Freelancing can be a difficult business to master. You not only have to seek out, secure, and service clients, you also have to create a seamless and effective accounts receivable process by using reliable invoice templates. For many independent contractors, the invoicing and collection portion of their business is the greatest struggle.
And last but not least, you might ask yourself, how do I bill my client over email? To help out with that, we included the 5 email templates we trust for years. Keep reading.
Rest assured that the task of getting paid isn’t complicated, but it does require you to be professional and consistent. Read on to see the five required steps to getting paid promptly from your freelance clients.
Most good freelance relationships are based on a contract template. Whether you created one, the client provided it, or you collaborated on a contract that incorporated both parties’ feedback, this is the starting point for billing practices. Your freelance contract should have outlined the important details you’ll need to refer to in your invoice, and it will guide you on the proper billing amount. It may even include extras, such as who the freelance invoice template gets addressed to and how payment will be made.
If your contract is missing an important component needed to promptly bill, you’ll need to go back to the client now – before your first invoice – and get clarification. Ideally, it would be good to have these new details in writing via a contract addendum or new legal agreement. If nothing else, a simple email where you both type out “I agree” in response to the payment terms is sufficient.
Since every client will have a slightly different preference for how they want to be billed, it’s best to set up each first-time invoice for a client as a template. This way, it’s easy to duplicate the original invoice (complete with address, billing contact, payment terms, etc.) and simply update the project details (such as the hours tracked on your timesheet), and the amount due. Our guide on how to make an invoice has all the details you should include. For larger corporations who require extra billing details – such as P.O. numbers or internal line item reference codes – this is the simplest way to save time on what could be a lengthy process each month.
Freelance invoices, one template for each client, can then be accessed easily each time you want to rebill the same client. As client info changes, you can easily update the template so that future invoices show the correct information, too.
Using Bonsai, you can quickly and easily create an invoice template by clicking on "Send an invoice" from your dashboard.
Then, all you have to do is choose your client details (and set up your new client if you're using Bonsai for the first time).
Once done, you'll end up in the invoice template, which you can customize to your needs: set up your details, the client details, and all the invoice items and/or text descriptions.
Finally, just lick on "Send now" and you're good to go! Sign up for a free trial of Bonsai to unlock the full potential and try it out for yourself.
Most invoicing services, including Bonsai, work with third-party payment processors like PayPal or Stripe to get you paid for services directly from the invoice. This offers a huge advantage to freelancers who want to both appear professional and cut down on time between sending out an invoice by email and receiving payment. By giving clients a one-click payment solution and asking for payment in an email, there’s little chance they will forget to pay you or send the money to the wrong account, address, or contact.
If you require payment by check, ensure that your invoice includes everything a client will need to send it. Who should the check be made out to? If your business name is different than the name on your bank account, be sure your invoice indicates so. If you accept Chase Payments, Zelle, or another P2P payment service, include a line about which payment email money should be sent. (Note: Invoices paid with cryptocurrencies are generally more likely to be paid late. Think carefully before accepting Bitcoin, etc.)
Finally, if you would like to be paid via direct deposit to your checking or savings accounts (also known at ETF – “electronic funds transfer”), this will usually need to be set up before your first invoice. Discuss the possibility with the client while in the contract phase, if possible. You’ll be asked to provide a copy of a voided check or the routing and account numbers of your bank account to have this payment option set up. (Only provide this information to a trusted client. You may also choose to have this option take effect once you have been paid a few times and have some to trust the client.)
Each client will likely have a payment schedule that is unique to them. This also means that you’ll need to send out invoices to meet that payment “cycle.” Do they only send out payments once a month? Know what the cut-off date is to send invoices and get paid promptly. Are they open to invoices at any time – or after each project or milestone completion? Know if it’s OK to send freelance invoices as work progresses and how they feel about being billed multiple times in a pay cycle.
You should also know how they handle outstanding invoices. If you bill every 30 days, for example, and payment from an earlier invoice hasn’t been made in time for the next invoice to go out, will you add the totals together? If so, make note that the first amount is being carried over. (This can be labeled as a “balance forward.”) You don’t want to confuse their accounting department by billing multiple times for the same amount due.
The sooner you send out an invoice, the sooner you’re likely to be paid. Keeping cash flow constant depends – in large part – on your ability to keep invoices current. If you are lazy about creating and sending new invoices, you’ll soon find yourself not getting paid in a timely fashion.
If you're billing your clients by email, a strong template can go a long way. Below we shared 5 ready-to-use templates for sending invoices, the exact ones we rely on for years to get paid on time.
The wonderful thing about contracts is that they usually only have to be referred to for results to happen. If you have waited the 30 days from invoicing without payment received – and your contract promises “net 30” for all invoices, you now have standing to contact your client and inquire about payment. You don’t have to be rude when checking in; a simple “I just wanted to ensure you got my invoice and see if you have any questions” should do. Some invoicing tool also include a “remind” button that you just have to click to send a pleasant follow up note. Most clients are embarrassed by the idea of not paying their bills on time, and that is usually enough to get payment your way.
Unfortunately, 29% of invoices are paid late. So, what if you’re kind about checking in and you still aren’t paid? Using the tips above to include that amount on the next invoice is a start. Make a note that you will start charging interest to unpaid amounts (provided that is included in your original contract.) If you don’t get paid within a reasonable time after this, you may consider whether you want to continue providing services. At some point, it may be wise to hold off on delivering more work until they have gotten caught up with their invoices.
If, after several attempts, you still aren’t paid, are given the run-around, or – worse yet – “ghosted” by a non-paying client, you do have some options. You may try going to the head of the company to inquire about payment status. (Often this is a personnel matter and will be resolved once someone in charge learns of it.) A final option may be to enlist the help of a collection professional, provided the amount owed is large enough to cover fees for their services, too. Small claims court is also a valid route, although this can be difficult for clients living in a different state than you.
For freelancers who live in New York City, the recent “Freelance Isn’t Free” regulation may provide some relief. Designed to protect independent contractors from late or non-payment, it can offer relief in the form of court-ordered payments, along with extra penalties relief. If you don’t live in New York, you may want to check with your state attorney general about what options are available to you.
With a proper invoicing process in place, the average freelance should spend no more than 30 minutes per month per client on handling money matters. Unfortunately, due to faulty contract language, inconsistent billing techniques, and lax collection efforts, independent consultants usually spend much more than that. By creating a good process from day one of your business, you can significantly cut down on time spent chasing money and build incredible goodwill with those clients everyone wants the most. Stop worrying about all of that with a free Bonsai trial.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?