Have you ever thought that invoicing is just a small matter in your business as a freelancer? That little piece of paper is actually a powerful document that contains several information to help both you and your customers. It is especially crucial for you, a freelancer who provides intangible services to different clients at varying lengths of time.
Most freelancers consider themselves a one-man business. Some may not even be providing invoices to their clients, as they think that once they finish the project and get paid, they’re done. Creating invoices is still important for freelancers so that they will have a tangible record of customer payments, any debts incurred, and their own business expenses.
What Your Invoice Should Look Like
Before you accept a project from a client, inform them that you practice billing and invoicing. Advise them that they’ll get an official receipt from you every time they make a payment and once your project has commenced. This is to set their expectations straight and this also sends them the signal that you are indeed a credible and organized freelancer.
If you have a lengthy project or one that has difficult-to-itemize skills, you can create interim invoices. These are invoices that include an approximation of ongoing project costs. You may then issue a final invoice upon project commencement, then credit any over or underpayment the client may have made.
The components of an invoice that a freelancer must add to the ones they’ll be issuing include the following:
- Your own name or your brand’s name (whichever is applicable)
- Business identification numbers
- Contact information
- Business address
- Invoice tracking number
- Date of invoice creation
- Client’s name
- Line item organization, which must include the project you worked on and the specific tasks you did that needs compensation
- Payment deductions or discounts
- Total invoice charges
- Payment methods accepted
- Payment due date
You must pay special attention to the line item organization. This component is where your client will see the intangible goods he ordered in the form of your services. Hence, list down all the tasks that you did which needs to be paid.
If you properly fill out your line item organization, your client will know what exactly he is paying for, you’ll be able to determine your expenses and cost of labor in each task that you did, and you won’t have problems when you file your taxes.
How to Create Your Invoice?
Are you worried that invoicing will add to your operational expenses as a freelancer? Don’t be. The cost of creating invoices is very minimal. In fact, you can even utilize online tools such as websites offering blank invoice template. You can quickly download the template to your computer, fill in the appropriate details, and print it out easily. You can even customize it to suit the niche that you’re in.
Conclusion
Freelancers are not exempted to proper invoicing practices. They must ideally issue invoices to their clients to streamline their own financial operations and become as transparent as they can be to the clients. Invoices also facilitate easier tax payment transactions. Invoicing should not add a burden to freelancers, as there are lots of automated tools and templates online that can help them in this regard.