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How to bill a client: the complete guide

Last editedApr 20223 min read

When it comes to maintaining cash flow and building the income your business receives, few things are as important as understanding how to bill a client for money. Building sales, bringing in new customers and marketing the goods and services you offer are all vitally important, but if you don’t know how to bill a client effectively, your hard work won’t deliver the income stream it should.

Too many businesses become insolvent because they are owed money by customers. Understanding how to bill a client in an effective and professional manner will help to ensure that this fate doesn’t befall your business.  

1. Create an invoice 

A major part of how to bill a client properly involves putting together a professional, detailed invoice. The invoice is a document that details exactly what you’ve provided for the client, the terms on which the work was done or the goods provided, and the amount it was agreed they would pay.

This means the customer has no excuse for underpaying, paying too slowly or not paying at all, and also that you have a comprehensive account of the work for your own records. The details on any invoice should include the following:

  • the name and address of your business – this is basic information but ensures the customer knows exactly who the payment is being made to

  • the name and address of the client – this will be particularly useful in terms of your own records, such as at year end when you are collecting together the work you’ve delivered to ascertain which of your clients has proved to be the most lucrative

  • reference number – giving each invoice a unique reference number will make it easy for you to track invoices through your own billing systems. It will also give you something to refer a client to when contacting them that confirms an invoice has been received

  • date – the date on the invoice should be the date on which you send it to your client. This date can then be used as a reference point when dealing with late payments

  • due date – in addition to the date the invoice is sent to the client, you should always include the date on which the payment is due. In many cases this will be a set period – it could be seven or 30 days – from the invoice date itself

  • terms of payment – this sets out when you expect to be paid. In most cases, this will be within a certain payment period. The payment terms on an invoice can also set out what will happen if a payment is late, in terms of any late payment fee or interest charges

  • payment methods – listing the payment methods you accept will make it easier for a client to pay, and more likely that they’ll do so using one of your preferred methods. The more methods you accept – from bank transfer to credit and debit cards or digital wallet payments – the easier it is for a client to pay on time

  • list of services – it’s vital the client understands exactly what they are being asked to pay for, which is why every invoice needs to include an itemised list of services. This could be a breakdown of the hours you’ve worked, the services you’ve delivered or the goods provided. The more detail it contains, the more understanding the client will have of what they are being asked to pay for

Sole trader invoice template

What follows is a template for an invoice for a sole trader, containing all of the details needed to bill a client. More templates – such as one for a limited company – are available here.

Company name Company address

Registered company number: Contact telephone number: Email:

Invoice number: Date of issue:

Limited Company Invoice

Invoice

Customer Company name

Customer Company address

For the attention of: e.g Mr Joe Bloggs

Payment due:e.g 01/01/18 16:00

Goods /service providedHourly rate/unit priceHours worked/QuantityCost / Total

e.g. Sports activity sessions£25.00 p/h15 Hours £375.00

Payment terms:

the contractual element of the trade and the number of credit days agreed (for example, 30 days)

Payment options:

For example: Pay Now (clickable link to online payment platform if an e-invoice), bank details for payment via Bacs transfer, credit cards accepted

Thank you. We appreciate your business. Include some polite words of thanks.

2. Payment options 

Make it as easy as possible for the customer to pay the invoice by offering the widest possible range of payment options. Working with GoCardless means you can accept payment via methods from credit and debit cards to digital wallets, bank transfers and direct debits.

3. Send the invoice 

Having put an invoice together, you need to send it to your customer, either as a hard copy or an electronic attachment to an email. Contact the customer shortly afterwards to make sure they have received the invoice, customers might sometimes claim not to have received an invoice to delay payment, or it could actually have gone astray. 

4. Chase payment

Part of knowing how to bill a client for money is realising you have every right to chase late payments without feeling you’re being unreasonable. Make sure the payment terms are clearly set out on the invoice and explain to the customer that interest will be charged on late payments. Send a reminder by post or email, but keep the tone polite, and if the worst comes to the worst, point out that you have the right to take legal action.

We can help

If you’re interested in finding out more about how to bill a client, get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments

Over 70,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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