You’ve set yourself free from the corporate world. You are a freelancer. An independent contractor who wants to climb up the success ladder. To live and prosper as one, you need to gain sufficient income, which means receiving payments for your rendered services. This is the main reason you need to know how to fill out an invoice for your work.
Adopting the right invoicing method will lead to legally accepted business activities, correct payments, and transparent relations with your clients. Mistaken or half-done invoices can have a negative impact on your credibility and finances.
Some freelancers have invoicing software to back them back. Others choose to go through the ordeal of writing an invoice by themselves. Nevertheless, knowing how to write an invoice for freelance work is necessary for every freelancer. Keep on reading to learn the functions of all those different parts that make up your invoices!
What’s an invoice?
An invoice is a financial document issued by a service provider or seller to a buyer for services rendered and goods sold. Its primary use is to seal a deal of exchange between services/goods with monetary remuneration.
The issuer has to include in the invoice a list of all the services and goods. The explicit prices, along with other information relevant to the transaction, should also be clearly stated. The simplest standard invoice for independent contractors must have these pieces of information.
How to write an invoice for freelance work step by step
Let’s see one by one every piece of information you need to include in your invoice and what purpose it serves.
Invoice header: The brand builder
The header is the section of the invoice where you can customize your invoice according to your brand identity. You can also set the self-referential title “ Invoice” to give the document its usage tag. At the same time, the upper part of your invoice has pivotal information about the invoice.
Add an invoice logo
The invoice logo is your company’s emblem. You can position it right or left depending on the contractor invoice template you’re using. Including it in the invoice will separate you from the sea of freelancers who add their names instead. A well-designed and eye-catching logo will demonstrate your professionalism as well as make your business recognizable to others just through a small and simple design.
State your and your client’s information
It’s only logical that your business information will be at the top of the header or after it. Your company name, company slogan, tax ID, street address, email address, phone number, and any other way you prefer to be contacted. All this information is necessary to make your client feel safe. It’s also useful if the other party wants to discuss potential issues or ask questions.
You should also include your client’s business details (plus the position of the person that will process the invoice) under your details or on the opposite side of the invoice. Remember to double-check them with your clients or by looking for them online if your client has a website.
Invoice Number: Filing your business
What is an invoice number? How do you choose the numbering format? Could you omit it once or change it whenever you want? These are just a few questions that come to mind when hearing the phrase “invoice number.” The bottom line is that if you add no invoice number, the invoice is not valid.
An invoice number is a unique number to each invoice that carries accounting and taxing information. It should be added near the top of the invoice and should never be forgotten. Writing an invoice without an invoice number is not legally allowed.
The invoice number should consist of either numbers or letters and numbers. It should also be sequential with no repeated or missing numbers. These guidelines are particularly critical, and you have to be extremely careful to follow them religiously. However, if you want this process streamlined, the use of invoicing software can save you this trouble as it will automatically calculate the invoice number following the order numbering you’ve started with.
Some basic examples of numbering:
Alphabetical Numbering
Start your counting with the initials of your company. If your business initials are BBD, then you can mark your invoices as BBD1, BBD2, and so on and so forth.
If you want to make each invoice more specific, then you can add the initials of the client or project.
Numbering based on the date
Consider numbering them according to the current year as 20/0001,20/0002, 20/0003 for 2020, and 21/0000,21/0001,21/0003 for 2021.
You can, of course, find the right combination to create the ideal invoice number system to cover your professional needs.
Invoice Date: When everything begins…
The exact day that you issue the invoice may not seem extremely significant. However, it’s critical to set the invoice date so that your clients know the payment window they have for the invoice. The invoice date impacts the invoice due date since the first determines the second.
Invoice due date:…and everything ends.
The invoice due date is set on the other side of the invoicing timeline. It’s the ending date that your client can settle your accounts. You should be careful to always write the invoice due date clearly with a day, month, and year to avoid misunderstandings.
Rendered services in detail
In order to get paid for your freelance work, you have to describe all your services and products in your invoice explicitly. Dedicate a line for each service that you offered and each product that you sold. You should include the quantity, unit value, and net value for each of them. Discounts for your work, if any, must be declared for each of the items in your invoice.
Proper taxation in invoices
First and foremost, the total tax amount should be included along with the tax percentage. Taxes like the VAT ((Value Added Tax-in most countries around the world) and the GST (Goods and Services Tax- in Canada, Australia, India & Singapore) have different percentages depending on the country you’ve registered your business in.
Invoice Currency: $, €, or £?
Apart from the rights taxes, when writing an invoice for freelance work, you need to choose the appropriate currency. If you freelance in the States, then you invoice all your clients in dollars. The same rule applies if you work within the EU, and thus your rendered services are paid in euros.
However, if you have international customers, you could consider pricing your services in your client’s currency. To invoice them the correct amount for your services, take into consideration the exchange rates at the issue date, or agree on the exchange rates with your clients. This may seem like a hassle if you do everything by yourself. However, choosing invoicing software can save the day by showing you the latest exchange rates for every currency and adjusting each amount to the currency you prefer.
Total amount due
The next step is to write down the total amount to be paid for your services. For the practitioners of manual invoicing, this could lead up to miscalculations and omissions. However, online invoicing users cannot imagine working without their invoicing software since everything is automatically computed, and the grand total is ready is milliseconds.
Set your invoice terms and conditions
The payment terms for invoices are an integral part since it sets the bar for all your business dealings. So, you have to come up with your payment terms and conditions and state them explicitly to cover various possible scenarios. For example, you could set that paying within the first ten days may guarantee a 10% discount or an outstanding payment could end up to an extra % as a late payment fee. And trust us, it’s not the only extra fee you can incorporate into your invoice terms and conditions.
Generally, the typical payment terms include payment details around the date of payment. Some examples could be “Please make the payment in 10, 15 or 30 days from the issue date” (depending on the terms you’ve set) and “You’re welcome to make the payment through Paypal, Stripe, with a bank transfer, or even in cash (if you prefer). The more online and offline billing choices you offer for the payments, the better it will be for your clients.
That’s why invoicing platforms offer the possibility to connect your invoices with multiple payment gateways. Your clients are just a click away from paying you, which cuts in half the percentage of outstanding payments.
Last but not least, be careful of the wording of the invoice terms and conditions and attitude. Be polite, crystal clear, and try to cover good and bad payers altogether with your terms.
Never forget the “Thank you” message to customers
It seems that you’ve finished with all the technical parts of your invoice. What’s left is to add some simple thankful lines to let your clients know that you appreciate them for the collaboration.
A “Thank you” message shows your gratitude, creates good working relations with them, and encourages future cooperation. It may also prompt your clients to suggest your services to their professional circle. Part of knowing how to write an invoice for freelance work is embedding the social aspect of your transactions.
Keep it simple like “Thank you for your business. It is my pleasure to work with you.” Or, add something along the lines of “ I’m always available for any questions or the chance to collaborate on future projects,” Regardless of the wording, you should find your style and make your clients feel special.
How to write an invoice for your freelance work with Elorus
If you’re taking your first tutorial steps on how to write up an invoice, an invoicing platform is an ideal invoicing helping hand. You could always resort to self-employed invoice templates, but there are time-consuming and lack invoicing features that would definitely benefit your business.
Elorus, as a reliable software, automates most of the invoice-related tasks you would otherwise do by yourself. After issuing your invoices, Elorus sends an email to your client’s email address with a link that provides access to the invoice, which can also be downloaded as a PDF. You can adjust the text as you please and then apply it to every client. Thus, you don’t have to worry about how to send an invoice to your clients as the invoice email will be sent automatically. To improve collaboration and communication, Elorus has its own client portal that your clients can access and monitor ongoing projects, pay their invoices, and check out reporting data about their transactions with you.
At the same time, Elorus will send you payment reminders about outstanding invoices and let you know when you’ve received any payments. Moreover, it gives you the option to create recurring invoices. Consequently, it notifies you every time a new recurring invoice is issued. On top of everything, Elorus offers you an extensive reporting system to monitor your cash flow, outstanding invoices, sales, and your clients’ balances. And if you work on a project basis, then you will be able to manage projects too, not only in terms of invoices.
All the above are not fairytales; you can find them here. Sign up for Elorus with our free plan and start making your freelance life easier today!
