Freelance Business – Creating an invoice isn’t easy for anyone. But it can often be more difficult as a freelancer, considering you’re in charge of all the invoice data. According to Sharespace, “39% of all invoices sent in the US are paid late, and 61% of late payments are due to incorrect invoices.” It’s a startling statistic that shows just how critical it is to have a good invoicing process.
And if you’re not working with an accounting system, it’s important to learn all the relevant data to create a system that works for your freelance business.
Why create an invoice system? Freelancers have to juggle a lot of tasks, and manual data entry can take up hours of time. The worst part? You’re not getting paid for any of the time invested in invoicing. That’s why it’s important to create an invoice system that can save you both time and money.
So, if you feel you’ve been wasting time on data entry, take a step back. It’s time to figure out which invoicing system will benefit your time and business the most.
Table of Contents
Know What Needs to Be Covered
The most important aspect of invoicing is to know exactly what needs coverage. This is a process that should start at the beginning of your contract. The following points should be covered throughout all invoice processing:
Review the Contract
Before beginning any work with clients, both parties should sign a freelancer agreement. Most likely, this will be some sort of contract. This contract should lay out the details of what’s expected of you for the project.
The way clients process payments relies heavily on the terms expressed in a contract. So, before sending an invoice, freelancers should check that they fulfilled all agreed-upon terms. Make sure that you have:
- Met the deadline
- Outlined the payment methods and pricing
- Agreed upon a payment timeline
Stand Out Among Others
In some cases, clients have many freelancers that they’re working with. And when clients get busy, invoices can easily be pushed aside. This often happens when a client isn’t sure which project an invoice belongs to. The following can help your invoices stand out:
- A clearly labeled logo or company name
- Include the date the project was assigned
- Include the due date
- Provide clear contact details
Accept Multiple Payment Methods
Accepting more than one payment method will help incoming invoices be processed promptly. However, it can be challenging to do this initially if you don’t have a strong solution in place. That’s why the best solution is to find an invoice tool to help with this. Along with payment processing, invoicing tools can help you manage multiple invoices at once.
Creating an Invoice
Every business processes invoices and payments a little bit differently. Using:
- Manual data entry
- Invoice processing software
The way freelancers process invoices is totally up to one’s own discretion. In the case of manual processes, coming up with the right template is the most important aspect. Then all you have to do is plug in the data manually for each project completed.
There are various free platforms where invoices can be created and edited. These sites provide different templates that can be custom-made, and they specialize for small companies or for freelancing.
Creating an Invoice Receipt
Don’t forget that creating or receiving an invoice receipt is just as important for your records as sending the invoice. Create and keep any invoice receipt in a document that can be accessed or shared at any time (this is important for audit purposes.).
Once approved invoices are paid, create an invoice receipt immediately. When creating an invoice receipt, you can simply change the due date on the original invoice to the transaction date. This is essentially the date that the payment was received.
Make the Entire Process Easier & Get Paid Faster
Freelance Business – Getting paid is a great feeling, no matter the job. And getting paid quickly and in a timely manner is even better. If you’ve been struggling to get paid but can’t figure out why, we’re here to help. There are various reasons that clients may take a bit longer to process invoices. One advanced approach to expedite the payment process involves extracting data from invoices through specialized software. This automated method identifies and collates essential invoice details, helping both you and your clients streamline payment procedures and reduce delays.
Follow these steps to make sure your payment is processed and received on time.
Check Your Payment Terms
Payment terms are essential for determining how long it will take to receive payment. In most cases, freelancers take the net 30 route, which gives your employer or client 30 days to pay the invoice. You could certainly change this to net 15 if you wanted the invoice paid within 15 days.
Another angle to go would be to get paid immediately upon receipt. This would get your invoice approved much quicker. It depends on the client and how they accept and process invoices. Depending on the freelance work that is done, there are various payment terms that can be used, including:
- Net 30
- Net 15
- Net 7
- Charges for late payments
Freelance Business – Some freelancers offer early payment discounts, which is a good incentive for clients. Here’s an example:
Suppose you’ve decided to go with a net 30 payment term system. Then offering a discount when paid early would be very appealing to clients and can help you get paid quicker. For instance, if the client pays within ten days rather than the 30, they might receive something like 10% off the bill. While you won’t be paid as much, it can reduce the wait time.
Don’t forget that it’s your time and money, and freelancers have the right to be in charge of their payments.
Automated Payment Reminders
In the world of automated processes, sending reminders isn’t a problem! Most automated workflow systems will have the option of sending automatic reminders. If you don’t have access to this software, follow up manually with an email or even a phone call.
Most of the time, clients receive the invoice and say something to the effect of “I’ll get to that later.” As with most of us, they never quite make it there. In these cases, sending a simple, kind reminder is the best way to go about getting your invoice paid. It also helps keep a positive relationship with the client.
Try Online Invoice Processing Systems
Freelance Business – Working with a new automated system isn’t as intimidating as it might sound. With automated invoice processing, freelancers can quickly send electronic invoices, keep all invoice management in one place, and save on the time it takes to create one.
Automated workflows are becoming more and more popular, and you have plenty of options out there. Here are three to get you started:
Indy gives freelancers an easy-to-use invoice system to manage and send multiple invoices quickly with ready-made templates. You can set up both manual or recurring invoices and accept various payment methods, including:
Indy offers a free version that lets you send two invoices a month, or you can send unlimited invoices for $9/month and get access to Indy’s eight other productivity tools.
Freelance Business – Wave is a free invoicing platform that offers accounting systems for any freelancer. The automation software allows freelancers to send invoices and receive invoice payments. Invoice process automation makes creating, sending, and receiving payments much quicker and easier.
Wave provides invoice automation software for free to freelancers everywhere. If you’re looking for payroll administration services, there are fees attached. The cost is between $20–$30 plus an extra fee per employee on the payroll.
FreshBooks, an up-and-coming platform, is another viable option for freelancers looking to automate invoice processing. It will benefit the accounting department—even the smallest, like that of a freelancer.
FreshBooks offers a specific version for freelancers. This version includes unlimited invoice processing for up to five billable clients and costs $15/month.
For freelancers who have more than five billable clients (congrats!), you can opt for the Plus version, which provides invoice processing for up to 50 billable clients and costs $30/month.
Now It’s Your Turn
Freelance Business – There’s no doubt that invoice automation will help you send invoices faster. But it also means you can skip over the tough parts, like sending awkward follow-up emails or manually keeping track of vendor invoices.
The key aspects of invoice data are:
Receiving payments on time
Keeping track of invoices and payments
The key is to find the right automated invoice processing system for you. Time management is a huge part of freelancing. Don’t fall behind due to poor management of invoices. There are tons of processing systems out there to provide support. These systems will help you quickly create a great invoicing schedule.
Author Bio: Brandt Sohn is a copywriter for Indy, a project management software that helps freelancers organize and manage their businesses. In his free time, he writes articles to pass on his knowledge and first-hand experiences from freelancing.
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