How Do I Develop an Invoice?
So, I’m going to be honest, creating an invoice is a pretty technical task, but what’s more important than the invoice, is the contract or proposal that comes before it. Essentially your invoice is a reflection of your payment terms that have already been written in your contract.
You need to be clear on your payment terms regarding exactly how much your client will pay you of course, but also determine the timeline of when a payment is due (2 weeks before services are rendered, 30 days after services are rendered, etc.).
In many different situations as a consultant, you provide a proposal of your services to your client first. That way your client has the opportunity to negotiate, and then when everyone has agreed on the terms in the proposal, they basically co-sign the proposal. Then you draft up the contract, which should be a direct reflection of what was negotiated in the proposal as well as the payment terms. Then once the proposal is approved and the contract is signed, you’ll generate the invoice on the timeline stated within the contract.
Now, on to the invoice itself. A typical invoice lists the following:
Your fee
Any additional expenses for your services
Your client’s address
Your Address
The invoice number (to keep your invoices organized and have a reference point should you ever need to find the invoice again. This can be a simple numerical system, like 001, 002, 003, etc.)
Not all invoices are the same, and you can always search around on Google for examples or purchase my invoice template.
If you don’t want to create your own invoice, there are plenty of accounting softwares or payment applications that will do it for you. For example Paypal isn’t an accounting software, but it does provide users the ability to create and send invoices through Paypal.
I use QuickBooks now, which is an accounting software, though I used my invoice template when I was first starting, but now I have QuickBooks which will also generate the invoice for me. If you’re looking for a free option, you can try Wave Accounting Software. The benefit of an accounting software is that it will keep all of your invoice records organized and run reports for you so come tax time reporting your income is a breeze.
You don't have to start with an accounting software (though you will need one to grow), you can use a template, however you still have to be sure to keep your invoices organized for accounting purposes at the end of the year.
Most importantly though, you want to be sure you and your client are clear on your proposal, contract and payment terms (discussed at the contract phase) before you even think about worrying about invoicing. Remember, it’s vital to be clear about payment at the contract stage, because whatever's in the contract is what you're invoicing for.
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