As a freelancer, you specialize in a certain service offering to the world. Be it graphic design, virtual assistance, or dog-walking—the skill doesn’t matter. What’s great is that you get to offer your top skill and get paid for it. But you can’t do it without knowing the ins-and-outs of freelancer invoicing.
Getting paid to work on your schedule sounds amazing, right? But it isn’t all rainbows and butterflies.
Work can get busy and clients can be tough and demanding. What’s worse is if you don’t understand invoicing, your cash flow will take a big hit, too.
In this guide, we’ll be covering:
- Why freelance invoicing is the heart of your hustle
- How to approach freelancer invoicing
- Freelancer invoicing tips
- Roundup: let’s get paid!
Freelance invoicing is the heart of your hustle
It doesn’t matter if freelancing is your full-time or part-time hustle. Even if your shoehorn is selling like mad on Amazon, it won’t matter. What matters is that you know your cash flow. Looking at (and really understanding) all of the numbers that make up your business relies on staying on top of all your invoices and financial documents. Keeping them organized is essentially the building block for any successful business—and it doesn’t hurt that it helps you tackle tax season (and reduce taxes, too).
Cash inflow is the lifeblood of your business, and good freelancer invoicing habits are what keeps it pumping.
If invoicing is the heart of your business, then bad habits can ruin it. Seriously, invoicing is THAT important!
How to approach freelancer invoicing
Step 1: Do the research and startup work
Are you new to freelancer invoicing? If so, then it’s crucial that you put in the work to get up to speed.
- How much are other freelancers charging in your area?
- On average, how much do freelancers charge for your type of work?
- How much are your services and/or products worth?
For example, a quick Google search will tell you that virtual assistants make somewhere between $19-30 per hour in Vancouver. In British Columbia, virtual assistants make on average $20.65 per hour. As a freelance virtual assistant, you should charge your hourly rate somewhere within that price range. If you have 4+ years of relevant experience, then you should charge over the average!
Be sure to factor in years of experience, proven experience, and the local landscape. But ultimately, you should always know your worth. After all, you want to know how much to charge when you tackle your invoices. Not too little, but not too much—finding the sweet spot is key!
Step 2: Figure out how you want to bill (and stick to it)
It goes without saying that you need to bill your clients consistently. Not only does it help boost cash flow, but it sets the standard for how you want your clients to reciprocate.
Establish policies for methods and timelines when it comes to billing. These include:
Method. Which payment method does your client prefer? Is there a method that you prefer, such as through a bank transfer? Do you plan to charge hourly or a fixed-price upon project completion? Will you require a 50% deposit prior to starting work?
Timeline. When should payments be made? Use the project kickoff to initiate conversations about payment timelines and expectations. Get on the same page early, such as payments within 10 days (net-10), so that expectations are established right away.
If you have more than one client, things might get a little trickier since one client’s payment method may differ from the next. Be sure to stay flexible and adaptable throughout this process! Trust us, your clients will appreciate it.
Step 3: Set up your invoicing processes
Next up, you’ll want to set up repeatable, scalable processes that help you get paid on time. Creating a system that you trust to create invoices and to keep a paper trail is key.
TrulySmall™ Invoices is TrulySmall’s first product aimed at helping the truly small business owners create a system that works for them. Whether it’s access to a plethora of free invoice templates for your niche, or the ability to create professional invoices in a few mouse clicks—the option is entirely up to you. We’re here so that you can lean on us as you grow your business!
Step 4: Create your invoice!
While there is no exact format to set up your freelancer invoice, there is a standard skeleton that you should follow. Why start fresh, when you can start from a pre-built invoice template?
To lay the proper groundwork for your freelancer invoicing, here’s what to include on your invoices every time to get paid quickly:
1. Business name and info
Your business name is a foundational element of a professional invoice. It identifies your business and establishes your brand.
A unique invoice numbering system helps you stay organized, especially come tax season.
3. Date of invoice
Date of when the invoice was generated and not when the goods were supplied.
4. Payment terms
Any terms or other contractual descriptions you would like to include.
5. Qty/hrs worked
The number of hours worked or quantity of services provided.
6. Bill to (client information)
Your client’s information including their full billing address.
7. Flat fee or hourly rate
The amount you’re charging per hour or for a specific service.
Any other fees or taxes that you may charge on your invoice.
9. Total, including sales tax
The total amount of your invoice after any sales tax, discounts, etc.
Freelancer invoicing tips
Freelancer invoicing tip #1: Lean on tools to do things faster
As a freelancer, you’re on your own. Unlike employees, you don’t have a set income (unless you’re on a retainer) and the support of legal counsel. Every day you need to run all aspects of your business by yourself. Because invoicing is, quite literally, the heart of your operations, you should lean on tools to streamline your workflow.
Cloud-based accounting software or invoicing tools are a life-saver. Rather than creating invoices from scratch using Word or Google Doc, why not use free apps that generate, and pre-fill invoice details for you?
TrulySmall™ Invoices, for example, lets you easily fill out your invoice including contact details, line items, and fees. You can also add your freelance business logo to stay on brand and add extra notes that you want your client to see.
The best part? (There isn’t one—there’s a few!)
- Invoice number and date created is auto-generated for you, which saves you time
- Prompts to remind you to finalize the payment schedule (i.e. pay on receipt, next day, 15 days, or more), so that you actually get paid on time
- As soon as you use TrulySmall™ Invoices once, it will learn your details and pre-fill them for your next recurring invoice, which makes invoicing less of a hassle
- TrulySmall™ Invoices auto-sends a reminder to your client that the invoice is outstanding after two days from invoice date, so that you don’t have to do it yourself
By trusting invoicing tools to get the job done, you can rest easy and re-focus your attention on other parts of your business, like making a profit or creating new products!
Freelancer invoicing tip #2: Create filing systems to stay organized
Invoices add up over time and can get disheveled if not properly tracked and managed. Create folders and subfolders for each client and be sure to label each invoice with the current invoice number and date.
Each invoice should have an invoice number to refer to for easy tracking purposes. Something like this should work fine:
Invoice 001 Truly Small 31-03-21
By creating a filing system with consistent naming conventions, it will become a whole lot easier to file your tax return come tax season.
Invoicing apps like TrulySmall™ Invoices pre-fills the Invoice Number and Invoice Date for you as soon as you create a new invoice. Instead of manually typing your naming/filing convention, let automation do it for you.
Roundup: Let’s get paid!
Invoicing doesn’t have to be a hassle. In fact, it can be an enjoyable process—so long as you set up the right systems, lean on tools where it makes sense, and solidify good invoicing habits from the outset.
Interested in a simpler invoicing solution? Join other truly small businesses today by sending your first invoice in TrulySmall™ Invoices. It’s free and available on iOS, Android, and web-app.