, such as those provided by invoicing software or invoicing apps, is the simplest and most effective way to create freelance invoices, no matter what type of business you are operating.
Using a Freelance Invoice Template
The freelance invoice template is a pre-formatted invoice that can be used to create professional-looking invoices, fast. More and more freelancers are using invoicing software and apps for easy, effective invoicing. The question is whether to stick to the default template provided by these systems or to create and customize your own freelance invoice template.
The default invoice template of invoicing software complies with all the legal requirements and lets you produce valid invoices with no extra effort whatsoever. The only thing you need to do is enter the specific details of the transaction. This is a great option for freelancers who are looking for a fast, no-frills invoice.
For freelancers who would like to use invoices that reflect their business identity, then it is preferable to customize the invoice template with the colors, styles, and layout of your freelance business. This will require more work to set up than a default invoice template, but for many freelancers, the benefits of a more unique and customized invoice template outweigh the investment of time and energy.
Freelance Invoice Example
A good freelance invoice not only provides the details of the transaction for the customer, but also reflects the freelance business in design, style, and layout. Here are the different elements that make up a freelance invoice example:
These fields display the name, address, email, and phone number of your freelance company. This information is fixed and does not change for each invoice.
The customer information includes their name, address, city, state, and ZIP code.
The freelancer logo is a really important element of any freelance invoice template. It is the ‘signature’ of your business, and enables the customer to instantly identify your company and strengthen your brand. It should be displayed in a position that is prominent and clear, yet doesn’t distract from the overall design balance of the invoice.
This is a really important element in the invoice example design. It should be clear and bold, and positioned somewhere central. The invoice number is generated automatically by the invoicing software or app, so the invoice numbering system remains intact and consistent, with no numbering errors.
The date of issue of the invoice must also be displayed clearly. This will affect the due date and late fees.
This is the heart of the freelance invoice, as it outlines exactly what the invoice is for. The invoice items are displayed as a list, with corresponding columns for the cost per unit, quantity, and calculated amount for each item. The items section can be designed in various ways, with background colors, specific spacing, and fonts.
The amounts featured are the sub-total, specified taxes, and total amount due. The total amount due is often bolder and larger than the other figures, as it is the key figure for the customer to pay attention to.
This section will usually appear at the footer of the invoice. Here, you include your terms and conditions, payment information, and you can also choose to feature a special message or note to personalize the invoice for the customer.
Hot Tips for Your Freelance Work Invoice
With the right invoicing software for freelancers, it’s easy to create a freelancer invoice format that works for you. Here are the top tips for great-looking freelance invoices:
Make it reflect your brand identity
Invoicing software allows you to easily include your logo, brand colors, and style with a selection of invoice templates to choose from. Choose a look that matches your brand identity, to help strengthen the visual impression of the invoice for your customers.
Include a personal note
Freelance invoice templates include a section where you can add terms and conditions. This is a great opportunity to include a personalized message or special note for specific customers, so you can build better customer relationships. All you need to do is enter the message in the field when creating a specific invoice.
Create an attractive look but keep it simple
It’s important that your invoice reflects your brand identity and the style of your business. But don’t go overboard and clutter it with elements and information that are superfluous. Keep it simple and easy to read. This will encourage your customers to deal with the invoice and pay promptly.
What Not to Do!
While we are on the topic of how to invoice as a freelancer to get paid as quickly as possible, here are a few things you shouldn’t do:
Don’t overcomplicate the item descriptions
While you need to be descriptive about the items you are charging for, don’t make the description too long. This will only complicate the invoice for the customer, and it will also disrupt the design of the line items. Rather, just include enough necessary information so the customer can easily identify the charge, but not more.
Don’t forget to complete the fields
When using invoicing software, don’t forget to fill in all the fields so the invoice is complete with all the required information. It only takes a few minutes to include everything you need to, so take care and make sure not to miss anything. Otherwise, the fields will be left blank and the layout won’t look as professional or attractive as it should.
Don’t send invoices haphazardly
As a freelancer, you are managing everything about your business, which means it’s wise to keep things as organized as possible. Stick to a set schedule for your invoicing. Devote a specific day or week of every month to send invoices to clients, depending on your company’s needs. Many freelancers send out invoices on the 1st of the month. That way, it is easier to track your incoming payments and your customers get to know when to expect to see their bill.
Freelance Invoicing the Simpler Way
Invoicing for freelance work may seem complicated, but with the help of invoicing software, many of the rote tasks become easy and quick. The trick is to use the best freelance invoice template for your business. Once that is done, and your brand identity elements are set up in the freelance invoice template, all you need to do is enter your customers’ details, hit “Send”, and wait for the freelance invoice payments to roll in.