Are you freelance and need to send an invoice? No problem. We look at invoicing for self-employed work including payment terms, correct formating and tracking.
Working for yourself as a freelancer can not only be a rewarding career but also filled with plenty of perks! You generally get to set your own hours, pick which projects you work on, and pursue your passion. When it comes to the business side of freelancing and self-employment, things tend to be a little less fun.
Specifically, when invoicing for self-employed work, it can feel uncomfortable asking your clients to pay on time. This article will dig into best practices when invoicing for freelance work, including what your invoices should include, communicating with your clients, and a tool to streamline your invoicing.
Xolo now offers a free plan which gives you access to all of their business tools like invoicing and expense tracking. Try it out today! 🙌
Establish a Plan Upfront
Before committing to a project, you should work with your client to agree on payment terms. You may have a standard method you follow or adjust based on your project. What’s most important is that your client is on board with it and, if possible, has a signed contract committing to your terms.
When invoicing for self-employed work you should consider the following:
- Requiring payment in full before work begins
- Requiring an up-front deposit before work begins, then the remaining balance after work is complete
- Breaking the project into smaller milestones and requiring a percentage paid for each milestone reached
- Requiring payment in full upon project completion
You should also communicate your payment terms so there are no surprises when you issue your invoice. For example, will the invoice be due immediately upon project completion, or will your client have 30/60/90 days to remit payment? Include this in your project contract.
Include Important Details in Your Invoice
If your client works with other freelancers, getting an invoice with very little information can be confusing. When invoicing for self-employed work, be sure to include all of this critical information in your invoice:
- Your full name, mailing address, phone number, website, and email
- Client’s full name, mailing address, phone number, and email
- Your logo, if you have one
- Individual line items for each element of your project, along with the price for each
- Invoice number
- Date issued
- Date due
- Penalties for late payment
If you’re not using an invoicing tool, export your invoice as a PDF (never send a Word document!) and email it to your client’s accounts payable department. Include the invoice number and due date in the subject line so the recipient can tell at a glance when they need to take action.
All of your personal information will stay the same from invoice to invoice. Consider creating a professional looking template to make it easier to invoice your clients. Here is a free basic template we created.
Check out our film production forms page for more free templates.
Make it Easy for Your Clients to Pay on Time
Use an invoicing system that lets your clients pay in a variety of methods, including direct deposit, credit card, and mailed check. When invoicing for self-employed work it should be easy for your clients to actually pay your invoice. If you only offer one method of payment, you’re more likely to experience late payments (or no payment at all).
Invoices can get lost in the shuffle of email inboxes, especially if they aren’t due right away. Consider sending an invoice reminder one week in advance of the due date. If you don’t receive payment by the due date, follow up via email and phone call the next day.
Establish Rules for Late Payments
In an ideal world, all your clients would pay as soon as they get your invoice. However, in reality, most will wait until the due date to pay. Unfortunately, even when you do everything in your power to support them, some clients will pay late or require tons of reminders to remit payment. That’s why it’s essential to have rules for how you handle late payments.
Your rules will likely vary depending on the payment method you’ve established. For example, if you’re billing by milestone, you shouldn’t begin work on the next leg of the project until you’ve received payment for all work that you’ve completed. Similarly, if you require a deposit before project initiation, don’t start work until you’ve received payment! If you have to wait longer to receive compensation, you’re justified to begin work later and push back your deadline for deliverables – just make sure you communicate with your client the impact of their late payment.
Track Your Invoices for Taxes
Depending on where you live, as a freelancer, you may have to pay quarterly taxes. This means that you have to make an estimated tax payment every three months based on your income so far. Even if you don’t make quarterly payments, it’s still important to accurately track your income to make it easier to pay taxes at the end of the year.
Keep all of your invoices in one place. Consider having two folders within your invoice folder – paid and outstanding – so you know what you’ve received and what you haven’t.
Wrapping Up – Invoicing for the Self-employed Work
In short, there’s a lot you have to juggle as a freelance filmmaker and invoicing for self-employed work. While you probably started your business to focus on making films, you’ll have to handle additional responsibilities like invoicing clients in order to maintain a profitable business.