As a freelancer, invoicing is one of the most important administrative tasks you need to manage.
It’s how clients know the work is done; it’s how clients know what work you have completed; it’s part of your overall accounting system that tracks the work you did and the payment received; and most importantly, it’s how you get paid.
As a freelancer, you probably take on different types of jobs. For a small, one-time job, a regular invoice at the conclusion of the work will suffice. But for larger projects, in which you’ll be spending months of your time, you won’t want to wait until the end of the project to get paid.
That’s where an interim invoice is valuable.
An interim invoice is how you break the payment for a project down into multiple payments. And if you’ll be doing large pieces of work on a regular basis, it would save you time to have an interim invoice template.
So whether you use a professional freelance service or you handle all your administrative work on your own, let’s explore the 4 things you need to know about an interim invoice template.
1. What exactly is an interim invoice template?
An interim invoice template is a document that you can use anytime you take on a large project covering several months or pay periods. By having a template ready, you can simply open the document and make a few changes before sending to your client.
The interim invoice is a system of splitting a large project into multiple payments, which usually correspond to the completion of specific parts of a project, to milestones in the work, or to an agreed upon payment schedule. They are sometimes called a progress invoice.
An interim invoice is not the same as a recurring invoice, which is intended for use when you complete the same type of work on a regular basis, such as what would happen when you enter into an agreement to work on a retainer.
2. What should be included in an interim invoice template?
While an interim invoice is slightly different than other types of invoices, there is some information consistent across invoices that you can include in your interim invoice template.
For instance, you’ll need to have your business and contact information, a logo and website if appropriate, and how you accept payment.
You’ll also need a spot where you will insert the client’s business information, contact information, and the person to whom invoices should be directed.
You’ll also need a spot for an invoice number, as well as two dates that you will update each time you create an invoice: the date the invoice is issued and the date that payment is due. And then there are the spots reserved for the work done, the amount due for each service, any extra costs like expenses and taxes, and the total amount due.
Payment terms should also be clearly outlined on your interim invoice template. These should be the same for every client and every amount of work you do.
3. What information is specific to an interim invoice template?
Since interim invoices cover off large projects, your template will likely have to be updated each time you need an invoice. However, if you do project work on a regular basis, you can create an interim invoice template for each client, so that the customer information is part of the template and doesn't have to be updated every time you create an invoice.
Each interim invoice is usually based on the proposal or contract document that outlines specific milestones and payment schedules for the project. The schedules are usually derived from the project estimate that you and the client have agreed upon, and most often include payments on a monthly or quarterly basis.
Then you simply open your interim invoice template, update the necessary information such as date and invoice number, and insert the work completed and the necessary fees that are due.
The actual payment due may be based on specific work being completed. Or, perhaps you and the client have agreed that you’ll receive the same amount of money at certain times during the project, meaning your interim invoice template can have the same payment information, making the invoicing process even quicker.
4. Why is it beneficial to have an interim invoice template?
If you do larger projects for clients on a regular basis, having an interim invoice template will speed up one of your most important administrative tasks. You’ll be able to simply open the template, update a few areas, and send the invoice off to the client.
For large projects, an interim invoice system helps you to maintain a steady cash flow.
You won’t have to wait for the conclusion of a large project to get paid, particularly if it’s one that is taking much of your time and preventing you from working for other clients.
Having an interim invoicing system can be positive for clients too, giving them more flexibility in taking on large projects. If your client is a small business, for instance, they won’t have to pay up front for a large project. Work can be broken down into more manageable chunks, including the payment for that work.
Interim invoices also help ensure you actually get paid. As you invoice a client regularly, you’ll find out quickly if there are any payment issues. You wouldn’t want to finish a large project only to find out the client is delinquent at paying for services.
If the client is delinquent with interim invoices, you can deal with the problem before you have spent too much time with one client. As the client pays you consistently, you can be confident you’ll be paid in full. On the flipside, if you have contacted the client about non-payment and it continues to be an issue, you can make the determination to cancel the project before you have put in the full amount of time and effort.
Clients are also reassured that the work is getting done, since you’re submitting work on a regular basis before you get paid, making interim invoicing a win-win for you and your clients.