There are some pretty exciting benefits of freelancing. You get to choose your own hours, set your own rate, and fill your calendar with projects that interest you.
Invoicing, however, isn’t quite as exciting.
Customizing your invoices may feel overwhelming at first, and chasing late payments can affect your productivity.
Having a few simple processes in place can help you get paid on time without causing you extra stress.
Invoices should be clear and concise
To encourage timely payments, keep your invoices simple yet professional; they should be easy to read but detailed enough to communicate how you spent your time during the billing period. AND CO offers a simple invoicing system designed for freelancers, complete with payment alerts and notifications when your client views your invoice.
If you’d prefer to create your own invoicing template, just be sure to list:
- The invoice number
- The invoice date and payment due date
- The client’s name and contact information, in addition to your own
- A breakdown of services rendered, including dates, item descriptions, hours worked, and your rate
- The subtotal and total payment amounts, as well as the payment methods you accept
- Terms and conditions for early or late payments
By including these items on your invoices, you can make the billing process easier for both parties.
Strategies to get paid quicker
Freelancers should make a point of invoicing clients on a regular basis. Submitting invoices on the first day of each month, for instance, is more likely to encourage timely payments than doing so whenever you feel like it. Strategies for getting paid faster don’t end there, though.
You should also:
1. Be mindful of your payment terms (including the payment due date)
Net 30 payment terms—which require payment within 30 days of receiving the invoice—are often the standard, but they aren’t the only option available to freelancers. If you want to get paid faster, rethink your payment terms
If you impose Net 15 payment terms, for example, you’re asking the client to pay you within 15 days of receiving the invoice—and you’ll be more likely to get paid on time because your invoice will be fresh in the client’s mind when payment is due. You can even request payment within seven days, although some clients may not be able to accommodate such a short turnaround.
The important thing here is to be consistent. Determine what works for you, and then stick with it.
2. Offer early-payment discounts (or charge late-payment penalties)
Some freelancers offer discounts to clients who pay their invoices within a specific timeframe. Even if you have Net 30 payment terms, you can offer clients who settle their balance early—say, within 10 days—a discount of up to 10%.
These discounts aren’t necessary by any means, but they’re a pretty good incentive for getting clients to pay you on time.
Similarly, you may choose to include late-payment fees in your invoicing terms. A typical charge is 1.5% interest for each month the payment is past due. It’s worth noting that you may struggle to collect these fees when relevant, although they deter most clients from waiting too long to settle their balance.
More: 7 Things to Do Before You Send Your Next Invoice
3. Send automatic reminders (and don’t be afraid to follow up)
Aautomatic payment reminders are ideal for when you’re nearing the payment due date. Chances are the client received your invoice, set it aside, and forgot about it—and a gentle reminder will encourage them to transfer the funds they owe you by the payment deadline, with little hassle. AND CO sends you reminders when your invoice is almost due or overdue, so you won’t forget even if your client does.
If you send the client a reminder and still don’t get paid, make a point of following up. Be polite, but it’s important to be proactive while you wait for the past-due payment to come in. Consider following up by phone or email once a week, every week, until you get paid.
While this post is designed to help freelancers improve their invoicing and get paid faster, you may face the occasional late-paying client even with these tips in place. According to the Freelancers Union, 71% of freelancers have struggled to collect payments at one point or another.
Here’s how to write an overdue payment reminder letter that’ll get your client to pay up sooner.
For more about invoicing, take a look at our complete guide to invoicing as a freelancer.