The number of self-employed people grows every year, but many of them do not have awareness of invoicing, let alone accounting. Being self-employed forces individuals to get into the apparently boring work of invoicing, and invoicing for multiple clients can make this more hectic.
Logging hours is a lot of trouble in itself, but then you have to tie them to tasks and prepare an invoice. None of this is fun, and can take a lot of time when it’s time for you to get paid for work done.
But it doesn’t need to be this way, as there are tools and software available that can automate many of these processes and help you get paid faster (since invoices will go on time).
Stop creating Excel invoices and follow these simple invoicing tips to save time and your sanity.
1. Use Professional Invoicing Software
There’s nothing more time wasting and frustrating as creating an invoice from scratch in Excel. You might argue that using an Excel template can save a lot of the time involved in creating the invoice, but we’ve never seen an Excel template that looks half-decent.
You have to create invoices that look good, and Excel (a spreadsheet tool) simply isn’t built for that. It’s a tool to store data and perform calculations.
There’s a reason professional businesses use invoicing software such as FreshBooks for their accounting and invoicing needs.
After that all you need to do is enter line items, enter basic information about your company and contact details, and your invoice will be ready.
No more fussing about with rows, cells or formula-based calculations.
2. Use Online Payments
There is little reason to ask for wire payments to your bank account where online payments offer such a convenient alternative.
Online payments come with added benefits of lower processing fees and generally faster crediting of your account.
Just imagine getting a check and having to worry about actually depositing it. Do yourself a favor and accept online payments only, and you’ll save yourself hours every month.
3. Flexible Payment Options
If you want to save both your client’s and your time, be flexible on payment options. If you present clients with just 1 payment method they might need to make arrangements, which might result in delayed payments.
You might even need to chase payments which will ultimately waste your time. There are multiple time-saving online payment options available these days – Payoneer, PayPal, Xoom – just to name a few.
4. Decide Payment Terms Beforehand
Before kicking off a project, lay out payment terms and communicate them to your client. Payment terms such as payment timelines, late fees need to be decided before the start of a project.
If you’re not getting money for the work you’re delivering, your cash flow will obviously suffer. You can’t let clients get away scott-free for that. Make sure to include late payment fees to deter this type of behavior.
Without any penalties, your clients will have no reason to pay you earlier.
In fact, incentivize early payments by offering a small discount towards the next invoice if the current invoice is paid before a certain due date.
Self-employed people and freelancers might think they’re powerless in case a client decides to pay them late, and that’s why we mention the incentives part.
5. Make Your Invoices Readable
Don’t send your clients an invoice that only a cryptologist can decipher. Generate your invoices using professional invoicing software, and you’ll have readable, professional invoices that won’t give much trouble to your clients.
6. Send Invoices on Time
Freelancers generally tend to look at invoicing as some sort of a burden, rather than something that’s going to get them paid.
Remember, delivering work does not get you paid. Completing the work and invoicing your client is what puts money in your account.
Many freelancers put off payments until it’s too late and the client has already forgotten about the work they did. This is dangerous as the client might start asking what you did for them and this will just waste your time.
To sum it up, send your invoices on time. Set a schedule where invoices go at the same date every month.
7. Send Your Invoices to The Right Person
If you’re a freelancer working as a contractor for an agency, it might be a good idea to ask your contact person who to send your invoices to. If you were brought on by the CEO, it doesn’t mean he’ll be servicing your invoices as well.
So ask your contact person who does the accounting for the company and send your invoices accordingly. You can send invoices to the contact person, but that’s going to naturally cause delays as they’ll have to forward it to someone else.