How to invoice your freelance clients professionally and ensure you get paid

As a small business owner, your survival depends entirely on getting paid by clients. It’s as simple as that. If the money isn’t coming in, you can kiss your freelance life goodbye.

Image licensed via Adobe Stock

Image licensed via Adobe Stock

But before you panic and worry about the possibilities of unhealthy cash flow, consider our complete guide to invoicing. Because if you want to get paid on time, you have to establish a reliable system that confirms you as a professional, respected supplier.

Through our considered help and advice, you will discover everything you need to know about invoicing your clients professionally while ensuring you get paid on time – leaving you to get on with all the good stuff – i.e. creating and making.

So if you find the thought of invoicing daunting, the following tips will help you to avoid the usual pitfalls and frustrations.

1. Do a little research on all new clients

When you win a new client, you face lots of unknowns. At such an early stage in the relationship, you don’t yet know if they’re reliable payers or even if they’ll pay you at all! Combat this by doing a little investigation via the UK Government’s Company Check website and gain access to company or director reports, to see what you’re potentially dealing with.

Lessen your risk further by insisting on payment of deposit upfront. Charge anything between 25 and 50% – depending on the work involved. That way, you have some money in the bank before you even get started. It's quite a common practice, so don’t feel shy about asking for peace of mind.

And if the client refuses to pay such a deposit? It’s a huge red flag, indicating that you’d be wise to walk away.

2. Establish your payment terms

As a freelancer, it’s advisable, and expected, to set your payment terms. These establish your policies when it comes to money. For example, which payment methods will you accept? Cash? Cheque? Both? What about your expectations on when payment should be made? Same day? Ten days? If you’re stuck and need help with this, the typical standard payment terms are based on 30 days, but it’s your business – and if that doesn’t work for you, you’re allowed to set your own rules.

Just remember that payment terms will vary dependent on the client and what you negotiate during your initial meeting when you’re getting set up. Be prepared to be flexible and make changes to accommodate each client.

3. Get to know the client’s way of paying

Every client is different. Some will insist on their payment terms of 60 days while others might pay the same day you invoice. Some might need to issue a Purchase Order number before you send over your invoice; others may request there is a specific company name included on the document.

Whichever way your client likes to pay, you must be aware of it and adjust your terms accordingly. It will ensure there is no unnecessary delay to payment.

4. Make friends with the accountant or accounts department

There is always someone looking after the books. Get to know them and become their best friend. Be polite, patient and friendly when dealing with them over the phone or in person. Remember, they’re only human and will potentially have to handle a lot of impatient people, chasing payment for their products or services. Be the one that stands out in their minds as the one they look forward to hearing from.

With one of my clients, I’m on first-name terms with the woman in the accounts department. We always have a laugh when I call, and I send her chocolates at Christmas to thank her for being so helpful. I'm sincere in my approach, be kind, and I’ve never suffered a late payment.

5. Create the perfect invoice

There is no exact format that you should use for your invoice, but certain items are expected. By law, you must include your name, address and VAT number (if registered) plus the name and postal address of the client in question. It's also helpful to add other items, such as your bank details and terms of payment.

When crafting your invoices, you should refer to the following checklist and ensure you've not missed anything:

  • Your company logo (if available)
  • Your name
  • Company number (if Limited)
  • VAT number (if registered)
  • Registered office address
  • A unique invoice number
  • Name and address of your client
  • The word ‘invoice’ on the document
  • The date – this ensures that if payment isn’t received, you have proof of when it was submitted
  • Item and description: Describe the work you have done for your client
  • Terms and Conditions: Include your payment terms, i.e. “Payment must be made within 30 days”.
  • Your bank details: Make it clear where payment should be made and to whom, i.e. include the required business name for cheques and bank account name, number and sort code
  • Your bank details for BACS transfers
  • Any relevant PO number issued by the client.

6. Create a filing system

When creating invoices, it’s essential to keep them on file for future reference. You’ll also need them when you come to file your tax return.

Save them via invoice number or by date in a cloud storage solution like Dropbox, so you can quickly and easily refer back to them. So, for example, “INV-2045 Creative Boom” or “16-04-13 Creative Boom”. Adapt the system accordingly.

7. Set up an online accounting software tool

To make life easier and save yourself unnecessary pain further down the line, sign up to an online accounting software solution. They take the complete hassle out of your finances and give you a professional edge.

We personally love FreeAgent because it allows us to set up recurring, professional-looking invoices that can send themselves automatically, and nudge those pesky late-paying clients with automated reminders.

FreeAgent also helps you fill and file your tax return, connects to your online bank account and automatically imports transactions straight into your accounts every day. It gives you a live view of your business cash flow – as well as keep tabs on your income, expenses and profitability.

Other accounting tools to consider include Xero and ClearBooks. Both are great alternatives and offer free trials – as does FreeAgent.

8. Prepare to chase if you don’t get paid on time

If you don’t get paid within 30 days, or the agreed terms are ignored – it’s crucial to start chasing right away. Send a statement to remind the client that payment is now due. If you hear nothing back, pick up the phone and request an update. Apply some pressure and ask for what is rightfully yours.

Uncomfortable about chasing? Hire someone to do it for you – someone you can trust to be friendly but firm and professional. Consider a virtual personal assistant or freelance accountant.

9. And if they still don’t pay?

If you're still not seeing the money, you should consider penalties. According to the UK Government, you can claim interest and debt recovery costs if another business is late paying for goods or service.

If you haven’t already agreed when the money will be paid, the law states the payment is late after 30 days for public authorities and business transactions after either: the customer gets the invoice, or you deliver the goods or provide the service (if this is later).

The interest you can charge on late payments is ‘statutory interest’ – this is 8% plus the Bank of England base rate for business to business transactions. The current Bank of England base rate is 0.5%, so statutory interest for a recent debt would be 8.5%.

For example, if your business were owed £1,000:

  • the annual statutory interest on this would be £85 (1,000 x 0.085 = £85)
  • divide £85 by 365 to get the daily interest: 23p a day (85 / 365 = 0.23)
  • after 50 days this would be £11.50 (50 x 0.23 = 11.50)

More helpful advice can be found via Gov.UK’s guide on Late commercial payments: charging interest and debt recovery.

When informing your late-paying client about ‘statutory interest’, give them a chance to pay before you apply the additional charge. Even better, include these potential charges in your initial payment terms – so your client is fully aware that you are entitled to authorise penalties, should things escalate.

10. The last resort

If threatening to charge statutory interest has done nothing to help, you could threaten to make a court claim for money. It used to be known as taking someone to a ‘small claims court’. However, a mediation service could be quicker and cheaper than going to court. It's when an impartial person helps both sides to agree.

You can also make a claim online if you’re claiming for a fixed amount of money. For unspecified amounts, you must download and fill in a claim form instead. You must then send the claim form to County Court Money Claims Centre, PO Box 527, Salford M5 0BY.

For those of you worrying about taking such measures to get paid and whether you’ll damage your client relationship, who wants to continue working with someone who doesn’t pay? Certainly not me. Learn from the situation, and move on to more reliable clients who respect your services and pay on time.


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