5 Steps to Create Better Invoices

There’s a lot we don’t know. But, as freelancers and small business owners, we often hold ourselves back when it comes to asking the important questions – especially we perceive those questions as being “too simple” or feel that asking would make us appear “unprofessional” to those in the know.

Questions like: “How do I create an invoice?”

For many of us, invoicing our clients is a rite of passage. It typically marks the first time we’ve officially demanded money for services we’ve rendered. It’s the part of the freelancing process where we finally put the promises laid out in our contracts to the test. However, like contracts, many of us don’t know what an invoice is supposed to look like when we’re just starting out – and it can be embarrassing to ask.

Never fear. Invoices are nothing to be intimidated by. Though the most common mistakes also tend to be the simplest. Just remember these five steps and you should be fine:

Step One: Know Who/Where You’re Sending the Invoice To

The person you’ve been chatting with throughout the project isn’t necessarily the person you’re going to send your invoice to. Particularly if you’ve been working with a larger company.

As a general rule: the larger the business, the more departments you’ll have to deal with. Even if you’ve been working directly with “the boss”, you may still end up having to send your invoice to the “accounting department.”

Thanks to the extra steps involved in working with a larger company, wait times for final payments tend to be longer. Don’t make that wait time longer than it has to be – send your invoice to the right department on the first try.

Even if you’re working with an individual like yourself, make sure you send your invoice to the appropriate address. Even if you and your client decide to handle all your business completely online, double-check that they don’t have a separate billing (e-mail) address.

Step Two: Show Where/How to Contact You

Your client’s address isn’t the only address that matters – they need to know where and how to contact you as well. Make sure your invoice includes your contact information.

If you have a brand logo or professional header, now’s the time to bust it out. Even if you’re creating your invoice on your own, taking that extra step to make it look like it was written on letterhead can go a long way toward gaining your client’s ever-lasting respect. (This applies to both hard copies and e-copies – just because an invoice isn’t “tangible” doesn’t mean it can’t have professional flair).

Step Three: The Big Picture Details

There are a few basic details that every invoice should include. Things like:

  • The Invoice Number. This is “optional,” but highly recommended; especially if you’re going to be working with this client on a long-term basis. Invoice numbers are used for organizational purposes on both sides. If there’s a mix-up, you’ll be able to point to exactly which invoice is behind your troubles.
  • The Services Rendered. Just a simple reminder of what you did for the client, whether it was “website copy” or “logo design.” You don’t have to get too detailed – the exact specifics of the project should have been outlined in your initial contract – but you should say just enough so as there’s no confusion as to what you did for them. Include not only the service, but, if applicable, the quantity provided or number of hours worked.
  • How Much They Owe You. Whether you choose to itemize your invoice or not is up to you, but make sure you get the final total on there.
  • Your Payment Deadline. You’re a reasonable person and you’re probably willing to wait a little while to get paid… but not forever. Let them know exactly when you expect to be paid by.

Step Four: The Nitty-Gritty Details

For the most part, you’ll want to keep your invoice clean and simple. Focus on the “big picture” details listed above and keep your invoice free of unneeded clutter.

However, for new clients or suspected “trouble” clients, you might want to add in a few extra details – even if they already appear on your contract. For instance, you may want to include additional details in regard to your payment terms such as your refund policy, bounced check policy, or what actions could incur a fee (late payments, etc.).

You may also need to include additional details in regard to the services you’ve performed. If you went beyond what was outlined in your initial contract and performed extra services or worked additional hours, your client may need a reminder. You don’t want to be put in a position where your client thinks you’re adding on extra charges “out of the blue.”

Step Five: Get Paid

Make it as easy as possible for clients to pay you. The more options you give them, the easier it will be for them to follow through on paying you.

In addition to stating how much you’re to be paid and when you expect to be paid (your payment due date), let your clients know what methods can be used to pay you – including your “preferred” method. Personally, I like to use PayPal. In addition to being able to take payments from other PayPal accounts, PayPal also accepts credit card payments from non-users; essentially becoming two payment methods in one.

If online/e-payments aren’t your bag, other payment methods to consider include:

  • Cash
  • Checks
  • Money Orders
  • Credit or Debit Cards
  • Direct Deposits

The more options you have for getting paid, the more likely you will be paid. You’ll also be opening yourself up to customers who might have otherwise dismissed your services.

Striking up a trade is also a valid payment method. If you’d like to build a budding inventor’s website in exchange for stock in their business, that’s up to you. However, with bartering (of goods or services), you’ll have to keep especially careful track of who owes what. Since equating the value of services vs. goods (or vs. a completely different type of service) can be difficult – how many apples is a page of writing worth? – I wouldn’t recommend this method. However, if you and your client would mutually benefit from a trade, then it’s something to be considered (just make sure you clearly define both of your terms in either your initial contract or your final invoice).

Still Need Help?

So long as you continue to put your best/professional foot forward – as I’m sure you do with every aspect of your business! – you should be fine. Creating an invoice shouldn’t be a frightening experience, even if it’s your first time.

However, if you still need help, or if you’d like the process to be a little less hands-on, I’d recommend you invest in an invoicing program or tool, like Quaderno.

Whether you’re a veteran freelancer or a newbie, there’s no reason for you to not get paid what you what you’ve earned.