If you’re new to freelancing, writing an invoice can be challenging. You want to look professional, but you don’t know what you don’t know.
That said, you know good invoicing practices are crucial to your success. Not only does this ensure you get paid, it can help you manage your finances and client relationships.
To help, this quick guide will tell you everything you need to know to create efficient invoices quickly — including the dos and don’ts of invoicing!
When to Write an Invoice
When you send an invoice depends on the type of project you’re contracting and the terms of your contract.
In general, if you’re doing a one-off project, you’ll invoice for 50% of the project before you start work. Then, after turning in the project, you’ll invoice the remainder of of your project fee. With this arrangement, you’ll send the first invoice immediately after the contract is signed. The final invoice will be written when you turn in the project deliverables.
If you’re contracting a retainer project, you may ask for payment in advance or in arrears. Either way, you’ll send an invoice every month to cover that month’s services.
What to Include in an Invoice to Get Paid Sooner
Including the correct information on your invoices will help you get paid sooner. Clients can only settle their accounts if they understand how much they owe.
Here is a list of essential data to include in your invoice layout.
- Invoice number
- Invoice date
- Client information
- Itemized list of products given or services rendered
- Payment terms
- Payment methods
- Due date
Invoice numbers provide an easy way to identify a specific invoice and track payments. Make sure to number invoices consecutively so you always know which is the latest.
Invoice dates indicate when you issued the invoice.
Every invoice you create should include the name, address, and contact details of both you and your client. The more accurate this information is, the easier it will be to keep your finances organized and for your clients to get in touch with you if necessary.
Itemized list of products given or services rendered
An itemized list of each product or service you charged for is a necessary part of the invoice. Note the quantity, product name, and price of each item.
Be as specific as you can in the description. If you’re invoicing deliverables, such as articles, graphics, or website copy, you may want to include the date each item was submitted.
Payment terms help you manage expectations on how your client should pay. Should the invoice be paid online or using a specific platform?
It’s also important to clearly explain how long they have until payment is due, any discounts available, when late fees occur, etc.
A good invoice lists the payment options available to your client. These can include cash, check, credit card, bank transfer, etc.
There are also a few optional items you may want to include when writing an invoice, such as a breakdown of individual charges or a payment schedule that outlines the payments your client needs to make over time.
Dos and Don’ts of Invoicing
Keep these dos and don’ts in mind when writing your invoices.
What to do:
- Invoice regularly according to your payment terms.
- Get agreement upfront on expectations and due date.
- Include all necessary information in the invoice layout, including your business name and contact details.
- Give clients various payment options like online transfer, debit/credit card, or cash.
- Follow up on unpaid invoices and remind customers when payments are due.
What not to do:
- Wait too long to invoice after providing a service or product.
- Use sloppy formatting or spelling.
- Mess up the details for invoices, like the due date or amount due.
- Let late payments drag on for too long without follow-up.
Tips for Efficient Invoicing
Your invoicing strategy is the backbone of your business. Efficient invoicing boosts your cash flow.
You can make the invoicing process faster and more efficient with these tips.
Much of the information included on invoices is standard. Invoicing templates can be used as tools for quickly generating invoices. You simply enter the necessary information and let the template handle the formatting.
Templates also help you make sure that nothing is left out.
Automated invoicing and payment platforms like Hopscotch can help you quickly create, send, and track your invoices with just a few clicks. Invoices are automatically generated according to your preferences and sent out when payments become due. Automation helps to streamline the invoicing process.
Keeping accurate records of your expenses and income is essential for efficient invoicing. However, using your spreadsheets can be time-consuming when you’re a business owner with many transactions to manage.
Dedicated bookkeeping software can help you track your finances more efficiently.
Offer multiple payment methods
Offering a range of payment methods makes it easier for clients to make payments on time. Invoices should include information about payment options, such as credit cards or cash.
Send regular late payment reminders
Some clients may take longer to pay than others. Regularly sending payment reminders is a great way to ensure your invoices get paid promptly. It’s important to be polite but firm when dealing with late payments, as you don’t want to create unnecessary friction with any customers.
Consistency is vital when it comes to invoicing. Invoice your customers regularly and on time, and use the same format each time.
Writing an Invoice: The Big Takeaway
Invoicing is an essential part of running a successful business. These documents should include all necessary information in a clear, organized format — using templates can help you quickly create invoices with all the required details.
One way to create an effective, consistent invoicing strategy is to use automated invoicing tools which reduce manual labor, human error, and keep track of payments in one clear ledger.
Using the information and tips discussed above can help you create an effective invoicing strategy that keeps clients happy and paying on time.