How to create and send an invoice
You’ve delivered an amazing piece of work for your client and would like to get paid. In other words, you need to send an invoice. But what should you include on the invoice? Who should you send it to? And when should you send it? If you’re wondering where to start with invoices, read on.
What do I need to include on my invoice?
An invoice is the bill that you send to your clients, setting out the services or products you’ve delivered (or will deliver) and how much the client needs to pay. Your invoice should include:
Legal name, address and contact details of your freelance business (which may simply be your own name and home address, if this is what you use)
Name and address of your client
Invoice date
Invoice number, which must be unique
Purchase order number (if relevant)
Details of the services / products and the date(s) that these were supplied
Charge for each item
VAT (if relevant)
Total amount owed
How to pay the invoice (eg your bank details or where to send a cheque)
When the invoice needs to be paid by and any penalties for late payments.
It’s also important that you make it clear that this is an invoice – adding the word ‘Invoice’ at the top of the document is usually the simplest way to achieve this! This means your invoice should go to the correct person or department when it arrives at your client’s company, which is pretty important if you want to get paid.
If you’d like a hand creating your invoice, there’s an invoice template in the Freelancer Toolkit to point you in the right direction.
What is an invoice number?
An invoice number is a unique code that you use to identify and track that invoice. There are two key reasons why you should include an invoice number on each invoice. First, HMRC states that each invoice you send out should include a unique identifying number and second, it makes it a lot easier to follow up a late payment if you can quote this number to an accounts department.
There are no set requirements on how you create the invoice number. As long as the system you use is clear and consistent and each number is unique, you can set it up however you fancy. The most straightforward option is to give the first invoice you send out the number 1, your second 2 and so on. However, it’s equally acceptable to use a different format, for example incorporating in an identifier for the client and/or the year of the invoice.
What is a purchase order number?
A purchase order is an official document that a client might send to you to confirm a piece of work and how much they’ve agreed to pay for it. Not all companies use purchase order systems but it’s always worth checking when a client books you in for work as a purchase order is, in effect, a pre-authorisation of the work.
Similar to an invoice, each purchase order includes a unique number, known as a purchase order (PO) number. This is the identifier that the finance team will use to track the order and match it up with the invoice when it comes in – so it’s important to include it on your invoice to avoid any delays in your payment being processed.
How much detail should I include on my invoice?
Your invoice needs to clearly state what you have delivered. However, don’t write an essay about your work – a clear list, specifying the number of days or items at a specific rate works best. For example:
Delivery of marketing support services for Client X between September to December 2021:
Research & creation of website blog articles: 5 x articles @ £115 per article
Research & develop white paper on jobs market: 4 x days @ £450 per day
When should I invoice my client?
When you invoice a client depends on the amount of work you’re delivering, the length of time it will take to deliver and who the client is.
For example, if you’re delivering a small, one-off piece of work, such as an article for a print publication, it’s normal to invoice once you’ve delivered the work. Alternatively, for a larger piece of work or one that’s spread over several weeks or months, it can be sensible to issue invoices at set points during the process to ensure you’re not left with a large unpaid invoice after you’ve invested considerable time delivering the work.
Whichever approach you take, make sure you agree it in advance with clients and keep a clear record of what you’ve delivered to avoid any nasty shocks later down the line.
How should I send my invoice?
The easiest way to send your invoice is to save it as a PDF document (to reduce the chances of anyone changing it) and then email it to your client. This means you’ve got a record of what has been sent and the date that you sent it, which is useful if you need to chase up payment.
To avoid any delays in your invoice being processed, it’s always worth checking the best email address to send the invoice to and whether there is anything specific that you need to include in the email header – larger organisations often have a dedicated email address for invoices.
If you’re not sending the invoice to the person who commissioned the work, copy them in when you send the invoice. This can help speed up the authorisation process and also gives you a point of reference if you aren’t paid promptly.
What should I do if my invoice is not paid?
If your invoice hasn’t been paid by the due date, don’t panic. There’s often a simple explanation, such as you sent it just after a payment run, the finance officer is on holiday or your invoice is sitting in a ‘pending’ pile waiting for a purchase order number. This means the first thing to do if your payment is overdue is to contact the finance department and/or your direct client and ask them why your invoice has not been paid.
Send a polite email with a copy of the original invoice, state when it was sent and the date it was due to be paid and ask if there’s a reason for the delay. This is often enough to either prompt the payment or provide you with the information on why it’s not been paid so you can sort it out. If you don’t receive a response within a week or you’ve still not been paid, then do a second follow up. This one should still be polite, but include a statement to the effect of: if the client does not pay within x days, you will charge them for late payment interest that will continue to accrue until the full amount is paid.
If that still doesn’t do the trick, you need to make a decision about how far to push it. If it’s only a small amount, painful as it feels, you might decide to chalk it up to experience rather than investing more time and effort in chasing the payment. However, if you want to follow through, you can make a court claim for the unpaid invoice.
What records do I need to keep of my invoice?
It is important to keep a record of your invoices, both so you can check that you have been paid and also because it’s a legal requirement for HMRC. Your invoice system can be as simple as an Excel spreadsheet backed up with a folder of your invoices or you could use blown accounting software. However, whichever system you use, your records should include:
Date you sent the invoice
Who the invoice was sent to
Invoice number
Purchase number (if relevant)
What the invoice was for
Date the invoice was paid.
This means you can easily identify any invoices that have not been paid and chase up payments. It also gives you a clear record of the amount of money you’ve had in over the course of the year, which you need to include on your tax return.
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