You've handed in a piece of freelance work – the next step is getting paid. If you're not sure about how to create an invoice, worry not: here's Scott Bryan's guide...
So you’ve done that assignment. Now you’ve got the final hurdle: getting paid.
In most cases that means writing an invoice to send to your client, but if you haven’t done one before what should it include? With advice from Chris Mandle, a freelance journalist, and Quentin Pain (founder of accountacy website Accountz), this guide will tell you how to write the perfect invoice and what to do next if the cash never arrives.
If you are new to invoices check out our articles on freelancing or starting a business, just to make sure that you are doing this earning lark legally.
Know the payment system
Some assume you will send an invoice, others will have a self-billing process that will do it for you. With each new client you work with, make sure you check. If you make an obvious mistake in your invoice it may delay your payment!
What to put into an invoice
There is no exact format that you should use for your invoice. Quentin advises that its main aim should be to “make it really really easy for them to pay.”
Main details: “By law you need your name, address and VAT number (if registered) plus the name and address of your customer,” advises Quentin. If you are earning over £77,000 (2012/3) you must charge VAT. For details, visit HMRC.
“You also need your Company number (if Limited) and registered office address. You must have unique identifying number (ie a unique invoice number) and the word ‘invoice’ on it.”
Also include the date! This ensures that if payment has not been received you have proof of when you submitted it to them.
Item/Description: concisely describe exactly what work you have done for them here. It may be a good idea to include the person who commissioned the work as a reference.
Terms and Conditions: you should be paid within 30 days.
What happens if you don’t get paid on time
“If you don’t get paid within 30 days, it is important to start chasing up straightaway.” advises Quentin.
Chris normally emails a week after he has sent an invoice to see if they have received it.“If there’s still nothing after a few weeks, I’ll ring the office or the person directly. Any follow-up emails may just get glanced and forgotten about.”
“I spoke to other freelancers for advice, since I figured they might be clued-in to specific employers or practices. Everybody said the same thing: chase them up and don’t let things get forgotten.”
What to do if you don’t get paid at all
“It’s so frustrating when you’re owed money,” says Chris. “Bills, train tickets, rent all need to be paid regularly, which is frustrating when you’re not being paid on time.”
You should consider penalties. “It’s a statutory right that self-employed workers can charge 8% interest on late payments, and because it’s a statutory right you don’t have to declare it to employers beforehand or in any contracts and invoices.” Chris added the 8% to a client that had not paid him for months, but they refused to pay the additional charge. “At the time, I didn’t pursue the matter as I just wanted what I’d earned, but don’t be afraid to challenge people.”
If this doesn’t work? “Threaten with the small claims court for amounts less than £5,000,” suggests Quentin. “Then carry out your threat if they do nothing. The court will set a date, so this will get resolved.
Quentin says that you may lose a customer, “but who needs a non-paying customer?”
Still confused? Download our example invoice.
Read more How to articles.
Image by comedy_nose, under a CC BY 2.0 license.