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How to invoice as a freelancer: A brief guide

Chloe Frederick
August 3, 2023

How to invoice as a freelancer

If you want to get paid for your freelancing work, you have to learn how to issue self-employed invoices to your clients. A freelance invoice is a document which requests payment for services. It has an itemized list of your work, potentially including hourly labor rates, individual services, or even material goods you produce. It also will list ways in which your clients can make their payments and when these payments are due. 

Importance of invoices for freelancers

Invoicing is an important way to keep track of your business transactions and ensure that you are getting paid for your work. Not only does an invoice for freelance work give you a professional and clear way to request payment from your clients, but it also serves as proof of income for when it's time to file taxes.

Benefits of digital invoicing (third-party invoicing)

If you are intimidated by the prospect of generating your own freelancer invoices, using a digital invoicing service, like Ruul, can be beneficial. For one thing, you won’t have to create your own legal entity, which can be a daunting process. Secondly, you can work with businesses all over the world in a wide range of currencies. Additionally, a third-party invoicing service can provide a wide range of payment options to your clients.

Most importantly, some services can also help ensure that you are complying with local tax laws and regulations. Some freelance invoice generators may even provide additional services to make freelance finance management easier.

Ruul is the latest invoice generator for freelancers. Along with providing invoice templates, Ruul also gives you resources to organize all of your contracts, clients, and ongoing projects.

Drawbacks of not invoicing properly

Freelancers who invoice improperly risk missing out on payments, breaking local tax laws, and losing clients. For example, simply requesting payments informally through email or by phone might make you look unprofessional and lead to miscommunication between you and your clients. Moreover, without a clear record of your business transactions, it can be difficult to take legal recourse in the unfortunate event that clients don’t pay.

When should you invoice?

If you want to ensure payment and tax compliance, you should always invoice your clients every time you work with them according to your agreement. This can include:

- One-off projects

- Ongoing work

- First-time clients

Types of invoices

Aside from standard or final invoices you will be issuing for services rendered, there are a few other types which are a bit more specialized. These include the following:

Proforma invoice

A proforma invoice is similar to a quote or an estimate. It is a preliminary document sent to clients ahead of time with an estimated cost before you actually perform the agreed-upon services. This is used in the case of committed clients, so they know what to expect. However, it is not legally binding, so you will have to issue an official freelance invoice at the appropriate time.

Interim invoice

Interim invoices are actually a series of several invoices with periodic payments scheduled over a period of time. This payment timeline is generally used for bigger projects carried out over a longer period of time so that payment occurs in increments, rather than a large lump sum at the end. 

Recurring invoice

A recurring invoice is one that is issued over and over for services which are routinely requested by the same client. These are usually sent on a weekly or monthly basis, and will always have the same products and services listed. Only the issue date and invoice number change. 

Credit invoice

Also known as a credit note, a credit invoice is issued in the unfortunate event that a client requires a full or partial refund in the form of credit or returned funds. It may also be issued in order to cancel or correct an invoice you previously issued. It is structured much like a regular invoice, except the prices will appear in the negative.

Understanding freelance invoicing basics

What are the essential elements of an invoice?

Without readymade invoicing services, you will have to learn how to invoice a client for freelance work. The first step is to create a custom self-employed invoice for each client. There can be many other factors involved in creating an invoice, but these are the basics you must master:

  1. A header including: 
  • Your company’s name and contact information
  • The name and information of your client
  1. The main body of the invoice with:
  • The issue date and invoice number
  • A detailed rundown of goods and/or services provided
  • Any applicable taxes
  • The total invoice cost at the bottom
  1. A footer with: 
  • Payment options for your clients
  • The due date
  • Any discounts, penalty fees, or interest

Payment terms and methods

If you want to get paid on time, it’s important to be clear with your clients about your expectations. This can be done by clearly stating a due date at the bottom of your freelance invoice as well as the payment methods you accept. Payment methods can include transfer services like PayPal or Venmo as well as more traditional methods like credit card, checks, or even cash. 

You may also want to include in-depth instructions and a link to your preferred payment service to make things easier for your clients. After a clear explanation of payment methods, you should also define the payment terms. These will include things like discounts for early payment and penalty fees or interest for late payments. 

One of the many benefits of using invoicing services such as Ruul is that they can accept a wide range of payment methods in many global currencies and directly deposit payment into your bank account. This makes it much easier to work with international clients.

Taxes and legal requirements

Figuring out local taxes can be a tricky process. For example, if you are working within the EU, your services may be subject to a value added tax, or VAT. Freelancers in the US may need to charge sales tax. Countries with income tax may also require records of your paid invoices. Legal requirements vary from location to location, so careful research is necessary.

Sending invoices and follow-ups

Best practices for sending invoices to clients

Now that you know how to craft your document, you may be wondering how to issue an invoice as a freelancer. The most common way to do that is to simply email the invoice as a PDF attachment. 

When emailing invoices, make sure that the subject line is straightforward. Also, in the body of the email, summarize the main points of the document including the invoice number, due date, and total amount due. It's best for freelancer-client relationships if you show your gratitude and kindly thank them for their business as well.

As the payment due date gets closer, send friendly reminders to your client to ask if they have any questions or concerns. Sometimes, your invoice might have been forgotten or missed, so a friendly message is a good way to nudge them in the right direction. 

You can also request a ‘Read Receipt’ with your original message to ensure that they have both received and read your invoice. This is an option on most email services. 

Tips for following up on unpaid freelance invoices

There are many ways to deal with invoice disputes, but the main way is communication. The first step in recovering a late payment is to send email follow-ups. You can do this manually or even set up automated emails. It is recommended to send 2-3 follow-ups no more than one week apart.

The first email can be fairly gentle, simply to remind the customer about the late payment. The second message should have a sterner tone and show your insistence that the overdue payment requires immediate attention. The third email is when you should get serious and remind them about the legal ramifications of not paying such as late payment fees and even court action.

Strategies for dealing with late payments or non-payment

If you find yourself in the unfortunate situation where your client is dodging your emails and hasn’t paid yet, it’s time to start considering going to court. The first step is to send an attorney's letter or a ‘Letter Before Action’ notifying them of your intent to sue for their debt. Sometimes, this strongly worded letter is enough to motivate clients to pay. If all of that fails, you’ll have to see them in court.

Invoicing etiquette and communication

Always be professional when dealing with your clients. Respond within a business day to all messages. Even if you need some time to consider their requests, respond as soon as possible with a timeline they can expect for your full response. Additionally, make sure all your correspondence is professional in tone. Try not to speak too casually, as that can be off-putting, especially for first-time inquiries. Issue a proforma invoice if they seem highly interested.

The best way to avoid conflicts with clients is to keep a detailed record of your work and always communicate clearly. This means having a contract or some other record of your work agreement and copies of all invoices you have issued. It also doesn’t hurt to track your work progress through work monitor apps and frequent updates with your client. Using third-party invoicing services can help you keep this information all in one place and access it whenever you want.

Handling disputes and complaints

You will eventually have a client who makes a complaint about your work or disputes your final invoice. If you are at fault, it is best to be apologetic and immediately issue a credit invoice. This may be a full or partial refund, depending on the issue. If you remain calm and handle it with integrity, you may be surprised by how often clients will return despite past complaints.

If you feel that they are at fault, it is still important to remain calm and communicate professionally. If you have kept clear records of your transactions through your invoices and a work contract, it should be fairly simple to get to the bottom of the issue. You may also bring in a mediator. However, in some cases you may need to stop working with the client or even go to court for missed payments.

Additional Tips

- Do not include your social security number–no client should ever need it.

- Use an invoice template–having a professional-looking invoice makes you look great!

- Keep it simple and clear.

- No need for fancy fonts or colors–these can make you look unprofessional.

- Consistency is key–if clients know you’re reliable, they will work with you again.

Consider using Ruul

If all of this seems intimidating, you are not alone. Even experienced freelancers can struggle with aspects of invoicing. That’s why using a service like Ruul’s global invoicing can be beneficial. With Ruul you will benefit from:

  • Freelance invoice templates 
  • Invoice tracking 
  • Easy recordkeeping 
  • Access to multiple payment methods
  • Ability to work with international clients 
  • Client management
  • Tax assistance
  • No need to create your own business entity

FAQ

What are my legal obligations when invoicing?

Your legal obligations will depend on your location. You will need to find out if you need to incorporate VAT or other taxes into your invoices to comply with local regulations. You may also need to keep copies of all paid invoices as proof of income to determine your personal tax burden.

How do you resolve a disputed invoice?

If you made a mistake on an invoice, you must issue a credit invoice to partially or fully refund the client. If you’re not sure who is at fault, you may need to find other mediation strategies or potentially end the business relationship. It’s the best practice to 

keep clear records of all transactions. 

How can I customize my self-employed invoice template?

If you are creating your own custom invoice, you have full control over the layout and which information is included. If you use invoice templates you will only need to fill out the service description, project specifications, and the invoice total.

What can I do if a client doesn't pay on time?

If a client doesn’t pay on time, you can send reminders in increasing levels of urgency. After that, you can issue a strongly worded attorney’s letter or a ‘Letter Before Action’. In the worst-case scenario, you can also sue for the debt.

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