The art of the invoice: how to submit your best bill
One of the challenges freelancers often face is getting paid on time. Clients sometimes see freelancers as less professional than established businesses, and might not take their payment requests seriously. As a freelancer, it’s imperative that you set up formal and clear payment policies so that your clients know you mean business and want to be paid on schedule. One of the most important aspects of this, is the invoice you send your client.
Don’t just type it up in Microsoft Word or Excel
While it might be the quickest way to crunch the numbers, it doesn’t look professional. A Microsoft Word template is already better than a simple typed up document without formatting, and there are a plethora of free invoicing tools online that will help you build a professional-looking invoice.
Professional accounting or billing software is also a great option, enabling you to manage your expenses and income anyway. Services like Time Doctor, Paymo and Envoice enable your clients to pay you directly from the invoice you build, making the whole process even easier for both sides.
Always include your business logo on the invoice template, along with your contact information.
Create your payment policy
The best way to get paid on time is to let clients know what “on time” means. Creating a payment policy will communicate that. You might, for example, want to be paid within 10 business days of sending the invoice. Indicate as much on your invoice template so clients have an understanding of their timeframe to pay.
Note that big corporations will often have a payment schedule that is standard for vendors, and it is likely non-negotiable.
Always send your invoices in a consistent manner. That might be:
- The 1st and 15th of each month
- Before project commences
- At the completion of a project
Let your clients know up front when to expect an invoice from you. Many freelancers request a percentage of a project fee up front before work begins as an indicator of goodwill, especially in large-scale projects.
If you’re working directly with a client, it’s a good idea to think about signing an agreement before commencing a project. This will serve to protect you and your client, and will decrease the likelihood of miscommunication and late payments.
Send a gentle reminder
Seventy-one percent of freelancers have encountered trouble collecting payments at least once in their careers. Sending your client a gentle reminder a week or so after you send the invoice is a good way to decrease the chances of payment issues. This may seem like an awkward or uncomfortable task; Payoneer helps freelancers by taking care of this task for them. Sending a Payment Request via Payoneer will trigger a series of automatic email reminders to your client at set intervals (you can turn these off, if you prefer). That way, you can minimize the discomfort by having your payments system take care of it for you.
Get people to pay faster
Sometimes, despite your best efforts, a client will drag his feet in paying your invoice. If you’ve communicated your expectations and still can’t get paid on time, consider implementing one of two pulicies:
- Charging a late fee:If the payment is received past your payment window, institute a small fee, usually a percentage of the invoice total. This policy should be stated in advance, either in the project agreement or on the invoice.
- Offer a discount for early payment: The reverse is to reward clients for paying early. Give a small percent discount if they pay promptly, or before the invoice is due.
Whichever method you choose, communicate it in advance of implementing the policy to give clients time to adjust to it.
As a freelancer, it’s important that you are just as professional as a giant corporation would be in invoicing clients. Having policies in place, as well as clear communication, will go a long way to getting you paid on time.