8 Freelance Invoicing Errors You Need to Avoid5 min read
When you become a freelancer, you become a one-person business—not only are you responsible for creating great work for your clients, but also with all of the business communications, including the one that is most important for anyone who wants to continue to be able to pay their rent—invoicing.
It’s not the most fun part of the job, but it’s crucial to do it professionally, as well as to make sure you follow-up when necessary (and, by the way, AND CO can help with both sending invoices and following up).
Below are some errors that you should never make when sending invoices.
Not Being Prompt
If you have submitted a project and it has been accepted by your client, then it is time to invoice. You shouldn’t wait months to send an invoice—many companies won’t pay anyone unless an invoice is received, so you’re only delaying the time between project completion and payment if you forget to invoice in a timely manner. Make it a habit to invoice right away—even your clients will appreciate finalizing the transaction more quickly, as it helps them to keep their finances in order when they don’t have a lot of outstanding bills to pay.
No Client or Freelancer Likes Invoice Surprises
If you quoted a project rate of $1000, then you should invoice for $1000. If your quote was way off, and the project took you a lot more time than you thought it would through no fault of your client, then, even though it might sting to get paid less than you think you deserve for the work, you have to honor your original agreement—doing anything else will not only jeopardize your reputation with that client, but with anyone that client talks to. Word of mouth can be your best friend or worst enemy, so don’t add unexpected fees to a client’s invoice—not only will they probably contest the fees, but you’ll probably lose money in the long run due to lost business. Chalk it up to a learning experience and next time your quote will be more accurate.
Similarly, if you bill at an hourly rate, don’t inflate the number of hours you spent on a project. If a client works with many freelancers, you’ll soon be at the bottom of their list if you do the same work as someone else but bill for double the number of hours. Most clients have a sense of how long a project should take—plus it’s just dishonest. In the long run, the relationships you build with your clients are worth more than any single invoice you send.
Don’t Be Unclear on Your Invoices
If you send invoices that lack essential details—like the dates of projects, the titles, the agreed-upon fees, all as separate line items, then you’re probably going to be getting a call from your client asking questions that could have been cleared up by sending a clear invoice in the first place. This is an annoyance for your client, and not only does it make you look unprofessional, but it also hurts your relationship with that client—you’re always competing with other freelancers for work, so think of it from your client’s perspective—should they give the next assignment to the person who sends sloppy invoices, or to the one who is a breeze to both work with and do business with?
Not Specifying Methods of Payment
Your invoice should include accepted methods of payment and, if you accept checks as a payment, the name to which the check should be made out should be made clear. Whether this is your legal name or company name, you can’t assume that your client knows how you want the check made out—or even how to spell your name properly. Minimize the chance of human error by sticking that information right on the invoice.
Not Including a Due Date
Your invoice should include the date that you expect to receive your payment. This date should be reasonable, though—don’t send an invoice today demanding payment for tomorrow. A good rule of thumb is 30 days from the day the invoice is sent.
Not Including Contact Information
Just because your client has your contact information, it doesn’t mean that whoever will be cutting you a check or sending you money via PayPal will have your contact information—when you send your client an invoice, she might be sending it to the head of the billing department, and then he might be sending it to someone else to process the payment—someone who has no idea who you are, where you’re from, or how to contact you if she has any questions about your invoice.
Not Following Up
If you send an invoice and then payment was never received by the due date, you need to follow up promptly. Sometimes these errors are innocent—an email gets lost, an employee quits without letting anyone know that they never finished paying people that week, or any other number of scenarios may have happened. A simple reminder can get the ball rolling again.
In worse cases, delayed payment is not an accident. You need to know this so you can decide how to make sure you receive payment—or whether you need to call up a lawyer, which brings us to…
Not Keeping Records
You should be keeping records of your invoices. They can come in handy for all kinds of occasions, whether it’s looking for that old quote that you gave a company or whether you need to make sure your invoices match the contract you had with a client in the case of non-payment. If you ever do find yourself in a situation where a client is contesting your invoice or refusing to pay you, but you don’t even have a copy of your invoice saved somewhere, then how can you even begin to try to fight for that payment you deserve?
Your invoices could also be useful if you’re ever audited. Being organized is a crucial skill for a freelancer, and invoices should be among the many things you keep a record of.
If all of this sounds like a lot of extra work, it is. But it’s important work—and thankfully there are affordable and easy ways for freelancers to outsource their invoicing, freeing them up to focus on other aspects of their business—like creating the perfect logo for a client, or editing the next Great American Novel.