What Is An Ad Hoc Invoice?

When it comes to invoicing, frequency matters. Whether you’re a small business or freelancer, sending invoices in a timely manner helps ensure a steady cash flow. One of the first decisions you’ll need to make is whether it’s better to process invoices on a monthly or ad hoc basis. Keep reading to learn about the ad hoc invoice meaning as well as its pros and cons.

Ad hoc invoice meaning

An ad hoc invoice is one that’s not sent according to any schedule. Instead, you issue your invoice to the client as soon as work is complete. Ad hoc invoicing makes sense for freelancers who complete a series of one-off or variable jobs rather than for ongoing work. By submitting your ad hoc invoice to the client as soon as work is completed, you will get paid faster than waiting until the end of the month.

Monthly invoice meaning

By contrast, a monthly invoice is one that’s sent at regular, recurring intervals. This is the more traditional form of invoicing. Many industries operate according to a monthly accounting calendar, which means monthly invoices make sense. Legal professionals and consultants typically follow this invoicing frequency to account for ongoing work. When you’re working on a larger project, submitting regular monthly invoices encourages steady cash flow and makes it easier to reconcile your accounts.

When to use ad hoc invoices vs. monthly invoices

There are pros and cons to both ad hoc and monthly invoicing systems. The best choice typically boils down to the nature of your work and complexity of invoices.

Monthly invoicing is best for larger, ongoing projects, giving you the benefit of receiving a larger lump sum each month. Furthermore, it means you only need to worry about invoicing once a month which is handy from a scheduling perspective. Yet on the other hand, it can also lead to payment delay because you’re leaving more time between the completion of a project and the invoice due date.

An ad hoc invoice is best for smaller, one-off projects or freelance work. You bill the client as soon as work is complete, encouraging faster payment and smaller boosts to cash flow throughout the month. This works best if you have a series of projects coming in, ensuring invoices don’t get missed out at the end of the month. However, it requires consistent admin to keep on top of invoicing and chasing up on payments.

To choose the best system, you should ask yourself the following questions:

• What invoicing method is standard for my industry? For example, copywriters typically send ad hoc invoices, while architects send monthly invoices.

• How big is the project? If the project lasts only a few days, an ad hoc invoice will usually be the better option.

• What cash flow challenges am I experiencing? If you’re finding it difficult to manage injections of cash, a larger monthly lump sum might be the better option.

How to send an ad hoc invoice

Ultimately, there’s no right or wrong answer when it comes to the type of invoice you send out. Many businesses opt for a combination of monthly recurring invoices for their main clients and ad hoc invoices for smaller jobs. In both cases, you can help minimize errors and keep on top of the invoicing process by using automated software. Store client details for repeated work, turn quotes into invoices, and use a series of professional templates for uniformity.

You can also automate the payments process using GoCardless, which is perfectly suited to both recurring and ad hoc invoice payments. Businesses can collect invoice payment directly from the client’s bank account via direct debit, cutting down on the awkwardness of chasing up on late payments. In fact, GoCardless customers get paid 47% faster, spending 59% less time managing their payments. This not only improves cash flow but reduces stress for both business and client.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.