I've had so many questions about invoicing lately! I think it's a process that many freelancers worry about as it's the step before payment, so it's important to get it right.
So here's a guide to show you how to create your invoices, what you need to include in them and why they're so important.
How to create an invoice
Most business owners create their invoices as a spreadsheet, as the separate cells make it look cleaner and they make it easy to customise your invoices to match your brand.
Branded invoices look really polished and professional.
There are a few ways to brand your invoices. I would recommend including your business logo and using the same fonts and colours you use on your website.
Remember to make sure that once you've done this, your invoice is still easy to read. Simple, dark fonts on pale backgrounds tend to work best.
If you use accounting software, you will usually be able to generate invoices through this. However, you may be limited in how much you can customise and brand them.
What to include in your invoice
There are a few things you need to include in your business invoices:
Your business name, address and contact details (e.g. email address, website, phone number)
Your client's name and address
An invoice number
The date of the invoice
The date payment is due
A description of each product or service you've provided and the amount you're charging for each one
The total amount of money due
Your bank details including account name, number and sort code (and PayPal info if that's how you receive payment)
If you are registered for VAT, you will need to include your VAT registration number and the amount of VAT charged on each product/service you have provided as well as the total amount of VAT charged
If your business is incorporated (e.g. a limited company or partnership), you will also need to include your incorporated business name, incorporation number, where your business is incorporated (e.g. England and Wales) and your registered office address
Why it's important to get your invoices right
Obvious reason first; put the wrong numbers or bank details on your invoice and you ain't getting paid. That's why it's so important to double and then triple check your invoices before sending them.
Second, both yourself and your clients need to keep your invoices for their records. If the information on them is incorrect, your bookkeeping may be incorrect and if HMRC decides to ask for your records and the numbers are incorrect, they may issue a penalty.
Finally, invoices are an extension of your business. If they have mistakes on them, clients aren't going to get the impression that you're a professional who takes care with their work. If you don't look like a professional business, they're less likely to prioritise your invoice and pay you quickly.
On a more shallow note, this carries over to my point earlier about branding your invoices. Getting the right info on them is the most important thing, yes. But an invoice which reflects the feel of your business can be really helpful, particularly if you run a creative business where you're designing things to be aesthetically pleasing and focusing on the details - adding that attention to detail right down to your invoices really can make a big difference to how your business is perceived by clients.
Once you're happy with your invoice, make sure to save it as a PDF (so it can't be edited) and send it to your client promptly. I'd suggest sending it as soon as your work is complete.
If you need help with invoicing, you may want to join my new course, Easy Numbers.
It's made up of four modules and is all about making the numbers side of your business, like tax and bookkeeping, easy to understand and deal with correctly.
There's even a whole module about invoicing, writing client contracts and prepping your business for payment.
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