Invoicing is an Essential Part of Freelancer Life

Invoicing is an essential part of freelancer life. Because without an invoice, you won’t get paid. Creating and sending invoices is essential for maintaining a professional relationship with your clients. Not only this, but maintaining an organised invoicing system helps you keep on top of your finances, track your earnings, project costs and keep tabs on outstanding payments. As well as this, correct invoicing makes it easier to manage your taxes and generate financial reports. That’s why we’ve put together a comprehensive guide on how to write an invoice for the self-employed.

What makes a good Invoice?

An acceptable invoice should provide all the information needed to ensure timely payment. Here’s everything that must be included in an invoice:

1. Starting From the Header

Here, you want all the information about you, your client and the invoice itself. If you have a business name, include that at the top left along with a logo you might have. This adds personal branding and professionalism.

This invoice is of a freelance copywriter, Jane. She’s a sole trader and has decided not to register as an LTD. So, her e-invoices include her contact information, address, phone number and email (the title of the invoice title and customer ID is for your own reference).

Under the freelance copywriter’s information is the client’s information. That means that both parties have full information if ever they need to contact them in the future, or during the invoicing process.

2. Payment Details

Don’t forget the invoice number, the unique identifier for each invoice. Usually it is in numerical order. The invoice date is the date that the invoice is sent out to the client.

It’s important to include the payment terms. Here, it’s 40 days from the invoice date. This is very important for freelancers if they want to get paid. Some freelancers include a clause about penalties for late payments in their invoices, such as charging an additional €1 per day for each day the payment is overdue. Or 5% late fee for payments overdue by 30 days. This creates an incentive for clients to pay on time.

At the very bottom of the e-invoice, there is a list of accepted payment methods. It’s best to include as many payment options as possible (such as PayPal, bank transfer, credit card options etc.) to make it easier for the client to pay you. You’ll find that you’ll get paid faster.

3. Itemised List of Services

This is where all the work you did for the client is broken down. Starting with the breakdown of the products or services you have provided. Here, we have website copy, the hourly rate and what the copywriter charges per hour for that service. Make it as easy to understand to avoid any confusion.

The second line is the blog articles. The freelance copywriter delivered 50 articles and charged €40 per article. The rate of is your rate for that particular service.

4. Subtotal, Taxes, Discounts and the Amount Due

The subtotal is the amount for each line item before any taxes are added. Followed by the sales tax, VAT etc. This may vary depending on the country you reside in (you can add a section for discounts under the tax line, if applicable).

Sum everything up, including the taxes and voilà! You have the final total the client needs to pay on the bottom line.

Sending E-Invoices

Once you’ve created the invoice and you’ve double-checked your calculations, you need to send it to your client in a timely and professional manner.

Email: This is the most common method of sending e-invoices. Simply attach the invoice (usually in PDF format) along with a note. Here’s an example:

Subject: Invoice [Invoice Number] – [Your Name/Company Name] 

Dear [Client Name], 

I hope you’re doing well. Please find attached the invoice for the [Project Name/Services Provided] completed on [Project Date]. 

The total amount due is [Amount], and payment is due by [Due Date]. 

If you have any questions or need additional details, feel free to reach out. 

Thank you for your business, and I look forward to working with you again! 

Best regards, [Your Name] 

 

E-Invoicing Programmes: Most e-invoicing programmes such as FreshBooks, Zoho and Invoicely allow freelancers to send their invoices directly through their program. They also have additional tools such as tracking features, templates and basic book-keeping tools. However, if you prefer more flexibility, you can also learn how to do invoices on Excel. This method gives you control over the design and functionality.

You should send the invoice over after the project or milestone is complete. Alternatively, if you are working on a long-term project, you should send the invoices monthly – depending on the agreement you made with the client when you first started working with them.

Late Payments

Any freelancer who has been in the game long enough, would have encountered a late payment or two. If ever this happens to you, here are a few tips for managing them:

• Start off by sending a polite reminder after the due date has passed. Here’s an example:

Subject: Friendly Reminder: Invoice [Invoice Number] Overdue 

Dear [Client Name], I hope all is well. 

I wanted to follow up regarding the invoice [Invoice Number], which was due on [Due Date]. I’d appreciate it if you could confirm when payment will be made. 

Please let me know if you need any additional information. 

Best regards, [Your Name]

• If you have included a clause about late fees, don’t hesitate to apply them if the payment is significantly overdue.
• Sometimes overdue invoices are because clients are struggling to pay. If this is the case, offer a payment plan. This ensures payment as well as maintaining a good relationship with your clients.
• As a very last resort, you may have to escalate the issue by going down the legal route.

Manage Invoices for Tax Purposes

Invoicing also helps you track your income for tax purposes. E-Invoicing programmes such as Freshbooks are a great tool for this but here are a few pointers to keep in mind:

• Track all incoming payments and unpaid invoices in a spreadsheet.
• Save all your expenses and receipts related to your business. This may lead to tax deductions.
• Hire an accountant for tax season to ensure you’re fully compliant with the tax system and to avoid any errors.

Looking to hire a freelance copywriter? Contact Copywriter Today!