By On Aug 30, 2019 Invoice Templates
Add a date that shows when you submitted the invoice to the client. The date prepared line is important because you will need to refer to it if a client takes a long time to pay you. We will go into that shortly, under payment terms. Specify when, exactly, the payment is due. The due date is entirely up to you, but most freelancers — and invoicing systems — use a 30-day, 45-day or 60-day timeline. You can also make the invoice Due upon receipt, so the recipient is required to pay the invoice promptly. This should not be the first time your client has heard about the due date. When you agreed to do the work — and hopefully signed a contract, or at least agreed to terms via email — you should have set expectations with the client for payment terms. If the client does not pay on time, you can refer back to this due date, as well as the prepared date if necessary. It is typically helpful to the client if you specify your payment options — whether you prefer to be paid with cash, a check, a credit card or a service like PayPal. (If PayPal is your preferred payment method, it is smart to add your PayPal email address to the invoice, so they send the payment to the right place.) Some companies offer direct deposit if you work for them on a regular basis, but more than likely you will have to send an invoice to request payment every time you complete a project.
Invoices assist a company in getting paid in full and getting paid on time. It can be difficult to get paid without a proper invoice. Companies commonly demand receipt of a detailed invoice before disbursing payments. Payment terms can help a company collect receivables quickly. For example, a company may say that payment is due upon receipt, within 30 days of receipt or 60 days receipt. Including a late fee policy on an invoice -- for example, that late payments are subject to a $20 fee -- can also help ensure prompt payment. Invoices provide evidence that products and services are delivered and establish a company right to payment. In the event that a customer does not pay, a company can use contracts and invoices to legally demonstrate to a court of law that it is owed payment. Likewise, the company can keep copies of invoices and amounts paid to contractors and vendors to establish that it completed its contractual obligation for payment. Even if you do everything right, there is always a possibility your business could be audited by the IRS. During an audit, the IRS wants to ensure that you have properly reported all income you received during the year. If you have an organized system of sequentially numbered invoices, the IRS has more confidence that you have reported income fully and correctly. If invoices are erratic or nonexistent, the burden of proof is on you to show that you are not hiding any income.
When you agree with the client on the terms of your work and sign a contract, you should list out how often you plan to invoice and when you should get paid. For instance, for recurring work, you might agree to bill on the first of each month, or biweekly so you get paid every other Friday. For one-off assignments, the most common practice is to invoice after the work is complete. However, if you are unsure, you might simply ask your client, Is our work complete? Shall I send an invoice your way? For big freelance jobs, such as assignments where you and your client have agreed upon a fee of $1,000 or more, you might invoice several times throughout the project. For example, you might invoice for half the fee at the beginning, then half when the project is complete. Or you and your client might agree to milestones that warrant payment, such as finishing an outline for a long project, or completing a draft of the work. When to invoice is really up to you — just make sure you and your client agree on this before you start the work.
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