How to Invoice as a Freelancer: Everything You Need to Know

Being a freelancer means wearing many different hats, and knowing how to invoice is one of them. To make sending your first invoice a breeze, you need to create a professional invoice, set your payment terms, and decide how to handle follow-ups.

While it may sound intimidating at first, don't worry - we've got you covered. Freelance invoicing is a fairly simple process once you get the hang of it, so let's take it step by step.

What we'll cover

1. Why you need an invoice as a freelancer
2. The benefits of creating invoice templates
3. How to create invoice templates
4. Five elements to include on all your invoices
5. What to write when sending invoices
6. Tips on getting prompt payment from clients

Do I really need an invoice as a freelancer?

In short, yes. While you might have given your client a quote before you started working on their project, there are two major differences between a quote and an invoice. The first and the most obvious one is the timing. You'll send the quote before you start working, while an invoice comes after completing it.

In addition to that, a quote can be estimate-based, while an invoice details the exact amount due. For example, you can quote a three-month project and arrange monthly payments with your client. While the quote will show the final price of the entire project, you'll need to send three separate invoices, one for each payment.

In this case, each invoice will only state the work completed so far and the amount due will be split into three parts. That way, you're making your billing process easy for you to manage and for the client to understand.

Keep in mind that a quote is a formal sign-off on the work to be completed and the acceptance of the payment to come. An invoice, on the other hand, is an official request for payment, which is why you should use one if you want to get compensated for the work you've done.

What are the benefits of creating freelancer invoice templates?

With a template in place, you don't have to keep recreating the invoice structure repeatedly. Besides saving you the time and effort, this also reduces the margin of error. Since a template is a set structure you'll follow every time, the chances of accidentally omitting crucial details or miscalculating totals become less likely.

What's more, using invoice templates helps you create a consistent filing system so you can stay on top of outstanding payments and manage your finances more effectively. That way, when tax time rolls around, you save time on getting your documentation in order.

How to create a freelance invoice template

Just as any other document you send to a client, an invoice reflects your level of professionalism. That's why it's important to take some time to create an invoice template you can reuse for each job.

1. Starting from scratch

If you're not a designer, starting a template from scratch might not be a great idea. At the end of the day, you want to send professional invoices. Using Google Docs, Microsoft Word or Excel means you'll spend much more time formatting than it's worth. And that's not counting the time it takes to figure out which order you want the elements of your invoice to appear in.

2. Finding a free invoice template online

For non-designers, finding an invoice template online and customizing it is a much better choice than starting with a blank page. All you need to do is adjust the fonts, add your branding, and you're good to go.

3. Using invoicing software

Depending on how long you've been in the freelance business, you might want to use dedicated software in your invoicing process. While it's true the investment may not make sense when you're just starting out, it's worth thinking about if you send multiple invoices a week.

If you're just starting or work in an industry that traditionally charges hourly rates, a time tracker can also help with your invoicing. Instead of trying to keep mental notes of the time it took you to complete a task, you simply click a button twice - when you've started and when you've finished.

Besides helping with more accurate billing, this can also help take the mental load off. And the best part? There are plenty of free options out there for you to choose from, so it doesn't need to be an extra cost for you.

In addition to tools that help you invoice, you can also use an invoice OCR tool to help you keep track of expenses. These tools extract data from your inbound invoices, making the process of expense tracking less time-consuming.

Freelance invoice template design checklist

Whatever method you decide to use, all professional-looking invoices have one thing in common: great design. Making your invoices visually appealing while keeping the information easy to understand at the same time is crucial for improving customer experience. Here's how to do it.

Keep it clean

Avoid using too many colors or fonts that could distract the client from the important details. Now, this doesn't mean your invoice should be a boring, uninspired list of services rendered. It's all about finding the balance between using your specific branding style while creating a clean, uncluttered design.

Use a professional header

Your invoice is most likely not the only document your client will receive. That's why creating a header that clearly identifies you and the type of the document is crucial.

If you use a logo for your freelance business, make sure to include it in the upper right or left corner. In addition to that, clearly state your business name, invoice number, invoice date, and due date.

Organize the structure logically

To avoid creating issues for the client, take some time to figure out how to structure your invoice. Group similar information together and use sections to separate different parts of the invoice. Typically, your business information comes first, followed by the client's contact information, followed by the invoice specifics.

5 things to include on a freelance invoice

To make sure your invoicing process goes smoothly, you first need to make sure your client has all the information they need to start the payment process. Luckily, freelance invoicing is pretty straightforward, with only five obligatory elements to include.

1. Contact details

When creating an invoice, you'll need to include both your and your client's contact details for the purposes of identifying both parties involved in the transaction. This makes it easy for the client to know who sent the invoice and how to contact you if needed.

In turn, stating the client's information on your invoice is also beneficial for future reference, especially if the relationship turns sour. Sometimes, you'll encounter late payments or clients who flat out refuse to pay. In cases such as those, you might want to take legal action - and your invoice becomes proof of the transaction.

2. Invoice number

A unique invoice number is crucial for keeping your financial records straight. Besides tracking down late payments, it also helps you in cases when you need to answer additional questions from clients. Whether it's a client contacting you for clarification of payment terms or needing to set up a payment plan, an invoice number helps you know that you're talking about the same transaction.

To create an easily manageable invoicing process, think about the way you want to number your invoices. For freelancers with a small number of clients, a single digit number might be enough. But as your business grows, you'll need a more advanced numbering system to keep yourself organized.

For example, you can use the first digit to identify the client, the second one for the invoice number, and the last one for the current year. Let's say you have two clients, Jill and Joe. The first invoice for Jill is then #010123, the second invoice is #010223, the next invoice is #010323, and so on. The same goes for Joe - start with #020123 because he's the second client and change the middle digit for all subsequent invoices you send.

3. Invoice issue date and payment due date

There are two dates you need to list on your invoice as a freelancer: the issue date and the due date. The issue date represents the date when you created the invoice, whereas the due date is when you expect to receive payment.

In theory, your payment terms can state that payment is due on receipt of the invoice. However, in order to make the payment process easier for the client, most freelancers opt to set the due date a bit later than the issue date. 

That said, whichever option you choose, forgetting to clearly state the due date could create problems down the line. After all, how can an invoice be overdue if the deadline is not set?

4. List of line items and the total

A clear description of products or services provided to the client makes it easy to understand what they're being billed for. Transparency is key in every client relationship, so make sure to include a detailed description of the work completed.

If you can, break down your products and services in an itemized list with quantities and rates. This not only helps the client see the work you agreed on in your contract has been completed, but it also reassures them that there are no surprise expenses.

Make sure to also state any applicable discounts or early payment perks that impact the final price for your freelance work. The grand total should be clearly stated to make sure the payment you receive is correct. 

At the end of the day, the last thing you want to do is confuse a client ready to pay you with a complex pricing table. We've collected and analyzed a few real-life pricing table mistakes to help you avoid that.

5. Payment methods

In order to create an effective invoice, you need to tell your client how to pay you. It can be direct bank transfers, PayPal, cash or any other payment method you prefer, but don't forget to mention it on your invoice.

If you accept multiple payment options, list them all for convenience. Additionally, this section of your invoice is the best place to reinforce your payment terms. Don't forget to mention any early payment perks or late payment fees.

How to send a freelance invoice to a client

Now that you can confidently write an invoice, it's time to send it. Whether it's a PDF file or a link, you know that just shooting over an invoice with no context would be strange at the least. At the same time, asking for payment can sometimes feel awkward even though you know they're expecting it. So, if you're not sure what to write, here's an email template to get you started.

Subject line: Invoice [invoice number] from [your name/your company name]

Dear [client name],

Please find attached invoice [invoice number] for [product/service] due on [invoice due date]. The invoice contains all payment options and a detailed breakdown of products/services provided.

Should you have any questions, feel free to reach out.

Thank you in advance,

[your name]

Getting your invoices paid on time

More often than not, the best way to ensure prompt payment is to send invoices on time. As soon as you've completed the work, write an invoice and send it. The more you put it off, the longer it will take you to get paid.

Keep in mind that most clients take their businesses seriously and want to pay outstanding invoices as soon as possible. That said, work and personal life can sometimes get in the way, resulting in a late payment. For you, this means you'll need to get in touch and remind your client to pay you.

Usually, late payments are unintentional and a simple reminder should do the trick. But if your client ignores you intentionally, you've got a bigger problem on your hands. If that's the case, it's worth going through our guide on what to do when a client refuses to pay you.

Final thoughts

Knowing how to create an invoice is a crucial aspect of running your own business. Besides ensuring you get paid for your work, having an organized invoicing process in place lets you get more control over your finances. That way, you can set up your freelance business for success by spending more time doing what you do best rather than struggling with admin work.