As a freelancer, you likely run your business under your own name. Only a select few freelancers go the extra mile to name their services or even incorporate their sole proprietorship.
If this is the situation you’re in, then you may be wondering, “Can I invoice a company as an individual?”
In a nutshell, freelancers who offer products or services to a company can invoice them. Now, there are several things to consider before you do so.
And there is a myriad of mistakes to avoid.
So in this article, we’re going to discuss the legalities and best practices for freelance invoices.
The Legalities and Enforcement of Invoices
When you create and send an invoice, you expect your customer to receive and pay it. But when you’re inexperienced in this department you may be wary that your invoice won’t stand up in court (should it come to that).
So you may ask whether or not an invoice is legal.
In most cases, you should be fine. But a few instances when you may run into trouble would be if your invoice:
- Has a higher rate than contracted
- Contains fraudulent charges (fees, services not rendered)
- Is a request for funds designed to look like an invoice
In other words, your invoice should be accurate, containing a detailed list of the services/products provided and a breakdown of the fees charged.
Now, what will make your invoice enforceable is based on the agreement between you and your client (which is great to have in writing, i.e. a contract). And you must include all of the information requested by the other party.
This may include your Tax ID number or social security number (or national insurance number if you’re in the UK) and a list of the products and services provided.
It’s also important to note that it’s not required that you submit an invoice for each purchase – unless this is the agreement between you and the client. Some freelancers will bill upon completion of an entire project, once monthly, or at other intervals.
As good practice, it’s a good idea to work out all the details of invoicing before you’re hired to perform a service. Just be sure to check the sales tax laws for the countries you’re invoicing to and from.
Complying with International Invoicing Laws
If you’re a freelancer with international clients, then it’s essential to learn how to comply with their regulations. For example, the European Union (EU) requires the following for invoices:
- Itemizing and charging VAT based on the consumer’s country
- Displaying your VAT number
- Types of services offered
Then freelancers located in AU or doing business with residents of AU, may have to charge goods and services tax (GST). And you have to itemize all of your services provided.
Yet, in Canada, GST is only required for certain sales, which fall under tiers of sales minimums.
If all of this seems like too much, then it’s better to refrain from doing business with clients outside of the countries you’re familiar with.
Creating a Proper Invoice
Now that you have the answer to, “Can I invoice a company as an individual?” it’s time to learn about creating a professional invoice. You’ll find invoicing clients is seamless, especially when you’re using an electronic platform like invoicely.
Here’s a quick list of what should be included in your freelancer invoices.
Your Name, Client’s Name, and Contact Details
If you didn’t incorporate your business and you’re operating under your name—then it’s important to use your name on all of your invoices. Whatever name you use on your business taxes is the name you should use.
It’s also essential to include your business address. This can be a P.O. Box or a physical address to the office you use. The point is to make it easy for your clients to contact if they needed to.
So include your phone number, email, and any other forms of contact you may have.
A Unique Invoice Number
Creating unique numbers for each of your invoices is critical to the organization of your payment system. You don’t want to just send out invoices without giving them a unique identifier.
With an invoice numbering system, you can easily track down invoices that are paid and unpaid. Then if you’re using an electronic invoicing system, this becomes even easier.
The Date and Due Date
All of your invoices should contain the date the invoice was sent, along with the date the payment is due. In the agreement you made with your client, you should have discussed how long the client will have to pay your invoices.
Some freelancers have due dates that are 7, 15, or 30 days from the time of the invoice date. But this all comes down to what you and your client are comfortable with.
And you may find that you have different payment terms for each of your customers, which is fine.
If there are late fee penalties, include this in your invoice somewhere. And be sure to notify your clients about the penalties before taking their projects.
Directions for Making Payments
The methods of payment you accept should be stated on your invoice. For example, the types of credit and debit cards you take and if there are any platforms they can pay through.
This includes PayPal, Mollie, and Stripe.
Again, if you’re using an online invoicing platform, you can accept digital forms of payment using credit cards or online portals.
It’ll also include a link so your clients can make a payment promptly.
Quick Tips for Successfully Invoicing Clients
Creating professional invoices is only one part of successfully invoicing companies. There are other measures you should take to ensure you’re paid on time.
For example, you should have the contact name and details for the individual responsible for hiring you and paying for your invoice. This way, you can put their contact information on the invoice.
This will help to ensure the invoice reaches the person who will pay you. Some companies are large, which means it’s a lot easier for your invoice to get pushed under a pile of paperwork or lost altogether.
Another reason why e-billing is a good idea. E-invoices are delivered directly to customers via email.
Be sure to send out your invoices right after you complete the services in your contract (verbal or written). This will promote prompt payment while the project’s still fresh in their minds.
You don’t want to send your invoice too late and have the client push it aside instead paying it. If you do a great job on your project, then send an invoice the same day or within 24 hours.
This way, they’re excited to pay you and possibly even start on the next project.
With an electronic invoicing platform, you can set up recurring payment reminders to help ensure your customers never forget to pay you.
Whatever platform you decide to use for your invoices, it’s a good idea to keep all of your invoices similar. Having a template is ideal so your customers recognize your invoices.
This is a part of your branding, so don’t overlook turning your invoices into marketing tools.
How to Use Your Invoice for Marketing
Who doesn’t want recurring customers, especially when you’re a freelancer? Consistently looking for new clients is tiring and can slow down your productivity.
So finding ways to turn your clients into recurring customers is key. One way to do this is by offering incentives on your invoice.
You can offer incentives for on-time payments and a discount code for their next service. Then to light a fire under them, you can put a time limit on the coupon offer (i.e. 30, 60, or 90 days).
Also, be sure to end off your invoice thanking customers for their business.
Creating an Invoice that Companies Will Pay
At the end of the day, companies are willing to pay for great work. If you’re a freelancer who takes pride in their services, then pleasing customers is your top priority.
Once you complete the services you’re hired for, don’t forget to use the tips above to ensure prompt payment. Then to make life easier for you and your corporate clients, consider e-billing.
This way, everything’s tracked and monitored for you. You have more important things to do than to play bill collector.
Hopefully, these tips will keep you from wearing that hat in the future!
So are you a freelancer who’s looking to create an invoicing system? Give invoicely a try with a free trial!