How to invoice as a freelancer

Invoicing
Invoicing

Stripe Invoicing is a global invoicing software platform built to save you time and get you paid faster. Create an invoice and send it to your customers in minutes – no code required.

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  1. Introduction
  2. How to set up an invoice as a freelancer
    1. Start with your branding
    2. Label it clearly
    3. Include your client’s information
    4. Specify the dates
    5. Itemise your services
    6. List the total amount
    7. State your payment terms
    8. Add any extras
    9. Use invoice software or templates
    10. Save and send
  3. What are common payment terms for freelancers?
    1. Net terms
    2. Partial upfront payment
    3. Milestone payments
    4. Payment on completion
    5. Retainers
    6. Hourly billing
    7. Late fees
    8. Early payment discounts
    9. Payment in advance
    10. Custom terms
  4. How to track and invoice for project-based or hourly work
    1. Tracking project-based work
    2. Invoice in detail
    3. Tracking hourly work
  5. How to handle freelance invoice disputes
    1. Understand the client’s concern
    2. Stay calm and neutral
    3. Refer back to the agreement
    4. Provide supporting documentation
    5. Find a compromise, when appropriate
    6. Use a mediator if needed
    7. Follow up after resolution
    8. Know when to stand firm
    9. Take preventative steps for the future
    10. Know when to walk away

If you’re a freelancer, the way you handle invoices speaks volumes. Failing to send a polished invoice or handling your invoice carelessly can send the wrong message to clients: that you’re winging it, or worse, that you’re not serious about your work. Sending a professional invoice tells your client you respect your work, and they should, too.

Invoices also protect you, serving as receipts for your expertise. They document what was done, when it was delivered, and how payment should take place. Without an invoice, you leave yourself open to disputes and delayed payments, or in extreme cases, nonpayment. A proper invoice puts everything in writing and leaves no room for confusion.

Approximately 74% of independent professionals experience late payments, and proper invoicing can mitigate this risk. Below, we’ll explain how to set up an invoice as a freelancer, common payment terms for freelancers, invoicing for project-based or hourly work, and handling freelance invoice disputes.

What’s in this article?

  • How to set up an invoice as a freelancer
  • What are common payment terms for freelancers?
  • How to track and invoice for project-based or hourly work
  • How to handle freelance invoice disputes

How to set up an invoice as a freelancer

As a freelancer, your invoices should be complete and organised and leave no room for ambiguity. Here’s how to set up an invoice that works for you and your clients.

Start with your branding

Your invoice is part of your professional image. Add your logo, business name, and contact information at the top of the document. If you don’t have a logo, use clean formatting and consistent fonts to give it a polished look. Your invoice’s appearance can influence how seriously clients take your payment request.

Label it clearly

Put the word “Invoice” in bold, easy-to-read text at the top. Include a unique invoice number for tracking purposes. This could be as simple as “Invoice 001” or something tied to the client or project, such as “SmithDesign_0324.”

Include your client’s information

Include your client’s details directly beneath your information. Use their official business name, address, and contact. This helps them route the invoice to the correct department or person.

Specify the dates

Include both the invoice date and the payment due date. Standard terms are typically 14 or 30 days for payment, but use whatever timeline works best for you. Be specific: “Due in 30 days” can create confusion. Instead, write, “Payment due by [exact date].”

Itemise your services

Break down the work you did in simple terms. List each service or project, its description, the hours worked (if applicable), and the agreed-upon rate. For example:

  • Website design: 15 hours @ £75/hour = £1,125

  • Logo creation: Fixed project fee = £500

List the total amount

At the bottom of the services section, include a subtotal, any applicable taxes or fees, and the final total in bold. This shows the client exactly what they’re expected to pay.

State your payment terms

Tell your client how they can pay you and any specific requirements. Do you accept bank transfers, PayPal, or card payments? Include account details or payment links to simplify the process. If you charge late fees, mention them here to avoid surprises. For example: “A 5% late fee will be applied to payments received after [due date].”

Add any extras

If needed, include notes such as a brief thank-you message or reminders about ongoing work. For example, “Thank you for your business! I’m looking forward to collaborating on the next project.”

Use invoice software or templates

To simplify the process, consider using invoicing software such as Stripe Invoicing, which helps automate calculations, track payments, and maintain records. If you prefer manual methods, downloadable templates from Word, Excel, or Google Docs are another option.

Save and send

Save your invoice as a PDF to avoid formatting issues when sending it to clients. Double-check all details before attaching it to an email. Use a concise, courteous email to accompany the invoice, such as:

Subject: Invoice for [Project Name]

Hello [Client’s Name],

I’ve attached the invoice for [specific project or service]. Please let me know if you have any questions or need further details. Payment is due by [due date].

Kind regards,
[Your Name]

What are common payment terms for freelancers?

As a freelancer, you can use many different types of payment terms to dictate the payment timeline, penalties, discounts, or fee basis. Here are some of the most common payment terms and their benefits and drawbacks.

Net terms

With net terms, clients are expected to pay the invoice within a specific time frame, starting from the invoice date. Net 30, the most common choice, means payment is due within 30 days. Net 7 means payment is due within 7 days. Net terms accommodate clients with standard internal billing cycles, especially larger businesses with structured accounts payable processes. But while net 30 is often considered an industry norm, it can strain your finances. If payments are delayed beyond the due date, this can leave freelancers in a financial bind.

If using net terms, consider starting with net 14 terms for new clients and adjusting based on their reliability. To reduce late payments, include reminders or automated follow-ups a few days before the due date.

Partial upfront payment

With partial upfront payment, clients must pay a percentage of the project fee before the work begins. Common splits are 25%, 30%, or 50% upfront. These terms protect you from non-payment and cover your initial expenses or time investment, particularly for large projects. But some clients, particularly smaller ones, might hesitate to pay upfront without a track record with you.

If using these terms, frame this as standard policy and emphasise that it allows you to fully commit resources to their project.

Milestone payments

With milestone payments, payment is tied to specific project stages or deliverables. For example, you might receive 30% at the project start, 40% after the first draft, and 30% upon final delivery. Milestone payments distribute risk and ensure consistent cash flow throughout the project, especially for longer engagements. But miscommunication about milestone definitions or delays in client approvals can disrupt the payment timeline.

If using milestone payments, define milestones in terms of deliverables and outcomes, not just deadlines. Use milestones for iterative work (such as design or development) to ensure that clients remain engaged and committed throughout the project.

Payment on completion

With payment on completion, the client pays in full once the project is delivered and approved. This can simplify the process for smaller projects where partial payments might feel excessive or unnecessary. But it can be risky, especially with new or untested clients, as you’re relying entirely on their follow-through after you’ve delivered.

If using payment on completion, pair this with shorter projects or clients with whom you have an established history. To minimise risk when working with first-time clients, offer delivery of the final work after payment has been made.

Retainers

With retainers, the client pays a fixed amount regularly – usually monthly – in exchange for ongoing access to your services. Retainers create consistent income and are particularly effective for repeat clients. But scope creep can become an issue if you don’t define what the retainer covers.

If using retainers, specify the hours, deliverables, or access included in the retainer, such as “10 hours of design work per month”. Review the arrangement periodically to ensure it still works for both parties.

Hourly billing

With hourly billing, you track and bill for every hour worked and usually invoice weekly or monthly. Hourly billing is transparent and fair for projects with changing or undefined scopes, but clients might scrutinise your hours or question efficiency. This model also often ties income directly to time, which can limit scalability.

If you choose hourly billing, use reliable time-tracking tools and share itemised fees in your invoice. Set an hourly rate high enough to account for time spent on admin or unexpected project challenges.

Late fees

With late fees, you charge clients extra if they don’t pay by the agreed deadline. For instance, you might add 5% of the invoice total for each month it’s overdue. Late fees incentivise prompt payment and compensate for the financial disruption caused by delays. But some clients might push back or negotiate after the fact, especially if late fees weren’t explicitly agreed upon.

If using late fees, always include late fee policies in your contract and invoices to avoid disputes. Keep late fees reasonable – enough to motivate prompt payment but not so high that they harm the relationship.

Early payment discounts

With early payment discounts, clients who pay quickly – often within a week – receive a small discount, such as 2%–5%. These discounts encourage faster payments and build goodwill, especially with high-value clients. But it cuts into your profit margins, so it’s not ideal for lower-margin work.

If using early payment discounts, offer them selectively, such as for large invoices or repeat clients. Emphasise the savings in your invoice.

Payment in advance

With payment in advance, the client pays the full amount before you begin work. This eliminates payment risk, which can be invaluable for smaller or one-off projects. But some clients might view this as too restrictive or risky, especially if your relationship is new.

If using payment in advance, position this as standard for short-term or quick-turnaround work, where there’s little time for partial payments. Reassure hesitant clients with testimonials or a strong portfolio.

Custom terms

Custom terms are payment terms tailored to the client or project, such as splitting costs over months or tying payments to specific deliverables. Custom terms can help close deals with unique clients or projects that don’t fit traditional models. Make sure to communicate the terms clearly so they don’t lead to confusion or disputes. Document every detail in writing, including who is responsible for what at each stage, and make sure custom terms don’t compromise your financial stability.

How to track and invoice for project-based or hourly work

Tracking your work and billing clients is one of the most important parts of freelancing. Here are some tips to get started:

  • When you onboard a client, explain how you track your work and bill them. Let them know what to expect on your invoices – whether that’s time logs, detailed descriptions, or milestone breakdowns.

  • Whenever possible, share your tracking records with your invoice. For hourly work, you could attach a time report from your tracking app. For project-based work, consider including a short summary of what was completed. This transparency helps prevent disputes.

  • Keep an eye on requests that fall outside the original agreement. If something unexpected comes up, let the client know it will require extra time or cost. Handle this in real time to avoid surprises at billing.

Tracking project-based work and hourly work comes with slightly different considerations. Here are some practical tips for each method of tracking and billing.

Tracking project-based work

Break the project into manageable parts

Before you start tracking, break the project down into actionable steps or milestones. For example, a branding project might include tasks such as research, logo design, and creating a style guide. Assign a fee or estimated hours to each part so you can monitor your progress.

Stay organised with project-tracking tech

Project management tools such as Trello, Notion, or Asana can make a big difference here. Use them to track deadlines, deliverables, and even your to-do list. They make it easy to see where you are in the process and can help you share updates with clients. For freelancers using Stripe, you can also tie these milestones into invoicing by sending partial invoices as each step is completed.

Keep a simple work log

Even if you’re charging a flat fee, it’s a good idea to keep a record of what you worked on and when. Jot down a brief description of your work each day and the time spent. If the client ever has questions, or if scope creep becomes an issue, you’ll have a record to reference.

Double-check the scope before invoicing

When it’s time to bill, revisit your original agreement or contract. Have you delivered everything the client asked for? If changes come up along the way, make sure those are reflected in the final invoice. It’s much easier to handle any miscommunication now, rather than after you’ve sent the bill.

Invoice in detail

When you create your invoice, list each deliverable, a short description of the work, and the corresponding fee. For example:

  • Research and strategy: £500

  • Logo design: £1,200

  • Style guide: £800

End with the total and any applicable taxes. If you’re using Stripe Invoicing, you can itemise these details in your invoice template.

Tracking hourly work

Use time-tracking tech

When you’re billing by the hour, a reliable time-tracker is non-negotiable. Apps such as Toggl, Clockify, or Harvest make it simple to log your hours for specific tasks or clients. Start the timer when you’re working, pause for breaks, and stop when you’ve finished. If you’re using Stripe for payments, many of these platforms integrate directly with Stripe so that you can send invoices based on tracked time and accept payments quickly.

Be specific about tasks

Log the context for each time period you track. Instead of “3 hours of work”, note what you did, such as “Editing homepage copy” or “Client meeting and revisions”. This level of detail clarifies the work for your client and makes your invoice look more polished.

Stay on top of your hours

Get into the habit of reviewing and logging your hours at the end of each day or work session. It’s easy to lose track if you wait until the end of the week, and staying consistent saves you time when you’re making your invoices.

Keep clients up-to-date

If a project is open-ended, check in with your client about the hours you’re putting in. For example, you could say, “So far, I’ve logged 12 hours this week on X and Y tasks”. This transparency prevents sticker shock when the client receives the invoice.

Be detailed in your invoice

When it’s time to bill, break your work down by task. Include the task name, the time spent, your rate, and the subtotal for each task. For example:

  • Writing blog posts: 4 hours @ £75/hour = £300

  • Revising articles: 2 hours @ £75/hour = £150

Consider attaching time-tracking reports as a backup.

How to handle freelance invoice disputes

No freelancer wants to deal with an invoice dispute, but disagreements can arise even with the best clients. Stay calm and focus on resolving the issue without damaging the relationship. Here’s how to navigate invoice disputes with confidence.

Understand the client’s concern

When a client disputes your invoice, their perspective – right or wrong – drives the issue. Start by asking open-ended questions to clarify the problem:

  • “Could you tell me what specifically doesn’t align with your expectations?”

  • “Is there a particular item on the invoice you’d like to discuss further?”

Avoid making assumptions or jumping to conclusions. Sometimes, the issue is a simple misunderstanding about deliverables or payment terms.

Stay calm and neutral

It’s natural to feel frustrated, but emotional reactions can escalate the situation. Approach the dispute like the business conversation it is:

  • Acknowledge their concern: “Thanks for bringing this to my attention; let’s sort it out.”

  • Avoid defensive or accusatory language: “Let’s review the details together.”

By remaining calm, you set the tone for a productive resolution.

Refer back to the agreement

Your contract or written agreement is your best tool for resolving disputes. Politely point to the sections outlining payment terms, deliverables, or project scope:

  • “As per our agreement dated [date], the invoice reflects the [services completed]. I’d be happy to walk you through the details.”

If no formal agreement exists, rely on email threads or other communication to back up your position.

Provide supporting documentation

Having clear records strengthens your case. Share time logs for hourly work, an outline of project deliverables, relevant emails or messages discussing changes to the scope, and any previous invoices and payment confirmations. Transparency shows you’re acting in good faith and makes it harder for disputes to persist without cause.

Find a compromise, when appropriate

If the dispute is minor or the client raises a valid concern, consider offering a resolution that works for both sides. This might mean adjusting a portion of the fee if the client wasn’t satisfied with specific work or waiving small late fees as a goodwill gesture to preserve the relationship:

  • “I understand there was some confusion about the additional revisions. I’m happy to adjust the invoice by [$X] to reflect that.”

If the client is experiencing cash flow issues, consider amending your payment terms. But be cautious about compromising on substantial amounts or letting clients undermine your policies.

Use a mediator if needed

If the dispute seems intractable, consider mediation. A neutral third party – such as a lawyer or freelance advocacy group – can help both sides reach an agreement. Services such as the Freelancers Union in the US or local business associations might offer resources for mediation.

Follow up after resolution

Once resolved, document the outcome in writing to avoid future misunderstandings. Summarise the resolution:

  • “As agreed, I’ve adjusted the invoice to [$amount] to reflect [specific changes]. Payment is due by [new due date].”

Then, update your invoice and resend it promptly.

Know when to stand firm

If the dispute is baseless or the client is acting in bad faith, politely but firmly assert your position. Avoid escalating tension, but don’t let unreasonable demands pressure you:

  • “Based on our agreement and the work delivered, the full invoice amount remains due. Let me know if you’d like to revisit the breakdown together.”

If necessary, remind them of potential next steps, such as legal action or involving a collections agency.

Take preventative steps for the future

Use disputes as learning opportunities. Adjust your processes to prevent similar issues:

  • Include payment terms, scope, deadlines, and dispute resolution clauses in your contracts.

  • Provide progress updates and confirm scope changes in writing.

  • Use time-tracking apps or itemised invoices to reduce misunderstandings.

  • Request upfront payments or partial deposits to reduce financial risk.

Know when to walk away

If a client refuses to pay and your efforts to resolve the dispute fail, it might be time to cut your losses and fire the client. Take note of warning signs for future projects and avoid working with clients who have a history of payment issues. In extreme cases, seek legal advice about your options for debt recovery.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.

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