An Invoicing Guide for Companies

Table of Contents

What is an Invoice?

How to Create Invoices

How to Send Invoices

Getting paid

Quick Tips for Creating Invoices

What is an Invoice?

An invoice is a document created by a seller or service provider and sent to a buyer or client, always related to a sale or a rendered service. From a freelancer perspective, the invoice is one of the most important pieces to keep track of supplied goods or services. An invoice is essential for a freelancer to receive payment and contains every detail about a freelance task or client project.

What’s difference between an invoice and a bill?

An invoice is a payment request and includes important data to review, approve, and transfer payment to the freelancer. Invoices typically include the freelancer’s business name, registered business address, agreed payment conditions, unique invoice number, and tax details depending on the country. A bill typically will not include any of the above details. The main difference between an invoice and a bill is more a matter of use and the individual business perspective.

Why do freelancers need to send invoices?

If the freelance service isn’t settled up front by the client, an invoice is the most efficient way to receive payment. Freelancers need to send invoices in order to request payment for their services. Therefore, invoices are essential for freelancers and clients [https://freework.com/client-management] (at least their accounting departments).

How to Create Invoices

How do I create an invoice using Freework?

Our Freework invoice tool is specifically built for freelancers, digital natives, and contractors. Simply add a client Client Management and the tracked time Timesheet Management to create an invoice with just two steps. All other details (e.g. invoice date, invoice number, due date) are automatically assigned to each invoice/bill.

Unique Invoice Numbers

There is one important invoice rule: The invoice number should always be unique. Don’t use the same invoice number more than once. Keep things simple and start with the number 1 for your first invoice. The number should also never contain any gaps or spaces. Another way to create unique and more specific invoice numbers is to include the year and/or month when the invoice was created (e.g. your first invoice in 2019 would be 19001, the second invoice 19002, etc.)

Business Information

Be sure to include all information about the freelance and client businesses on your invoices. Add the registered business names, billing addresses, and contact details (reference person, email address, phone number) for both sides.

Business Name and Address: The registered business name (company number) and address should be added to the invoice.

Client’s Name and Address Add the client business name, address and a name of contact persons to the invoice.

Invoice Number: Add a unique identifier to the freelance invoice (e.g. Invoice number “18001”)

Invoice Date: Date of the invoice.

Payment Due Date: In addition to the invoice date define a payment due date (e.g. “Within 15 days”).

Payment Info: How should the client make payment? Add further information (Credit Card, PayPal, Stripe) or provide an online payment solution.

Service Information: Add details about the billed tasks and services (e.g. attach timesheets or list with worked hours).

VAT Registration Number: Add value added tax identification number (if it’s legally bound).

Discounts: Use discounts to reduce the total invoice amount

Notes: Add additional contextual notes for your client. -** Business Footer**: Use the footer for further details (e.g. payment options) or a simple phrase like “Thank you for your business!”

Invoice Date and Payment Due Date

The invoice date represents the date when the invoice was issued and sent out to the client.

The payment due date is dependent on the invoice date and defines the deadline when the client must pay. Normally the due date will be defined in agreement with the client. Common due dates are “On Receipt”, “Within 15 days,” or “Within 30 days.”

Add Service Information

Specify all services supplied with a detailed description, quantity, service, project, or hourly rate, amount, and subtotal. Make sure the client can understand every single detail in order to be paid on time.

VAT and Discounts

Often freelancers charge VAT based on the invoice amount. The invoice tool from Freework helps to calculate the total amount. Just fill in the right VAT value (e.g. 7%) and the app will calculate the correct total price.

Discounts can help freelancers to get paid faster. Simple combine the discount with the payment due date (e.g. if the client pays within 15 days the freelancer can grant 2% discount).

Other Notes and Footer

Add these fields to include additional information for your client. Notes can include special details about the contract or proposal between freelancer and client. The footer can be used to outline important details about payment, due date or just for a few nice words such as, “Thank you for the business!”

How to Send Invoices

How do I send the invoice to my clients? Once all fields are filled out, the client and the timesheet is attached there are multiple ways to send the invoice. With Freework it would be just one step: hit the “Send Invoice”-button (we also provide a test email functionality to double-check the invoice). Another option would be to send the invoice through your email client. Convert the invoice to PDF and upload the file to an email to send to a client.

Getting Paid

Use Online Payment Methods to Get paid. Before sending an invoice to a client, agree on possible payment methods and give the client multiple options to pay the invoice. Include all possible payment options (e.g. “Pay Online”) and provide information on how to use all payment methods. Common payment solutions, in addition to bank transfer, are listed in the following table:

PayPal: PayPal is an online payment service that allows freelancers and businesses to transfer funds electronically.

Credit Card: Freelancers, Contractors, or Digital Natives can accept credit cards to get paid. Typically credit card payments are accepted through Stripe, PayPal, or other online payment providers.

Square Cash: Transactions with Square Cash are free with debit cards (not with credit cards!) In general, it works similar to PayPal or Venmo.

Checks: Checks are the cheapest and easiest ways to receive payment as a freelancer. The advantage is there are almost no fees, however payment is not instant.

Venmo: Receive transactions or payments through Venmo and easily transfer the money to a bank account.

Freelancers often have to run after their money and send a variety of reminders to clients. Additionally, it is common for larger invoices to get paid later..This sucks! Navigate these issues by creating and sending invoices directly after the work is completed. Don’t keep clients waiting too long–otherwise they might get the feeling that there is no rush to receive payment. Freework provides a payment solution (with Credit Card, Apple Pay, Google Pay) for freelancers to get paid on time. The Freework app is a one-stop-shop to track tasks & time, manage clients, create & send invoices, and receive money–in just one app.

Quick Tips for Creating invoices–and getting paid on time!

Create a detailed invoice with all the information the client needs

Save all sent invoices in an easy-to-manage place: Google Drive, Dropbox, or Freework

Send invoices on time

Set a payment due date and payment terms

Use online payment tools to simplify the client payment process