Freelancers often face payment problems when working on a project. It could be due to negotiation issues, payment methods, or payment records when working with multiple clients. So to overcome this problem, invoices are used. In your freelance career, you should know how to make an invoice as a freelancer.
This article would be a complete guide for you as it will cover all the crucial points of writing an invoice.
What is an invoice?
An invoice is a statement or documentation of your business or freelance transactions. In a business dealing or a freelance contract/project, a seller sells goods or services to the buyer/client. The seller then sends him an invoice that states all the details of the work and gets paid.
In other words, to maintain a record of transactions between a buyer and a seller, we use invoices.
How invoice differs from a bill?
The only difference is that a bill is received, and an invoice is sent. When a seller sends an invoice to a buyer, he will accept it as a bill. An invoice is written for requesting payment, and a bill requires you to pay money. Simple!
Importance of sending an invoice
Maintaining accounts is very important so that we can follow the economic and financial position.
- To calculate profit
- To calculate expenses
- To analyze product popular and profitable
How to make an invoice as a freelancer?
Writing an invoice is an essential part of your freelancing career. There are several different ways to make an invoice.
- You can write an invoice in Google docs, sheets, Excel, or Word.
- You can download an online invoice template and customize it.
- You can use QuickBooks, FreshBooks, or any other invoice generator to streamline the invoice creation process.
Quickbooks Online is a comprehensive accounting system marketed by Intuit. It allows you to utilize the features like electronic payment, online banking, marketing options from Google, manage bills and payrolls. You can also import Excel spreadsheets for the 2008 version. QuickBooks are mainly used for small and medium-sized businesses.
FreshBooks is also a Bookkeeping software marketed by 2ndSite Inc., primarily used for small and medium-sized businesses. It offers and supports invoices, payrolls, time tracking, management reporting, multiple tax rates, and currencies. It has user-friendly features. FreshBooks is recommended chiefly as the best software for freelancers or solopreneur.
Steps for writing an invoice
If you want to know how to make an invoice as a freelancer, it should contain the following essential elements.
- Invoice header
- Contact details
- Date and invoice number
- Terms and conditions
A header should be mentioned that says you are sending an invoice with the company name and logo (if any). It would be best to understand that your client might be dealing with so many messages and emails. So to grab his attention, “INVOICE” should be mentioned in large and bold letters at the top of the page, so the client should know what you have sent, and he will then consider it necessary.
Contact details block should include your contact information. Your name, mailing address, email address, or any other option for your client to contact you, i.e., WhatsApp, Skype, etc., so if he has any confusion, he can contact you and negotiate, or as a perk, he can refer you to others.
The client contact details should also be added to ensure that the invoice is sent to the right client.
Date and invoice number
The next most vital element to write in an invoice is the date and invoice number. The date it was sent and the date it is due should be mentioned in an invoice. Mentioning the due date would help the client to make payment on time. Usually, the due date is set for one or two weeks.
The best way to organize your work is by year, i.e., 202107, or by project name or client number; it depends on how you want to manage your job as per your comfort. An invoice number should be mentioned for paperwork organization. It should be a unique number for internal or external references. Invoice number helps you to track the record of your transactions.
This section is the crucial part of an invoice, so you should write it with great concentration. It includes a detailed list of your work. The client should know that what he is paying for.
Your work details could be written in listed or table form. Everything should be written in a precise and transparent manner. If you worked at an hourly rate, mention how many hours you worked on that project. Likewise, if the project was done at a fixed rate, it should also be noted.
Terms and conditions
Specify your payment terms. Be clear about the payment method. Try to give available options to your client through which you can receive money. Mention that whether you accept payment through bank or PayPal, or Payoneer or any other platform.
The payment method should be discussed before signing the contract. Just mention that in the invoice to remind the client.
In the end, write a one-line note for your client and tell him that you liked working with him.
Should you always send an invoice?
The answer is yes because it provides you financial protection and makes filing taxes. An invoice helps you in finding crucial financial information in the long run.
When and how to send an invoice?
An invoice should be sent at the end of the contract. Usually, a pdf form is preferred for this purpose. Email the invoice with a cover letter and feedback to the client. Show some gratitude and thank him for working with you.
Lastly, ask the client to reply if he has received the email.
Invoice like a professional. Now you will get an idea on how to make an invoice as a freelancer.
Wish you a very happy and successful freelancing journey!