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How to bill clients as a freelancer

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedApr 20222 min read

The golden rule of how to invoice a client for freelance work is to make it as easy as possible for them to pay. This starts by agreeing on a process for payment. You then need to implement that process effectively. Even so, you may still need to follow up on missed payments.

Agreeing on a process for payment

For small jobs, you may be happy simply to invoice your client once the job is complete. For larger jobs, however, it’s advisable to request payment at certain milestones along the way. Depending on the nature of the project, this could be after a certain number of hours or when certain sub-goals are met.

Keep in mind that billing in arrears is essentially the same as providing your client with credit. You should only do so if you’re confident they can repay it. What’s more, the amount of credit you lend should reflect their creditworthiness.

If you anticipate regularly taking on high-value jobs, it may be worth registering with at least one credit bureau. That way you can credit-check prospective clients and report any issues with non-/late-payers. For lower-value jobs, a visit to the Companies House website may give you all the information you need.

If you’re unsure about a company, you may wish to take a deposit before proceeding. If the company is unhappy about this, you could use a freelancing platform as an intermediary. This would allow the company to put its money in escrow rather than give it directly to you. There is usually a cost for this but it can be worth it.

The importance of written contracts

On a similar note, with smaller jobs, it may be fine to proceed on the basis of a brief and an agreement to pay. Even then, it’s better to have the agreement in writing and to keep it until any chargeback period has ended. With higher-value contracts, it’s vital to have a clear and robust contract in place.

For many freelancers, the easiest way to achieve this is to have a standard client agreement template that you customise as necessary. You’ll often find all the information you need to create one on the internet. Look for websites that cater to people in your profession.

For more niche occupations, it may be advisable to get input from a lawyer. For particularly high-value transactions, it would be safest to have a lawyer draw up a contract, or at least double-check the one you intend to use.

The mechanics of billing clients

The mechanics of how to bill clients as a freelancer often depend on how much freelancing you do. If you only freelance on a very small scale, you may be fine just creating and sending invoices manually. If you’re doing anything more than that, you’ll probably benefit from using accounting software.

Regardless of how you create and send your invoices, it’s important to ensure that they include the correct details. If you’re registered forVAT, you’ll need to follow the rules for VAT invoices. Likewise, if you’re fulfilling a purchase order, you need to include the PO details. You also need to ensure that it goes to the right contact.

Choosing payment methods

In the business to consumer world, there is an argument for offering multiple payment methods. This can help entice customers to make a purchase. This does not, however, really apply to invoicing as the purchase decision has already been made. It’s therefore generally better to keep it simple.

For modern freelancers, often the best solution is to put clients on Direct Debits. These can be created either via the GoCardless dashboard or by using GoCardless with accounting software (such as Xero). With Direct Debits, you and the client agree on a charge date. You then just set up the payment and leave it to be collected automatically.

Using Direct Debits can significantly reduce administration. It can also minimise, if not eliminate, issues with payments being delayed or missed completely. Direct Debits do need to be created at least three working days in advance of the charge date. If you need payment faster, Instant Bank Payments may be a better option.

We can help

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