Avoid invoicing mistakes

Self-employment brings you freedom in an extensive number of ways, but as the saying goes, “with freedom comes responsibility”. In this case, your investment increases, workload increases, and a lot of the time, pressure also mounts, and stress increases.

One such pressure point is billing and invoicing. Invoicing may appear to be a simple, mundane activity that does not require your whole focus, but actually, it does. It is the last stage of your primary operational activities and is of paramount importance.

Clear, accurate, and professional billing methods ensure that a client knows exactly what to do when the invoice is received. That will, in turn, result in prompt payment. 

Make sure you are well-equipped to send out invoices on time, get paid swiftly, and enhance your cash flow. If you’re a freelancer, it’s a good idea to become aware of some of the most typical freelance invoicing errors.

Here is a list of a few frequent billing errors and avoiding ways to:

1.  Invoice Generators Are Not In Place

Even if you have a lot of time to spare when it comes to creating and mailing invoices, it’s still a good idea to use a freelancer invoicing system.

In general, if you don’t have any clear invoice generators in place, this could be the mother of all billing errors.

When you utilize an invoice generator, you reduce the chances of errors and increase efficiency. You also get uniformity in your invoice designs and templates with a set structure in place that these invoice generators provide.

Invoicing generators assist you with the following tasks:

  • Generating accurate terms and conditions part that highlights your working policy in a concise manner.
  • Making invoices that are elegant, straightforward, and professional-looking.
  • Having a well-organized schedule for creating and sending invoices.
  • Putting a system in place to review invoices.
  • Back them up following up on late payers.

All of this can be done on your own, but it will take more time and work. You can also utilize online invoicing software like Refrens to complete the task in a matter of minutes.

2.  Poorly Written Service Descriptions

It’s simple to assume that the client is aware of every tiny project activity or work that will be undertaken. This isn’t always the case, though. When you write very basic service descriptions, you risk causing the client confusion and criticism.

Break down each job into pieces and provide a brief overview of each work to itemize your invoice. This will offer you a clean and accurate project payment summary for your records as well as your client’s.

It depends on your business how you itemize your bills, but it’s an important part of invoicing if you want to get paid on time because it lets your customers know exactly what they’re paying for.

3.  Missing Out On Important Details

One of the most typical invoicing errors is including incomplete information on your invoices. Every invoice must include certain essential facts, which are frequently mandated by various state and national legislation.

I’m sure you don’t want even the possibility of legal issues, so make sure to NOT omit these crucial data. You also appear less professional as a service provider, which may give the impression that you are unprofessional.

Critical invoice details such as a unique invoice number, basic details of the client (name, address, etc.), your name and address (other crucial details, if any), tax-related details, payment terms, and the outstanding amount (of course, relevant currency).

4.  Failing To Differentiate Between Invoice Types

If you don’t explain clearly what type of invoice you’re sending, the client may become confused, resulting in delays and possible payment issues. It’s tempting to assume that there’s only one form of an invoice, especially if you’re a new freelancer. There are quite a few, in fact.

The regular invoice, a deposit invoice, a progress invoice, a repeating invoice, a proforma invoice, a time-billing invoice, and other types of invoices are among them. Simply search the invoice type at the top of the page and make a note of it in the conditions or payment box.

5.  Failing To Delegate And Distribute Workload

Invoice preparation and distribution should not take up a lot of your time. If the invoicing and payment process is overwhelming, assess whether you need improved tools and procedures.

An invoicing software of great quality may make your life a lot easier by giving a plethora of options that make invoicing and getting paid much easier.

Aesthetic templates and third-party APIs capabilities are just a few of the features available, which also include invoicing time tracking tools, secure client-side portals, a variety of automation systems, and much more.

6.  Failure To Sign A Contract

Sir Richard Branson’s words of wisdom are as follows: “In an ideal world, an entrepreneur or CEO would only need a handshake to conclude a contract with a business partner.”

However, because business conditions can change due to the economy or consumer preferences, it’s to your best advantage to have a formal contract to prevent yourself from being played rather than paid.

First and foremost, you should have Terms and Conditions in place that set out all of your late fees, pricing, and other product and service specifics. Having your client’s sign a basic agreement secures both parties and ensures that they are in total agreement with respect to payments.

In case, if you’re not willing to or are not able to sign a contract with your client, not to worry, we have you covered. You can opt for an invoice generating platform, like Refrens that already has terms and conditions in place for both parties.  

This will ensure that you get fully paid for your hard work and will boost your client’s confidence as this shows your professionalism

7.  Failure To Provide Incentives & Start Part Payment Model

Simultaneously, you should encourage your clients to pay their invoices promptly, or even ahead of time. This will assist you in maintaining a healthy cash flow by ensuring that your cash cycle does not come to a halt.

Offer customers a discount if they pay the bill before it’s due, often known as a rebate in accounting terminology. Gift vouchers or a lenient credit policy on their future purchase/contract with you could be used as additional incentives.

Another way of boosting your cash flow is to adopt a part payments model. This model ensures a regular cash inflow that can help you better manage your working capital. The most crucial aspect of this model is that it is customizable.

You can distribute a payment into two, three, or maybe even four payments, depending upon the size of the project. For a client as well it will be an easier model considering the fact that it is always easier to invest money in smaller chunks rather than going all-in at one point.

8.  Failing To Personalize Your Bills

Did you know that including a company logo on your invoice increases your chances of getting paid by almost three times? Because a logo identifies your company as a professional and well-known brand, it sets you apart from the other invoices your clients receive.

It’s also an amazing way to promote your brand. Aside from your logo, make sure your colors, fonts, and designs are consistent with your brand. Make an invoice with one thing in mind: the agent for your brand.

9.  Failing To Use Your Invoice As A Tool For Promotion

While getting paid is the primary purpose of your invoices, they may also be utilized as a marketing tool to boost income.

Don’t be hesitant to add marketing items in your invoices, like flyers or email newsletters. Discounts for future work or items, as well as referral bonuses, are effective.

Requesting testimonials or referrals, as well as including a brief testimonial on the invoice, is effective promotion. These might not look that big of a deal but have a great psychological impact.

10.  Ignorance About Invoice Factoring

It is a rare sight to see clients pay on time in a bearish market and in few industries, it is some sort of norm to assume a grace period of 3 days. So, this delay in payments might hinder your day-to-day operations.

Otherwise as well, it is always good to be prudent in business. Hence, late payment terms and conditions should always be conveyed to your clients through invoices. Always mention late payment fees in T&C. Yes, mention late fees, ALWAYS!

You can waive it off later on, but mentioning it in the invoice sends a message that late payments are not tolerated.

However, if and when you’re in desperate need of excess cash. Then invoice factoring, also known as bill discounting, is a common option in which you sell unpaid invoices to a factoring company in exchange for cash.

While invoice factoring might be a lifesaver when you’re cash-strapped, many firms don’t completely comprehend it. Make sure you’re aware of the fees you’ll have to pay if you don’t fulfill the minimal requirements before going this way.


You need to understand that as a small business owner and/or as a freelancer, you are already slumped in work. Delegation and distribution of your work will ease out your work life considerably.

In addition to that, if you equip yourself with modern invoicing tools like Refrens, you’ll be able to figure out a better and seamless flow of your operational activities. In addition to smooth billing and invoicing activities.

Not to forget, it will take one task off your plate, which in turn will enable you to focus on the crucial aspects of your work. Leading to more room for the development and growth of your freelancing career.

Author Bio

Hetvi works as a Product Associate at Refrens.com – Online Invoice Generator & India’s most powerful platform for freelancer’s growth. She has worked for some renowned companies as a Brand and Digital marketing associate. You can follow Refrens.com on Twitter, LinkedIn, and Instagram.

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