How To Invoice Clients As A Freelancer
Chasing payments is not an unfamiliar scenario for freelancers (unfortunately.) Not only is it time consuming, it can be a touch awkward. Always remember, you delivered the work on time and as specified, therefore payment should be reciprocated. At Australia’s Freelancing Hub we look at some invoicing best practises, to maximise your opportunity of getting paid on time everytime.
How you communicate the payment expectation with your client will establish the dynamic moving forward. You need to be crystal clear; don’t assume anything, state everything, as there should be no barriers or misunderstandings to prevent a smooth transaction. The last thing you want to do is confuse or negatively impact client relationships. An invoice is a reflection of how well you do business.
Okay, a touch dramatic but you need to expect the best and prepare for the worst. You trust people not to enter into bad faith contracts but it does happen. A quick internet search or sussing out your clients on social media can’t hurt. Read a few testimonials or reviews and get a feel for them. The last thing you want is to end up at your local Civil & Administrative Tribunal.
Keep It Simple Sweetheart! This might seem obvious, by you know yourself the times you’ve scanned an invoice unable to find the salient information. Your invoice needs to be a comprehensive and accessible document of the work you’ve done, the amount it costs, how to pay and when. This is not a scavenger hunt: key details must be prominently displayed so they can be detected at a glance.
Freelancers are often creative souls and the desire to represent a brand is paramount, but don’t let it dominate this space. Make the information as visual as possible. Ensure the invoice number, the work order number and due date stand out. Itemise and describe the products and services provided because the person paying the account may not be the person who contracted the work. Several people or departments may need to reference your invoice, so write it for those who weren’t part of the brief.
You must have the conversation about payment terms. They get reiterated in the contract of course, but including your T&Cs on the invoice keeps everyone on the same page. Don’t assume everyone has access to the contractual fine print.
Points to consider:
- How much is the total cost of the project?
- Are milestone payments optional for deliverable deadlines?
- What date do you invoice and when is payment due?
- Preferred method of payment? (direct deposit, card, cash, cheque)
- Late Payment Fees?
- Penalties and process for non-payment?
- Deposit or down payment percentage?
Be prepared to negotiate with your client: open with your preferred payment process but consider accommodating reasonable requests.
Securing deposits or down payments is more common than you might think. It will minimise your risk, build trust and establish payment expectations from the outset. Depending on the amount of work involved, the standard deposit ranges between 25%-50% of the completed work. If you get a firm ‘no’ as a response, recognise it as a red flag.
Regiment your process. Not only does it position you as a reliable, respected supplier but when it comes to money, people like routine. Invoices that arrive on a specific date and are due on a regular date create a habit and habitual payments is the name of the game. Your routine inspires their routine.
Invoices need to include the following information. Again, don’t assume the person who briefed you is the same person paying you. Write for fresh eyes.
- Your company logo (if available)
- Your name
- Registered office address
- Invoice date
- A unique invoice number and write the word ‘invoice’ prior to the numerals
- Work order, job code or purchase order number
- Name and address of client
- Line item quantities, descriptions and costs of products and services
- Total amount owed
- Due date including agreed T&Cs
- Banking options and corresponding details
Include exchange rates, tariffs or additional costs for overseas customers. This should be part of your initial onboarding conversation, but a reminder will circumvent short payment.
A simple one-liner on your invoice to say “Thank you for your custom” or “Your business is appreciated” goes further than you think. It’s not mandatory but it is polite.
Get to know the people that pay the accounts. Be patient and polite when dealing with them. Most folks tend to be kurt when chasing payment but if you make a good impression, they will favour interactions with you. It’s human nature.
The world spins on overdue clients: whether cash-flow issues, insane schedules or communication breakdowns, you’re going to hear it all. If you accept their excuses, they’ll smell blood in the water and consider you a soft target. That’s why creating the initial expectation is crucial.
You need to start chasing your payment immediately after your terms have been ignored. You are a perfumed steamroller, diplomatically asking for what is rightfully yours, but as you move further through the process you need to weigh the risk/reward ratio.
- Send an OVERDUE statement requiring IMMEDIATE payment (include late fees)
- Make a phone call, most people will be prepared to provide an update
- Social media tends to respond quicksticks to avoid brand damage
- Alert them of Post-Judgement Interest
- Consider suing (no one wants to go to court – your client doesn’t need to know that)
- Send an attorney’s letter
- Have your day in court (Civil & Administrative Tribunal)
There’s a substantial number of free accounting software and template options for freelancers, entrepreneurs and small businesses. With accounting software, you’ll know exactly what your expenses are, how to reconcile accounts, how to invoice in multiple currencies, provide various online payment options and of course accurately bill clients.