Time for invoicing!
Anyone who works as a Freelancer knows that making time for invoicing is an important part of your job. If you work, you should get paid for the hours you put into any projects you undertake. It is just that simple. For those who think it is a daunting task though, relax. It doesn’t need to be complicated.
How-to Guide for Invoices
For starters, you need to keep careful track of your hours worked. I write down everything I do in a day planner; what I do, for whom, and how long it takes. I usually do more or less the same thing for clients week in and week out, but sometimes extra items get added into my tasks for one of them. Plus, I also have clients who contact me for one-off projects on occasion too. No problem! I write everything down, so I don’t forget anything.
Once a month, I go through all those notes and calculate how many hours I worked for each client. You can download simple invoice templates from thousands of online sites, but Microsoft Word comes with several too. If you want to get fancy, you can even build your own. All you need to include is your name, contact information, client’s name and contact information, and a breakdown of expenses. Don’t forget to add a date, plus invoice number, for reference. I also include a line regarding when payment is expected and penalties for late payments.
Sadly, You will come across people who pay you late at some point. Don’t take it personally, but do create contingencies for it. Again, your time and efforts are valuable. If you pay your credit card bill late, they don’t think twice about charging you plenty of interest. And if clients pay you late, that might mean you pay your own bills late. Make sure to cover yourself.
Include Accounts Receivable Ledgers
Once you send your invoices, you need to keep track of that too. Again, I use a simple Accounts Receivable ledger and fill in details for all the invoices I send out, plus mark when payments come in. Don’t rely on your memory, as you might have to go back and look at this months down the road for reference. I do note in my planner when I send invoices and receive payment too, for cross reference. It might sound complicated, but it’s not. Depending upon your line of work, you might need to keep track of payables too, but as a writer, I generally don’t have any.
I choose to tackle invoicing once a month for simplicity, but you can do yours weekly, bi-weekly, or as projects occur (for one-off projects). If you have all of your monthly accounts receivable ledgers handy, then you can calculate how much money you earn each month, and more importantly, you will have all the paperwork you need come tax time. Taxes are complicated enough, without having to first compile everything you have done over the course of the year. Keep on top of it for peace of mind!
If you want to make your like easier again, there is also accounting software you can use to keep track of everything. If you can wrap your head around that, it makes your accounting practices that much easier. I have tried Quickbooks, but didn’t love it. Feel free to share which ones you use though!
If you will excuse me though, I need to tackle my own right now. Good practices make for good income.
Invoicing today! Hope you are in the money this month.