Although companies don’t necessarily have to issue invoices for B2C transactions, it’s incredibly unusual to be able to accept payments as a freelancer without giving your client a professional, legally valid invoice.
A lot depends on state regulations, but generally, you will need to create invoices manually or use a freelancer invoice template to ensure you have the appropriate documents. Some states require companies to issue receipts for payments received, but that applies primarily to online purchases by private consumers rather than self-employed freelance professionals.
Why Are Invoices So Important for Freelancers?
An invoice isn’t solely an administrative exercise or a way to keep track of your payments owing and received; it’s also a legal record of the services you’ve delivered and proves a debt due.
Freelancers use Invoice Ninja for invoices because they can customize their paperwork, provide one-click payment links, and even bulk issue invoices to reduce the time they spend on bookkeeping and compliance with record-keeping requirements.
Here is a recap of why you should ensure you issue an invoice for every client transaction, whether it’s receiving a monthly retainer payment or sending a bill for a particular service.
Client Communications
As a freelancer, much of your reputation and credibility rely on the interactions you have with your clients and whether they’re happy to use you again or recommend your services.
Creating invoices professionally, quickly, and efficiently ensures the client is satisfied with your service, can clear accounts owing promptly, and knows they can rely on you to send valid, comprehensive documentation.
Tax Records
When you file your tax returns, you may need to provide evidence of the income you have received. Non-declarations are an offense and can carry severe consequences, so keeping a clear record of invoices and payments received is essential.
If you’re filing your own returns, you can use your invoice records to enter accurate information. Alternatively, you can pass invoices to your accountant to handle your tax obligations.
Payment Tracking
Freelancers, like all businesses, may need to chase clients for payments from time to time. Most often, a late payment occurs because the client is busy, has forgotten to clear an invoice, or has yet to approve the paperwork with their accounts payable department.
However, if you don’t have any paperwork and can’t prove when you created an invoice or how much is owed, you might have difficulty working out who has an outstanding balance. Providing a copy invoice and statement is the most professional approach, where you can resend documents to your client to politely remind them that you have outstanding payments.
Legal Evidence
In those rare occasions where a freelancer and client relationship turns sour, it could be necessary to provide copies of your invoices and evidence of submission to ensure you can recoup bad debts through your local court system.
Small businesses have recourse to chase debts, whether a client has refused to pay or disputed the transaction value–but you must have valid, legally recognized documentation to back up your claims.
Business Organization
Lastly, as a freelancer or self-employed business owner, you likely deal with every aspect of running your organization, from marketing to admin, bookkeeping to budgeting. We recognize that self-employed freelancers work hard and often cover varied roles, so keeping your paperwork and admin organized provides countless benefits.
Creating digital invoices and transmitting them securely to your client means your invoicing takes a fraction of the time it would take to issue paperwork manually and ensures that, if you need to check whether a payment has been made, you have all the information you need at your fingertips!
