Invoicing is a constant part of your life as a freelancer. In fact, it’s one of the most important business functions. After all, it directly determines how much money you bring in. Following a set of best practices for your freelance invoice can help you get paid in full and on time.
Send Invoices Immediately
Chances are, your clients are busy professionals with numerous demands on their time and attention. This means the best time to send an invoice is when you deliver a project. A handy invoice allows your clients to take action right away while the project is still on their mind.
If you’re working on a long-term project, it’s helpful to invoice once a week or once a month. Frequent billing does two useful things for your freelancing business. First, and most importantly, it ensures a steady cash flow. Second, it helps you spot problem clients — a customer that’s consistently late with payments or gives you excuses about why they can’t pay. At that point, you can pause the project and focus your attention on more reliable clients.
Issue GST-Compliant Invoices
Since the goods and services tax law launched, GST-registered businesses are dealing with stricter invoice rules. GST-compliant invoices make it easier for these businesses to file their taxes and claim the maximum credits. You can help by including all of the required information, such as:
- Contact information and GSTIN for you and the customer
- Description of the services you provided
- The taxable value of your services
- Tax breakdown for state and central governments
- When you’re setting up your GST invoices, make sure your payment deadlines are clear. In most cases, it’s good to place this date near the top of the page in large, bold text so clients can find it quickly.
Go Digital With Invoices and Payments
When trying to collect money from clients, it’s a good idea to make the process as easy as possible. Imagine your client is ready to settle your invoice but discovers the paper copy is lost, or that you only accept cheques. If they don’t have time to hunt for the invoice or are out of cheques, your payment gets pushed to the back burner.
This is where going digital is a big help. When you send digital invoices, all customers need to do is search their email inbox. For even more convenience, set up accounts with a variety of online payment services so you can allow customers to pay whichever way is easiest for them. Removing all possible roadblocks helps get payments in the door faster.
Remind Clients About Payment Deadlines
Even your most well-meaning clients can forget about payment deadlines. To help, you can send reminders as the invoice deadline approaches. In many cases, these gentle nudges are enough to get clients to make their payments. Software like QuickBooks can help with this process. Simply set up automatic payment reminders and the system will reach out to clients and track your invoice until the bill is settled.
A great invoicing process is an important part of your small business accounting system. With user friendly invoices and payment options, you can take the stress out of collections