Invoicing for Freelancers: How to Send, Receive, and Manage Your Invoices.

As a freelancer, you have to be aware of important things outside of marketing your skill. For example, freelancers need to manage projects masterfully, meet deadlines, and communicate seamlessly across virtual teams. But of all these obligations, the highest priority should always be ensuring positive cash flow. It's this cash flow that gets you through tough economic cycles. You're already worried about month-to-month income fluctuations. A lack of payments can mean the difference between paying your bills and not paying on time. Not getting paid can also affect how you save for investments, taxes, and retirement. While as a freelancer you have to work daily on marketing for a constant flow of work, you also have to perfect your invoicing system to increase and accelerate cash flow. Not sure where to start? Here's how to invoice like a pro.  

Invoicing for freelancers

Following this freelance invoicing guide will speed up payment and potentially attract new clients. Actionable tips on how to send, receive, and manage your freelance invoicing process:  

Sending Invoices

Invoicing systems involving a word processor, printer, envelope, and stamp are archaic. Using one can delay payment by days, weeks, or longer. It's also an inefficient use of time and money. Plus, there's the risk of mistakes being made or the invoice getting lost in the shuffle. Instead, get an online invoicing system for freelance invoices. There are multiple online invoicing tools and platforms that provide efficiency, branding opportunities, and convenience for your clients.   Once you've chosen an invoicing system, follow these best practices:

1. Use a database to store client information so each invoice is automatically populated with that information.
2. Create a formatted invoice using one of the available invoice templates. Make sure it matches your branding, including colors, and provides a way to upload your logo for a more professional look.
3. Number each invoice. This is a good way for both you and your clients to track paid and unpaid invoices.
4. Determine if you need to change the currency, taxation, and language on invoices to accommodate any international clients. Don't forget to check freelance tax rates for each State in our country.
5. Itemize all the services you provided. The more information you can provide, such as date, time, and project work, the easier it is for the client to receive the invoice amount at the same time.
6. Outline your accepted payment methods and payment terms, including any fees or discounts related to the due date and payment timing.
7. Always include a note of appreciation for the work and the relationship. Be sure to change these every month to provide that personal touch. Clients want to know you value them.

 

Receiving Invoices

How your clients receive the invoice is also crucial for fast payment. You're moving to an online invoicing system. Now you can offer your clients a few ways to receive their invoices according to their preference. You may also need to explain how online invoicing works and why it will be beneficial. Sending your invoice via email is one of the most popular methods. This method includes a button in the email correspondence that the client can click to review the invoice and make payment. With this invoice receipt method, you can get paid immediately, since it's something your client can do in just a few minutes. Also, consider accommodating preferences for receiving invoices via text message or through a link sent via instant messaging. Make sure to ask each of your clients how they prefer to receive your invoice. Then, follow up so you can deliver it that way every month. Write down this preference tracking information somewhere. When you have a large client list, it can get confusing (seriously, some clients request unusual invoicing practices). If your clients receive regular invoices for the same amount as if you were on retainer, use the recurring invoice function. It saves additional time and "trains" your clients to expect their invoices on the same day each month.  

Managing Invoices

While you'd like to be able to fully automate the entire invoicing process for your freelance business, the reality is you have to manage the process. This is where your online invoicing system can help too. Here are some management tips to remember to stay on top of your invoices:

1. Update changes in client information. This includes adding new contacts to be included on the invoice. Staying current with this information will ensure your invoice reaches the right people and that payment is therefore not delayed.
2. Set up automatic reminders for outstanding invoices to encourage payment if a certain day has passed.
3. Develop an automatic thank-you email when a client makes a payment. If you prefer, you may want to send your acknowledgment via email or any instant messaging system you use, like Slack.
4. Set up a system for short-term or long-term projects. With this system, also include an attached contract form for your client.
5. Use the numbering system to help a client locate their invoice or to look up the number, so you can answer a question or concern.
6. Track your cash flow using available reporting capabilities to see how much you've collected, what's still outstanding, and what your total income is by month, quarter, and year. Tracking these amounts is important because you can compare your productivity to your need or availability for more work.
7. Evaluate your options for integrating more accepted payment methods into your invoicing system. The more payment options you offer, the better your chances of attracting more clients. Not every client wants to pay the same way, so be sure to add a payment processing partner that works with your online invoicing system. Find a partner that can offer payments via bank and credit cards, ACH/e-checks, and email-based peer-to-peer payment tools. If your clients like this alternative payment method, perhaps you're ready to accept cryptocurrency.

 

Business and Cash Flow

Make sure to include your invoicing and payment methods in your marketing approaches. You can use this updated process as leverage to differentiate yourself from other freelancers. As a freelancer, you might also want to mention that you can teach your new client how to use this payment system. If your new client is still using old-fashioned invoice and payment systems, you can accommodate them with these time-saving cuts. However, try to convert both to the other system as quickly as possible for your benefit. Forward-thinking clients may choose you over other freelancers because they accommodate updated invoicing and payment systems. Your payment partners and these changes are free or low-cost. Plus, easy-to-implement processes get you up and running in minutes with a whole new way to work, invoice, and get paid.