The world of client invoices can be difficult and can create huge headaches for freelancers and entrepreneurs who are merely trying to collect what is rightfully owed to them. However, there are smart tips and techniques that you can use to make invoices a bit easier. In this guide, we’ll cover ten client invoice tips.
There’s nothing better than working as a freelancer or owning your own business. Instead of being at the mercy of a demanding boss or a company that doesn’t appreciate your talents, you get to be your own employer, subject to no one’s demands and preferences but your own.
However, freelancers do miss out on one nice aspect of a traditional job, which is that they don’t have the guarantee of a paycheck every two weeks. Instead, they have to collect money from clients themselves in the form of invoices. While many clients pay promptly and in full, the average freelancer has multiple horror stories about invoices that were paid late, not paid in full or that lead to a back-and-forth argument about how much money was due.
When constructing an invoice, you want to express your customer appreciation, which is to say that you want to give the impression that you’re grateful for the client’s business and not just their money. However, you also want to demonstrate that you’re firm in your request that the invoice be paid promptly and within the terms of your initial agreement with the client.
What is the purpose of an invoice?
The purpose of an invoice is to collect money owed for goods or services by a customer or client at the completion of a project. An invoice serves another purpose, too, which is that it creates a paper trail between you and your customers or clients.
Invoicing clients isn’t just about nudging them to pay you for your work, it’s also about formally documenting that you’ve made the request. In the event that your client doesn’t pay and you need to take legal action, the invoice and their subsequent acknowledgement of it can help you in court.
Invoices are also invaluable for both you and your client during tax season in the event that you are audited or need to show documentation that the client either payed you or owes you an outstanding amount.
How do I make a client invoice?
For smaller enterprises, you can draft an invoice yourself fairly easily. Put your company name, address and phone number in the upper right hand corner as you would for any other company document, then title it “invoice for the week of (date)” in a bold font. Underneath the title, list itemized charges if necessary, then include the total. If you so choose, you may include a date by which you expect to receive the funds.
These days, you can even get creative with your client invoices using a design tool like Canva. Canva offers loads of free invoice templates that you can easily customize with your logo, branding, colors and more for a more personal touch.
Larger enterprises should consider outsourcing their invoice needs or using software that drafts invoices automatically. Bookkeeping for large enterprises is complicated enough as it is, so utilizing a third-party recourse for your invoices can be a great way to streamline the process and ensure that your accounting is accurate.
When should I invoice a customer?
Generally, it’s best to invoice a customer before a project is complete, unless you’ve agreed that the payment would be split in two with the first payment to be made halfway through the project. Unless you have this halfway mark agreement, you should wait until you’re completely finished with all associated tasks before asking for money.
Ultimately, this is a question of etiquette. Some people will send the invoice immediately after the project is complete, sometimes even sending it that very day. However, it’s much better in terms of customer service if you wait to receive feedback and ensure that the client is satisfied before sending the invoice.
Here is an example of what a good timeline would look like in terms of requesting an invoice.
Tuesday – Bill has contracted Marcia to design a basic website with a WordPress maintenance plan for his small business. They agreed that Marcia would be paid in full once the project was completed. After four weeks of work, Marcia submits the final project. Bill lets Marcia know that he received it and is reviewing it.
Wednesday – Bill emails Marcia to tell her that he’s largely thrilled with the work she’s done, but has a slight qualm. Marcia knows that it’s a quick fix, so she makes the changes and sends it back to him the same day.
Thursday – Bill emails Marcia with glowing praise, as the finished website is exactly as he envisioned it. Marcia replies to his email with a message letting him know what a pleasure it was to have him as a client over the past month.
Friday – Marcia wanted her message of appreciation to stand on its own, so she waits until the next morning to send him an invoice over email, included as a .pdf file. In the body of the email, she briefly reiterates that he was a great client and informs him that the invoice is attached.
Monday – Marcia wakes up to a digital deposit for the exact amount that she and Bill agreed upon. Although Bill didn’t pay it the same day he received it, Marcia’s great sense of business etiquette informs her that it’s understandable that invoices are often paid the next business day, which meant she had to sit tight over the weekend. Bill’s payment is accompanied by an email telling Marcia that his debt has been settled. She replies with a brief thank you and invites him to tell his associates and friends about her services.
How do you bill a client?
These days, many invoices are sent via email. This is understandable and perfectly acceptable, as the majority of freelance work is done online.
However, there are some instances where traditional mail is the better option. Traditional mail invoices are often used for in-person services rendered, where very little communication has occurred over email. It’s perfectly fine to ask your client how they’d prefer to receive an invoice. However, the majority of clients in today’s business landscape are fine with receiving invoices over email.
The Importance of Client Contracts for Client Invoices
It’s also worth noting that invoices and the details of project payment arrangements can be covered in a solid client contract. During an initial client meeting, you can cover the expectations of payment terms and due dates so the communication of these expectations is clear and straight-foward.
In fact, establishing systems for your web design business is one of the most important first steps a freelancer can take. When you have a solid process for your business, it will boost your confidence and make you more efficient, more productive, and more profitable. This can result in finally being able to charge what you’re worth and keeping problem clients in check.
Better Client Invoices: 10 Tips
Now that we’ve answered some basic client invoice questions, here are 10 must-know tips to keep in mind when it comes to drafting, sending and fulfilling client invoices.
1. Never Email An Invoice As The Body of A Message
In our previous example, Marcia was wise to include a polite message in the body of the email that she sent to Bill, as this demonstrates client appreciation. Furthermore, she was wise to include the invoice as a properly labeled .pdf attachment.
An invoice should always be emailed as an attachment, preferable in a .pdf or .doc format. Remember, this is a formal document that can and will be used for legal, accounting and tax purposes. If you’ve ever tried to print an email, you’ll know how jumbled the text often appears on the page. Ensure that both you and your client can easily print the invoice or file it digitally for bookkeeping purposes.
2. Ensure You’re Sending The Invoice To The Right Person
Marcia sent Bill the invoice because he’s the sole proprietor of a small business. However, if you’re working with a larger organization, the person you communicate with might not be the person in charge of payments. For example, if Marcia is designing a website for a large apparel company, she might be in communication with the person in charge of marketing. This person might be in charge of dealing with the web design, but they do not oversee money changing hands.
It’s a smart idea to ask who you should deal with when it comes time to receive payment at the beginning of a project. It’s fine to send the invoice to your contact at the client’s company with a request that they forward it to the appropriate employee. Otherwise, if you have the email address for the person in charge of payments, you can message them directly and CC your closest contact at the company.
3. Make Sure It’s Clear How You Expect To Be Paid
Many freelancers have been surprised by clients who’ve requested to pay by a paper check, as digital payments are quickly becoming the norm. This is another topic that’s good to clarify when you’re initially agreeing to the terms of your contract with the client.
If you’re realizing that you never agreed on how you’d like to be paid and it’s time to draft the invoice, feel free to request your preferred form of payment in the body of the email when you send the invoice. If you’d like to be paid via a bank deposit, create an additional attachment that contains your account and routing information. You don’t want to put your banking information on the invoice itself, as these documents can be public-facing if included in your client’s tax preparation.
4. Be Patient
Some clients will receive an invoice and pay within the hour. Other clients will wait until the next business day or a few days after. It’s understandable that you might be impatient when it comes to getting paid for a job well done. However, a bit of patience is key.
While it’s wise to be patient, it’s also wise to know when you should stand up for yourself.
5. Don’t Be Too Patient
No one wants to fork over a large sum of money, even when they rightfully owe it to someone. Sometimes clients will procrastinate when it comes to fulfilling their client invoice. Generally speaking, if a client acknowledged the invoice but didn’t send you the funds, send a follow-up email inquiring as to when you’ll receive the money about a week after the initial invoice was sent. If you received no response whatsoever, feel free to follow up three business days after the initial email.
6. Give The Client The Benefit Of The Doubt If They Have Concerns
Sometimes a client will disagree with a specific charge after receiving an invoice. This is especially true if you’re charging them more than what was initially agreed upon due to the project being extended or additional services being requested.
The best way to avoid this is to ensure that you have documentation of the client agreeing to additional fees for additional services rendered. This means that any time a client wants to expand the scope of a project, you email them to inform them that this will raise the amount that they will be billed for and include exact figures.
Many freelancers and clients will be able to amicably settle any disputes about money owed through clear communication. Just because a client might have some concerns doesn’t mean they’re trying to behave unscrupulously or receive services free of charge. Give the client the benefit of the doubt and reply to any concerns with documentation of when they agreed to additional charges or expanded the scope of the project.
7. Understand What’s Needed For The Dreaded Third Email
Although the client who wants to dispute charges might be burdensome, the worst client is the one who seems to have disappeared altogether. Many freelancers know the sinking feeling of realizing that weeks have passed and a client has neglected to fulfill their invoice. It’s a horrible feeling to realize that the client is enjoying the fruits of your labor while you’ve received no compensation in turn.
If two weeks have passed and your client has failed to respond to both your initial request and your polite second email to remind them of their outstanding debt, then it’s time to send the dreaded “third email.” While it’s important that you remain professional, this email should not be about niceties or expressing gratitude for the client’s business.
Instead, professionally but firmly inform them that they have an outstanding debt. Include the initial date that you sent the invoice and include the invoice again as an attachment. Keep this email brief and simple. Although it may be tempting, don’t make threats of legal action or express your displeasure with their behavior. Simply state the facts of the matter and remind them that you expect this debt to be paid.
8. Recognize When You’ve Hit a Brick Wall
If a month has passed and you’ve received no payment, it’s time to accept that you might be dealing with a client who has no intention of paying you. This is also true of clients with whom you’ve gone back and forth over petty discrepancies over the course of several weeks.
As tempting as it might be, keep your emotions in check. You’re only hurting yourself by sending the client an angry email or attempting to sabotage the fruits of any work you completed for them. Instead, accept the situation that you’re in and prepare to take appropriate action. For many, this will involve contacting an attorney or filing a case in small claims court. For an unfortunate few who lack the documentation or the ability to collect on their debt legally, this might mean an unfortunate loss, a lesson learned and a client who you permanently blacklist.
9. Be Careful With Clients Who Pay Late Going Forward
Some clients will drag the process of paying you out for several weeks before they finally make good on their word and pay their outstanding debt. These clients will often end up coming back to you in the future with a new project proposal.
Many freelancers are eager to take any job they can get, as it’s a competitive world and being an independent contractor can be challenging to say the least. However, think long and hard about whether you want to continue a business relationship with a client who delayed the payment process. If the client made collecting your payment difficult the first time, odds are that they’ll behave the exact same way when it comes to collecting payments for future projects.
Don’t be afraid to drop a client who demonstrated that rewarding you for your labor wasn’t a priority for them. While client appreciation is key, contractor appreciation is important as well.
10. Learn As You Go By Improving Your Contracts
Every new freelancer will make the mistake of failing to document the terms of the agreement, only to suffer for it when it comes time to send the client invoice. Although you can study guides like this and master the proper etiquette of invoicing, experience will teach you how to better handle the payment process in a way that is fair to both you and the client.
Furthermore, different rules can apply across different industries. As you continue in your freelance career, you’ll pick up on the unique considerations to keep in mind that apply to your industry specifically.
Being a freelancer or an entrepreneur can carry with it a lot of financial insecurity. Be smart about your invoicing system and always document everything to protect yourself. If you do that, you’ll prevent yourself from mistreatment and ensure that your invoices are paid promptly and in full.
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