How to invoice as a freelancer

What to put on a freelance invoice

Nine fields. The first two are the ones people leave off, and both cause real trouble later.

1. The word Invoice. Without it the document can be read as a quote or a receipt. It is the first thing a finance team looks for.
2. A unique, sequential number. Unbroken, so a missing number is visible as a missing number. Most tax authorities require this; it is not a filing convenience.
3. The invoice date — the day you issued it, which is what the payment term counts from.
4. Your business name and address. Your registered details, not just your working name.
5. Your tax number, where you have one. A VAT ID if you are registered, otherwise whatever your jurisdiction issues.
6. Your client’s legal name and address. The registered name. “Acme” and “Acme Holdings Ltd” are not the same to their finance team, and a mismatch is a common reason an invoice is sent back.
7. A description of the work. Specific enough that someone who was not in the meetings can tell what they are paying for. Dates and quantities where they apply.
8. The amount due, with tax shown separately. A client cannot reclaim tax that is not stated on its own line.
9. The due date and how to pay. An actual date, not “Net 30”. Bank details or a payment link.

If you take a deposit or bill in stages, each payment gets its own invoice with its own number — not one invoice amended twice.

The number in that list has rules of its own — how to number invoices covers the sequence and the gaps. To start from a document that already has these fields, pick one of our invoice templates.

Freelancer, sole trader or contractor — what actually changes

These three words describe overlapping situations and people use them interchangeably. For the invoice itself, most of it does not change. Three things do.

• What your business is called. A sole trader usually invoices under their own legal name, sometimes with a trading name alongside it. A registered company invoices under the company name and carries its registration number. Whichever applies, the name on the invoice has to be the one your bank account and your tax registration use.
• Whether you charge tax. This depends on registration and turnover, not on what you call yourself. Below a threshold you may be exempt and must say so on the invoice — Germany’s §19 UStG rule is one example, and the exemption has to be stated in words, not just left off.
• Who is responsible for the tax and social contributions. An employee has these deducted; a freelancer, sole trader and contractor do not. This does not change the invoice, but it does change what the total needs to cover — the rate you charge is not comparable to a salary.

The word that does carry weight is the one in your contract, not the one on your invoice. If a client’s paperwork calls you a contractor and your invoice says freelancer, nothing breaks.

Payment terms that actually get paid

The terms are the part of the invoice you control, and they matter more than the layout. Agree them before the work starts, in writing, and repeat them on every invoice.

• Set a shorter term than the default. Net 30 is common and slow. Net 14, or payment on receipt for small amounts, moves you up the queue without any argument — most clients pay when the invoice reaches the top of a pile, not when it is due.
• Write the date, not the jargon. “Payment due by 14 September 2026” is unambiguous. “Net 14” means counting, and counting means the invoice waits.
• Take a deposit on larger jobs. 25–50% before starting is normal for project work and filters out clients who were never going to pay.
• Bill in stages on long projects. Monthly, or at agreed milestones. Waiting until the end means carrying the whole risk to the end.
• State a late fee, if you intend to charge one. In the EU, statutory interest on a late business-to-business payment is automatic — you are entitled to it whether or not you wrote anything on the invoice, along with a fixed sum of at least €40 towards the cost of chasing. Stating your own terms is still worth doing: it makes the expectation explicit and changes how the invoice is read. A fee you set yourself, rather than the statutory one, generally does depend on having said so in advance.
• Name the person, not the company. Send it to whoever approves payment, and copy their accounts address. An invoice sent to a generic inbox waits for someone to claim it.

Send the invoice within a day of finishing. The gap between the work and the invoice is the gap in which a client forgets how much they valued it.

Billing by the hour or by the project

How you bill changes what the invoice has to prove, and it is worth deciding before the work rather than at the end of it.

• By the project. One agreed figure for a defined scope. Simplest to invoice — a line, a description and the amount — and the risk sits with you: if the work takes twice as long, you absorb it. It needs the scope written down somewhere, because every dispute about a fixed price is really a dispute about what was included.
• By the hour or the day. The invoice has to show the rate and the quantity, and it has to be backed by something. Keep the record as you go rather than reconstructing it the night before — a client who queries a fifty-hour line will query it in detail, and “about two weeks” is not an answer.
• On retainer. A fixed sum each month for agreed availability or a block of hours. Invoice it on the same date every month, in advance, and say what happens to unused hours. Retainers go wrong when nobody wrote down whether they roll over.
• Extra work outside the agreed scope gets its own line and, ideally, its own written approval before you do it. Adding an unexpected line to a final invoice is how a good project ends badly.

Whichever you use, the invoice should let someone reconstruct the number without asking you. That is the test the description has to pass.

Invoicing a client in another country

Cross-border work is the situation most invoicing guides skip, and it is where the tax handling actually changes. Three things to get right.

• Whether you charge tax at all. For business-to-business services inside the EU, the tax usually shifts to the client under the reverse-charge rule: you invoice without VAT and state that the reverse charge applies. You need their valid VAT ID on the invoice to do this.
• What you must write on the document. When the reverse charge applies, saying so is a requirement, not a courtesy. Both VAT IDs go on the invoice.
• Which currency, and who absorbs the conversion. Invoice in the currency you agreed. If you invoice in theirs, the exchange rate and the transfer fee come out of your side unless the contract says otherwise — say which in the terms rather than discovering it on the bank statement.

Rules differ by country and the details matter. If your client is German, the mandatory fields and the small-business exemption are set out in the guide to invoice requirements in Germany. If they are Austrian, the guide to invoice requirements in Austria and the guide to invoicing in Switzerland covers the same ground.

Invoicing through PayPal, and what it costs

PayPal will generate and send an invoice for you, and for a client who already uses it that is the shortest path from sending to paid. What it is not is free: the fee comes off the amount you receive, and on a cross-border payment there is a currency conversion on top of it. On a small invoice that is noise; on a four-figure one it is a meaningful share of the job.

The practical answer is to treat it as a payment method rather than as your invoicing system. Issue the invoice yourself so the numbering stays in one sequence and the record stays yours, then offer PayPal as one way to settle it — and price the fee in if you expect it to be used.

When an invoice goes unpaid

Most late payments are administrative rather than hostile — the invoice is sitting in someone’s inbox. Escalate calmly, in this order.

1. The day after it is due, send a short reminder. Attach the invoice again. Assume it was missed, because it usually was.
2. A week later, ask a person. Phone or message whoever commissioned the work rather than the accounts address. They can find out where it is stuck.
3. At two weeks, put it in writing. A formal notice naming the invoice number, the amount, the original due date and any late fee you stated.
4. Then stop the work. If a project is running, pausing is more effective than another email and is the point at which most genuinely stuck invoices move.
5. Last, the formal routes. A letter before action, a small-claims procedure, or a collections service. Rarely needed and rarely worth it below a few hundred, but the fact that you will do it changes the conversation.

When to stop doing this by hand

A document per invoice works until it does not. Honest markers:

• More than about five invoices a month
• You have reused an invoice number, or you are not certain you haven’t
• You cannot say from memory which invoices are unpaid right now
• You are chasing payments manually and it is taking real time
• You charge more than one tax rate, or invoice across borders

If you are producing invoices in a spreadsheet today, the mechanics and the traps are covered in the guide to making an invoice in Excel.

Frequently asked questions