For freelancers, getting paid on-time is of the utmost importance. A clear and detailed invoice encourages timely payment and provides an important financial record for both you and your client. It also lets clients see exactly where their money is going, decreasing the chance of misunderstandings and payment disputes. An itemized invoice can help you accomplish this.
Many freelancers keep invoice details to the bare minimum. If you do this, you might have a single line item in your invoice where you label what the general service provided is. This is written as a simple description, a quantity, the per-item price, and the total price.
For example, if you’re a freelancer copywriter, you might write “website page copywriting services” and put the quantity at “5” suggesting five pages in total.
If you’re a virtual assistant, you might write “file management” or “transcription of audio files”, together with the number of hours involved.
The trouble with this way of writing invoices is it leaves out important information beneficial to both you and your client. It can also lead to confusion, scope creep, and ultimately broken client-freelancer relationships.
How to Itemize an Invoice
A better alternative is to itemize your invoices and add more details about what each individual service includes.
If you’re a freelance blogger, for example, you might create separate line items for each blog post in a particular contract.
Instead of a single line item describing your service as simply “blog post” with a quantity, each post would have its own line in your invoice. You might include the post titles there if they were pre-approved, or you could mention each post’s topic. You could also include the contracted word count range.
When you itemize in this way, the benefit for the client is they’re reminded of exactly what they ordered when they later review their records. They don’t need to wonder when they paid you a specific post, or if you delivered it. Everything’s mapped out in detail.
Using another example, a virtual assistant might create separate line items for each service and even facets of one service. Instead of merely writing “file management”, the VA could include “Dropbox drive organization”, “data entry in Google Docs” and “preparing Jim’s PowerPoint presentation”, along with some more brief relevant details.
The benefit for you as a freelancer is you get a secondary sign-off in writing from the client for every specific piece of work you do. If you bill fully or in-part upfront, this is in addition to any email sign-off or written contract. This makes it much easier to defend yourself if there’s ever a dispute later where a buyer says “that’s not what I ordered.”
Itemizing Add-On Services
Itemizing an invoice can also help when providing various add-on services to the primary service or services. For example, as a freelancer blogger you might source images or monitor blog comments, beyond the standard writing of the post.
Rather than invoicing for one blog post and including all the add-ons in your total agreed-upon rate, you would have line items for writing the post, one for images, one for any promotion agreed to, and one for comment monitoring and replies. Each line would then have more detailed descriptions of each service feature.
This benefits both you and the client. The client knows exactly what they’re getting. And you have a clear record of all responsibilities for a given project.
Further Benefits of Itemized Invoices
But there’s another benefit. Itemizing also reminds your client that the overall scope of their project is adjustable. That might not sound great on the surface for you as a freelancer. After all, clients could decide to cut those add-ons later when they’re reminded of the added cost.
However, think of the client’s position if they ever find themselves in a financial crunch. If they only think in terms of total project fees, they might be inclined to cut back on the number of posts ordered or replace you entirely, opting instead to hire a lower-priced competitor.
So this itemized reminder actually has the potential to save those working relationships by emphasizing your flexibility. Instead of replacing you, the client can cut back on add-ons permanently or temporarily to suit their current financial situation.
Writing invoices is an important and inescapable facet of running your own business. It shouldn’t be rushed or written with the bare-minimum of information. A well-written and itemized invoice can mean the difference between getting paid for all the hard work you’ve put into a project and losing out because a client refuses to pay for a particular service feature that wasn’t clearly and accurately laid out.
A few extra details in writing can save you and your client from frustration, friction, and ultimately a broken professional relationship.
