If you work as a freelancer, there is no getting around the process of sending invoices. The vast majority of businesses simply won’t pay you unless you send one. To help you send an invoice successfully, this guide will outline everything that you need to do. Read on now for the full guide on how to send an invoice when you are working as a freelancer.
Find a Solid Template to Use
Sending an invoice can be stressful because it can be very difficult to know how to start and how much in tax you may owe in the future. The simplest way to begin is to either ask a friend who you know is a freelancer to send you a template, or you can look on the internet for a template that works online. The best templates should clearly outline the parts of your invoice that you should fill in. This means that you should:
Include Your Address and Theirs
It’s a requirement to correctly address the company that you are invoicing. Make sure to ask the accountant or relevant person that you are invoicing the full address of the company. This is an important part to get right if you wish to get paid on time. As well as including their address, you should make sure to include yours.
Charge Per Item or Hours Worked
As a freelancer, there are usually two ways to calculate the revenue earned. You should either charge by the hour or by the unit of work provided. This is something that should be agreed upon in advance so you know exactly how much money you are making. If you are charging per item, make sure to include the date upon which it was delivered and the exact name of the work delivered. Charging per hour is also a solid way to make money; if you are unsure of how many hours you have worked, calculate how many hours by using an online calculator.
Itemize Each Part of Work Completed
Each part of the work should be itemized in detail. If you are charging by hours, then you should set out the unit of hours per day on each entry. The reason for doing so is that you can let your employer know exactly what you have delivered. The great reason for doing this is so you can be transparent about your work and then hopefully secure future gigs.
Calculate Whether You Need to Charge VAT
Depending on how much you earn and the types of services you offer, you may need to charge VAT, which is calculated at around 20%. It’s worth also knowing that the VAT rate can be reduced by the government, like the emergency rate for certain sectors due to the coronavirus pandemic. You will have to pay if your yearly turnover is over £83,000. Simply add the VAT to the end of the invoice. It can be a complicated process, so it may be worth consulting with an accountant in order to get absolutely everything right in this regard.
Include Your Full Bank Details
If you want to get paid, then it helps to include your full bank details. This is not just a question of including your sort code and account number, but also your IBAN in the case of international transfers, as well as the bank branch you use and your full name. This is definitely something that you want to get right as the invoice could be processed to the wrong bank account entirely. Sometimes you may be paid by an alternative money system, such as PayPal. If so, then simply your full name and email address will suffice. If your invoice differs from the payment system that the employer offers, this may cause confusion, so be sure to iron this out in advance.
Double Check Everything
If you want to receive your invoice in good time, make sure that absolutely every detail — from the name of the work owed to the current date — is absolutely correct. If it is wrong, make sure that you correct it because otherwise, they may not pay you in time, which could affect your bottom line. It’s recommended not to check it just once or twice but to check it several times in order to ensure it is paid in time. Just make sure to change the file that you use to send the invoice to a PDF or a likewise file in order to avoid the file from being tampered with. Also, make sure to keep your own copy on record for future accounting. If you are confused about the process, get tax advice immediately.