November 3, 2011

How to get paid: invoicing practices for freelancers


As a freelancer, you may encounter clients who prefer to pay you as soon as the job is done, in cash, and receive an invoice afterwards. However, like a warm day in winter, they are few and far between. That’s why I have compiled a list of dos and dont's when it comes to standardizing your invoicing practices so that you get paid in a timely manner, and have a plan if you don’t.

1) From the actual invoice template to the day you send it out, standardize your templates and number them so that you can track the invoice # and correlate it to the day that you sent it out. This helps you keep track of how late you are getting paid, which may go against your collection agreement with the client.

2) Present a professional invoice. Sending a lack of information that your client may need to investigate to write you a cheque will probably result in you not getting paid as quickly as if the information was presented in a clear way.

Invoices should include: 



The date

A unique reference number

Your name and contact information

The client’s name and contact information

A description of services or products, usually broken down into specific charges

The date the project was delivered

The total amount charged

The acceptable methods of payment

The payment’s due date and information re: late fees


3) Set individual collection agreements with clients. They may need 90 days to turn around and have something approved and sent out, so be prepared to include that on the invoice and include interest percentages that will occur past the due date. Others are easily able to issue you a cheque or pay with cash within two weeks and 30 days, and the terms of these agreements should be discussed prior to sending the first invoice by presenting the client with a quote and some terms of what you would expect from the client at the first or second meeting.

4) Be explicitly clear on when you invoiced them, and if they require hours and days worked on a project, make sure you have taken record of these dates and included them on the invoice. Some clients like to know exactly what you are billing them for and will question you on what you were doing on a particular date, so try and take pre-emptive measures by including them on the first draft.

5) Resolve invoicing issues quickly. The longer an invoice takes to get paid, the less likely you will be to be able to provide details on a project (unless you have been recording time sheets every-time you work on something). If the client is waiting on an answer from you to issue a cheque regarding an invoice in arrears, waive the late fee that may have occurred as a result of your tardiness. If you are continuously waiving these fees for a client (or charging a client for them), request a meeting with them and have a discussion regarding the terms of your collection agreement and see how you are able to resolve the issue.

6) Recognize your organizational strengths. Do not attempt to undertake an excel spreadsheet containing all your invoicing information if you don’t have any experience working in the program. Rather, choose a system that works for you to keep it updated; which may be as simple as a hard copy record book. However, try and back up your information so that if your book goes missing or if a file gets deleted, you have a second location where your invoicing information will be safe.

7) In your invoice record keeping sheets, record the

businesses’ name,

the contact name at the company (and information),

the date the invoice was sent,

the amount the invoice was sent for,

the dates that the invoice was referring to (if you work on an hourly/daily basis) or the project you were working on.


If you are doing a written project or a project on your computer, make a folder for that project and keep all of your correspondence and invoices saved. The same goes for a hard copy, so you won’t have to sift through your emails and see when you sent them an invoice, then go through your computer and try and locate the file on the computer. Saving your invoices is critical, make sure you date them, put your name and the companies’ name and/or project name. This ensures the file is professional when being sent to a client, and is easier for your record keeping if all of your invoices are standardized.


Resources:


Online programs- subscription based

www.freshbooks.com
http://getcashboard.com/
www.blinksale.com
http://InvoiceMachine.com/


Downloadable software (between $40-$60)


Billings 3 (Mac)
On the Job
iBiz 4



Invoices examples: http://www.smashingmagazine.com/2009/11/05/invoice-like-a-pro/

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