For many people, freelancing allows them to do what they love. Whether this is your side hustle or a full-time job, freelance work offers flexibility and control over all aspects of your business. From being a freelance writer to an IT specialist, the opportunities are endless.
Of course, being your own boss also comes with many responsibilities. This includes finding clients, keeping up with deadlines, and tracking invoicing and payment processing for products or services. To help new freelancers who might be unsure how to set up a payment system for clients, this article will explain the process simply and show you what to include on the invoices you send to clients. An invoice from Skynova not only looks professional but can also help you stay organized and get paid faster.
How Do Freelancers Get Paid?
Just about every freelance project goes through four steps:
- Establish a set price or rate for the work with the client. This might be through a quote or an estimate. You may even agree to a retainer with the client.
- Conduct the work for the client.
- Send an invoice for the completed work to the client.
- Client pays for the work through specified payment options.
Although this seems easy enough, a lot of freelancers say collecting payment is one of the hardest aspects of running their small business. Establishing a billing process is crucial to monitor cash flow. Let's go through the steps one by one:
- Establish a set price or rate in advance for every freelance job you do. This will help your clients avoid confusion or a misunderstanding later on. Some projects require a retainer for service. Include this information when defining payment terms for your freelance business. Regarding the value of your time and work, it's important to be upfront about your fees so that there are no surprises later on.
- When conducting the work, be mindful of deadlines and establish a schedule to balance multiple projects. For longer projects, check in with the client and offer a progress update. Clients will appreciate you keeping them informed. Don't forget to pencil in some downtime for yourself, as well.
- Once the project is complete, submit and send an invoice for the work. Include all the information about the project, including your name, a description of the project, fees, and the total cost. We'll go into more detail about that in the next step.
- Lastly, the client will pay you for your work. This could be through an online payment platform, such as a PayPal account, but could also be in the form of a paper check, bank transfer, cash, or credit or debit card payment. This is the part that can get tricky. It's important to provide expectations about payment for products or services. Upfront communication is helpful, but also be sure to include this information on your invoice as a friendly reminder (especially for new clients who may not be aware of the different ways to submit payment).
What to Include on Your Freelance Invoice
When submitting an invoice to a client, it's important that you include all necessary information regarding who did the work, a description of the deliverables, the total cost, any discounts, and payment terms and options. A complete invoice shows professionalism, defines all aspects of the project, and sets the payment expectation for the freelance job.
To help you create a comprehensive invoice, Skynova offers an invoice template that you can personalize for each project you take on. The following sections will show what to include on an invoice when requesting payment as a freelancer.
You want to make sure you include your information at the top of the invoice. Clients likely have several vendors and contract workers. Clearly identifying who the invoice is from helps prevent the client from simply throwing it in the trash and helps them make payments in a timely manner. The Skynova invoice template has a convenient place for you to include this information on the top left.
When formatting your information, include your business name if you have one, your personal name, and your contact information, such as your address, phone number, website address, and email. If your business has a logo, you can easily upload it to the Skynova template. Just click "Show Customization Options" and check the "Logo" box. The template will then show a place to upload your small business logo at the top right.
You'll also want to make sure you include your client's information, including their name, address, and any other ways to contact them. Just make sure this information is accurate, as inaccurate information looks extremely unprofessional and may result in the client dismissing the invoice.
On the Skynova invoice template, you can input your client's information right underneath your own.
Invoice Number and Date
When creating an invoice, it's important to have a unique invoice number that you and your client can easily reference, whether you're using Skynova's accounting software or another software program. Thankfully, this is done automatically when using Skynova's invoice template. All you need to do is create one unique invoice number and Skynova's system will automatically increment from the previous invoice. This prevents duplicate invoices.
You'll also want to include the date you submitted the invoice. This is helpful to the client, as you may set your payment terms up to 30 days from that date. Even if you don't quite finish the invoice and have to submit it the following day, Skynova's system allows you to easily update the invoice date.
With the Skynova invoice template, you can enter the product or service performed in a matter of clicks. All you need to do is click the drop-down menu under "Item" and click "Product" or "Service." Two item lines are provided on the template. If you need more, simply click "+ New Line" and add as many items as you need. If you only have one product or service, you can remove additional lines by selecting the "X" button to the left of the "Item" box. Be sure to include all expenses for the project.
Description of the Product or Service
Here, you'll want to use descriptive, concise wording to describe the freelancing work provided. The Skynova invoice template has dedicated space for this under "Description."
For example, if you do freelance work as a photographer, your description of service may look like, "Senior Portrait Session" or "Engagement Photo Session." Include other products or services associated with the project. This can include high-quality prints, digital albums, cloud storage, props, and travel costs. Add a line for each product or service.
If your industry has unfamiliar terms, explain in the description line if space allows or add an explanation of the terminology in the "Notes" section to avoid any confusion.
The unit cost is an important component of your invoice. It's the agreed-upon fee for the freelancing work and breaks down the cost visually for the client. With the Skynova invoice template, you can input the price under the "Unit Price."
The quantity is the number of products or services. This could be a lump sum, such as a single portrait session or the total words written for a website landing page. Documenting the quantity allows you to calculate the final cost of the work. On the Skynova invoice template, you can input the amount under "Quantity."
The total amount of a product or service is automatically calculated with the Skynova invoice template. This amount appears in the last column of each item line. For example, if you're a freelance writer, you might charge 10 cents per word for a 1,000-word article. With the invoice template, you'd enter "0.10" under "Unit Price" and "1,000" under "Quantity." The invoice will automatically calculate $100 under "Amount." It will also show up beside "Subtotal."
To attract business, you may want to offer discounts or specials. If you do, you'll need to make sure they are reflected in your invoices. Thankfully, Skynova's invoice template makes it easy by including a "Discount" option in the "Item" drop-down menu. Under "Description," describe the type of discount applied, such as "New customer" or "Customer referral" and make sure to enter the unit price and quantity. The Skynova system automatically changes the number to a negative and shows it underneath the subtotal.
While it may seem obvious how to pay, it's not always clear to clients. By including payment methods and options, you are letting clients know exactly how to pay you.
Include your payment options, such as credit card payments if you have that capability, paper check, cash, or a payment gateway like PayPal. Other payment methods link directly to your bank account, such as direct deposit and wire transfers. Explore options that work best for you. You can include your preferred payment methods in the "Notes" section of the Skynova invoice template.
Depending on the type of work provided, you may have arranged a payment schedule with the client or have certain payment terms, such as Net30 - where the client is expected to pay within 30 days of receipt of the invoice. Generally, invoices are due within seven, 15, or 30 days.
You can use the "Notes" section of Skynova's invoice template to define your payment terms, including if there are any fees attached to late payments and whether the client can expect payment reminders after a certain time. Just be sure to enter the due date on the upper right of the invoice. You can enter this date manually or click the calendar inside the "Due Date" box.
Easily Create Professional Invoices With Skynova
Skynova offers innovative invoicing software that helps freelancers easily create professional invoices. Created online, there are no templates to download and you can bill anytime and anywhere. Skynova's features are designed with the freelance business in mind.
Skynova's rapid online invoice helps you get paid faster. Paper invoices take days and sometimes a week to arrive. With Synova, your client has access as soon as you send it.
With a variety of industry-specific templates to choose from, Skynova can help you create professional invoices that will help you get paid faster.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a tax professional for specific advice regarding bookkeeping and accounting for your freelance business.