After you have set your rates and have clients lined up, it’s time for you to get paid for your consulting services by sending your clients an invoice. An invoice, also known simply as a bill, is important because it’s how you’re going to paid what you’re owed by a client for the work that you just completed.
While invoices can vary from person to person and industry to industry, they typically include:
- The word “Invoice” at the top of the document.
- An invoice number to help manage your invoices so that you can see which ones have been paid and which invoices are still pending. Invoice numbers are also used for tax purposes in case you get audited. Make sure that you don’t use the same number and begin with 001.
- The date that the bill was sent, as well as the date that you expect it to be paid. Most invoices are to paid within 30, 60, or 90 days after the invoice is sent.
- An itemized description of your work, such as a breakdown of the various components of your project and what each cost.
- The total amount due that you’re charging the client for your services.
- Invoices should also include the name, address, and contact information for both you and your customer in case you have to get in touch with each other.
Even if your invoices contain the components listed above, you’ll want to create a more professional invoice that will help you stand out from the other invoices piling up on your client’s desk. And, that will probably improve your chances of getting on time.
- Have Payment Policies in Writing. Your payment policies should have been discussed when you and the client signed a contract, and it should also be in writing. This should include the percentage you’ll charge for late fees, discounts for early payments, additional charges, advance payments, and how you expect to be paid.
- Accept Multiple Forms of Payment. What is you preferred form of payment? Checks, credit cards, or third party payment gateways like PayPal. Even if you have preference, you should accept several different payment options so that it’s easier your client to pay the invoice. If you use a service like Due.com you can accept several payments, such as credit cards and PayPal.
- Business Structure and Taxes. This may not be an obvious concern for all consultants, but even if you’re a sole proprietor, you’re responsible for paying taxes so make sure that you set aside money to pay your taxes.
- Brand Your Invoices. You can really set your invoices apart by matching them with your brand. Due.com, for example, allows you to add your brand’s logo and template that best fits your brand.
- Use Invoicing Software. There is no shortage of invoicing software options, which can make creating and sending out invoices a breeze. Due.com is one platform that you can save you time because you can store your recurring clients information so that you don’t have to keep entering their information each time you send them an invoice.
Getting Paid Faster
Creating professional invoices is just one part of getting paid for your services. You also have to ensure that you’ll get paid each and every time that an invoice due date approaches.
- Create an Invoicing Schedule. When you’re starting out on your own, you may not realize that invoicing is a frequent task. To make your life easier, create an invoicing schedule. It could be as simple as invoicing your client as soon as you’ve completed a project. You could also invoice your clients weekly, bi-weekly, or monthly. Keep in mind though that you may have to adhere to your client’s payment schedule. If they pay on the first of the month, then that’s when you should send out their invoice.
- Send the Invoice to the Right Person. To speed up the payment process, make sure that you’re sending the invoice to the right person. just because you’ve been dealing with a project manager does not mean that that’s the person paying your invoice. Instead of having the invoice pass through multiple hands, send it directly to the person making the payment, such as the accounting department.
- Use Days, Not Net. Not all business owners are familiar with the term “net.” Use a phrase like “payment due within 30 days” instead “net 30” to make it clear when exactly the payment is due.
- Be Polite. If you use terms like “please” and “thank you” at the bottom of your invoice you can increase your chances of getting paid on time by 5%.
- Automate Billing. With software like Due.com you can automate bills if you have recurring clients. This means that a client’s credit card or checking account will be automatically deducted on an agreed amount on a specified date each month.
- Ask For Something Upfront. For those working on large or expensive projects, you should definitely ask for an advance. For example, you could require a 25% deposit upfront, 25% during the halfway point, and the final 50% upon completion. If you have an advance, this will help you pay for and overhead or additional expenses that may incur during the project. Deposits also soften the blow if the client doesn’t pay your invoice.
There are two final points that you should keep in mind when it comes to invoicing. Number one; don’t continue working for a client if they don’t pay you. You could use that time working for a client who does pay their bill. Number two; if there is any intellectual properties involved, such as copy or software, that will belong to the client. However, you should hold onto the property until they have the invoice in full.