Tracking and billing time is an inevitable task for independent consultants. Whatever billing method you choose, you want to present a reputable, professional invoice to your clients.
Establish billing policies and procedures for your solo business. Your billing policy should include: rates, billing method (paper or electronic), timing of invoicing (weekly, monthly, at project end), time to pay, preferred payment method, and late fees. Having a standardized set of rules will simplify your billing and help as you evaluate client contracts.
However, even with an established policy some client contracts may differ. In addition to having your own, it is critical to understand your clients' billing policies. Make sure that policies are outlined up front so that you can present a bill that is compliant. For example, some clients may require a paper invoice and a longer time to pay than your standard billing terms. Knowing that in advance, will allow you to make the appropriate adjustments or negotiate the terms with your client before you bill.
Client Friendly Process
Remember your audience when preparing invoice. You may or may not know the client contact reviewing your bills. In some cases there may be multiple levels of review or invoices may be processed by a third party vendor. Avoid the use of industry jargon or abbreviations in your descriptions so that anyone reviewing will understand what is being billed.
Track Your Time
Even if you bill by the project or month, it is always a good idea to keep a record of time spent on client tasks. As a best practice always record your time immediately. This will ensure that your records are both up to date and accurate. You can track time using time and billing software, apps for your smartphone or even a simple notebook.
The detail of your invoice may vary by industry or client requirements but it is important to include:
To avoid billing conflicts, always have a signed agreement on file that articulates the billing process and terms. In some countries you are required to use the words "Tax Invoice." Be sure to confirm invoicing requirements with your local tax authority.
When it comes to preparing professional invoices, you have a number of options. You can create a simple invoice template using Word or Excel. This is an easy, low cost process. Alternatively you can use time and billing software such as QuickBooks or cloud-based services such as Freshbooks or even PayPal to prepare and send client invoices. Many programs also offer apps that allow you to manage billing and payment from your mobile device. Banks and credit card companies today also offer invoicing services for their small business customers.
Whether you choose to bill by paper or electronically, remember that every client touch point reflects your brand - including your invoices. Always present invoices that are accurate, timely and free of errors.