Working as a W2 employee has its perks. For example, you don’t have to worry about getting paid.
As long as you show up and do your job each week, you’ll get a paycheck in your bank account. But for those who work as independent contractors and freelancers, things aren’t so simple.
With a $1.2 trillion freelance market, it’s safe to say that more and more people are looking for an independent work environment. The only problem is dealing with invoices and getting paid.
Your first step in becoming a freelancer is learning how to fill out an invoice. Creating and sending invoices will become one of your most important activities.
You no longer have a billing department that handles this for you. You are your own billing department, for better or for worse.
Keep reading below if you need help understanding invoices and learning how to create an invoice fast.
So what is an invoice, anyway?
When you are selling services to other businesses, everything needs to be documented. When a business pays you to complete work for them, they need a receipt.
The expense is likely tax-deductible for them. But in order to claim it as a business expense, they need to have a receipt. So the invoice acts as a receipt, documenting the services provided and the amount it costs.
But it does much more than that. Invoices tell your clients how much they owe you, how to pay you, and when they need to pay. It lays out the terms of doing business with you.
While invoices might look complicated at first glance, they are really quite simple. And they contain key bits of information that you cannot leave out.
How to Fill Out an Invoice
Ready to start creating an invoice so you can get paid? Step one is designing a template.
You can use a free or paid invoice maker to create a professional-looking invoice. You’ll want to customize the template with your business name and add a logo and your contact information.
Make sure to keep it simple and clean. Then, you need to add in the relevant information for each client and/or project.
Start out by adding the customer’s contact information. If you are working with a larger organization, include the name of the person you are in contact with.
Add an invoice number and make sure to change it every single time you create an invoice. This ensures both you and your customer can easily file these away.
List out the services you are providing along with the specific deliverables you will provide.
Include the price per deliverable, the total price, and the terms of payment. Most freelancers opt for a net 30 payment term. You can also describe how the client can pay, whether by credit card, using your bookkeeping software, or by Paypal.
Then, just add the invoice due date, along with today’s date, and you’ve got yourself an invoice that is ready to send.
Please Pay Your Invoice
Now that you know how to fill out an invoice, you can draft one right away and send it off to your client. Then, you just need to play the client-chase game of getting them to actually pay the invoice.
But that’s a whole different process.
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