9 things a textbook won’t teach you about invoicing
Photo by Ibrahim Rifath on Unsplash
Please give yourself a round of applause if this doesn’t apply to you, but historically creatives have always had a fairly bad reputation when it comes to admin. That’s right, we’re talking invoicing. Most of us hate doing it, but if you’re a freelancer, and you want to pay your rent, i’m afraid it’s pretty essential!
Educational institutions cannot cover everything - so this is in no way a uni-bashing / shade-throwing, how to. You have to learn this stuff for yourself in practice. That doesn’t mean however that you have to learn the hard way… here are nine top tips for invoicing that we wish we’d known sooner!
01: A clear label
Sounds simple right? Your invoice MUST be clearly labeled as ‘Invoice’, large, in your face and obvious.
02: Filing
It’s really important that you have a clear file naming system for your invoices, so clients can easily translate what job the invoice is in relation to and match it up to the initial quote. Each reference number must be unique. A common trick with these is to start from 100 though, not 1 (simply so it never looks like your first client invoice!).
03: Software
Using tools such as Quickbooks or Xero can make the accounting process a lot easier. Track your expenses, revenue and quickly calculate tax in a foolproof way. And it’ll keep your accountants bills much lower (if you employ one down the line).
04: Prices
The key to success here is transparency. Your rates should be agreed with your client in advance and confirmed on a quote, along with your estimation for how many hours or days you plan to complete the job in.
We’d always recommend keeping your client up to date with your hours and progress. If you’ve spent more time on it than initially planned, discuss this with your client promptly, to prevent any surprises when it comes to the final invoice.
05: Expenses
Agree upfront and confirm in your T&Cs what expenses are also billable, this will prevent any delays with payment. Make sure you also gather receipts and proof of purchase for speedy reclaiming. This must be a full itemised receipt including the time, date and VAT paid - not just a credit card machine receipt.
06: Format
This is pretty important too and often overlooked. You should send your invoice as a PDF. No Word documents, no spreadsheets, a PDF. Easy. This is so regardless of your client’s device and software, they will be able to open and view your invoice.
07: Invoice terms
The ‘term’ is the number of days between the invoice being issued and the payment due date. Standard terms are 14-30 days, but be warned, some large companies work on 60 day terms and they don’t budge on that, so just factor it into your timeline and get that info upfront.
08: Sending the invoice
Your invoice should be attached to an email and ideally sent to the client’s accounts department, with your client on copy. If you don’t have a direct accounts contact, just your client is fine.
09: Payment
You may find it useful to set up a company bank account. This is simply for ease of tracking what goes in and out and keeping personal separate. End of year accounts will also be made a whole lot easier if you do this. For more info on banking options, read here.
And that’s it! We hope you found this feature useful. Please share this article with anyone you think would get value from it.
