The most important thing about starting a business is getting paid.
You probably have figured out that in order to get paid as a freelancer or service based business you will need to send your client an invoice in order to get paid.
Today I am going to talk about two different options that I have used in my business for invoicing clients, Word Documents and Quickbooks Invoicing System.
Word Document Invoices
When I first started invoicing my clients I used a Basic Word Documents and designed it to suit my needs. I didn’t need an elaborate invoicing system and I didn’t have the funds for it. Using Word Document Invoices worked well for me while starting out because I didn’t have a huge amount of clients to send invoices to or the funds for a fancy accounting system.
Over time it did become a problem because I was sending more invoices and it became a little hard to track what invoice belonged to who and what was paid and what wasn’t. I then switched over to Quickbooks.
Handy Tip: Create a second folder on your computer named Paid so you can file all of your paid invoices away.
Using An Invoicing System
You need to have a system in place for billing your customers, yes it was good starting out using Word Documents but 50 files later it all started getting a little confusing. Since then I have moved onto an accounting system called Quickbooks.
Using an accounting system has allowed me to enter bills, record expenses, create quotes, invoice clients, record payments etc. a lot easier and faster. It has also made it a lot easier when it comes to Tax Time too. I just do a backup of my business file and send it off to my account.
What Should Be Included In Your Invoice?
This really depends on the service you are providing for your client.
I provide website packages, website updates (at my hourly rate), and recurring hosting/maintenance packages.
For each of these services, I use a different template with different information on it.
The general details that you should include are:
- Your Businesses details (Name, Email Address, ABN)
- The document should be titled as an Invoice
- Your clients details (Name, Email Address)
- The date of the Invoice
- A unique invoice number so you can reference what invoice is sent/paid etc.
- The payment terms, the invoice due date
- The description of the task/project offered
- The total amount to be paid by the client
- Your bank details
If you are invoicing by the hour you should include:
- The breakdown of your hours
- The total time spent on the task
- The date the task was done
What To Do If The Client Refuses To Pay?
Once in a while, you might come across a difficult client that doesn’t want to pay you for your services. This is when a contract becomes very important. Ensure that your client has signed your contract before you start working for them.
Since most of my work is website design packages, I require a 50% deposit and a signed contract before starting work and the final 50% on completion before handing the final files over. This secures the clients position in my waitlist and they can’t just flee mid-project. I have had no issues using this method and highly recommend others to do it as well.
If you have contacted your client about the outstanding payment and they still refuse to pay, you can seek legal action but this might cost you more than the money the client owes you.
- Pick a good invoicing system that will help you keep track of what is owed to you by your clients.
- You do not need a fancy invoicing system especially when you are starting out. A basic Word Doc will work fine.
- Make sure you charge your worth.
- Always outline the work you have done, the total amount you expect to be paid and the terms under which you need to get paid.