Tracking and billing time is an important task as an independent contractor. And whatever billing method you choose, you’ll want to present a reputable, professional invoice to your clients. Follow these five tips to present a clean, professional invoice to your clients.
Establish a Billing Policy
Creating billing policies and procedures for your business is a key organizational task. Your billing policy should include rates, billing method (paper or electronic), timing of invoicing (weekly, monthly, or project end), time to pay, preferred payment method, and late fees. Having a standardized set of rules will simplify your billing and help you evaluate client contracts.
However, even with an established policy in place, some client contracts may differ. In addition to having your own set of rules, it is also critical to understand your clients’ billing policies. Ensure that policies are outlined up front so you can present a compliant bill. For example, some clients may require a paper invoice and a longer time to pay than your standard billing terms. Knowing this in advance will allow you to make appropriate adjustments or negotiate these terms with your client.
When preparing your invoice, remember your audience. In some cases, there may be multiple levels of review or invoices may be processed by a third-party vendor. Avoid the use of industry jargon or abbreviations in your descriptions so that anyone reviewing will understand what is being billed.
Even if you bill by the project or by the month, it is always a good idea to keep a record of time spent on client tasks. As a best practice, always record your time immediately or as soon as possible. This will ensure that your records are both up-to-date and accurate. You can track time using time and billing software, smartphone apps, or even a simple notebook.
The details on your particular invoice may vary by industry or client requirements, but it is always important to include:
To avoid billing conflicts, always have a signed agreement on file that articulates the billing process and terms.
When it comes to preparing professional invoices, there are a number of options. You can create a simple invoice using a Word or Excel template. This is an easy, low-cost process. Alternatively, you can use time and billing software or see if your bank or credit card company offers invoicing services.
Managing accounting tasks such as time entry, invoicing, and collections requires accuracy, tracking, and follow-up. To eliminate this unnecessary stress and instead dedicate your valuable time to billable work, may want to consider a more comprehensive service option. MBO Partners can help you efficiently and compliantly complete these accounting tasks.
Lastly, remember that every client touchpoint reflects your brand—including invoices. Always present invoices that are accurate, timely, and free of errors.
Depending on your particular business and client some invoices may be more complicated than others, including itemized deductions, detailed work descriptions, or receipts. If you have any questions about creating your invoice, don’t hesitate to ask us!
Contracts are an essential part of a successful independent consulting project, creating a sense of professionalism, encouraging communication, and ensuring a streamlined process.
Negotiating a contract is an important step in any business relationship. Ensure your next independent contractor agreement includes your desired terms and conditions with these tips.