New to invoice templates? Read our guide below.
It could be argued that the most important aspect of running a business is getting paid. As a freelancer, that means getting paid promptly for your services.
Getting paid keeps your business running smoothly, ensures your expenses are covered, and that you can pay yourself a salary. You need to live, after all!
In order to get paid, your clients need to know what work you completed, what they owe you for that work, and when they have to pay it.
That’s where invoicing comes in.
Invoicing is one of the most important aspects of running a business, so you don’t want to leave it to chance. You need to do it properly, do it well, do it in a timely fashion, and follow up when needed.
Using an invoice template can make your life easier, but there are some key considerations about using a template.
What is an invoice template?
A template is a document or file that creates a starting point for a new document that will be used over and over again. A template can be created with information that will be used every time you need to create a certain type of document. An example of the information would be your business name and address.
An invoice template, then, is a document that is pre-loaded with the information that would be included in every invoice you would create. You simply open the template, which would have that reusable info like your business name. You then add any new information like the work completed and payment amount, and save it with a unique identifier like an invoice number.
Why use an invoice template?
Here are some great reasons:
- Save you time by creating a reusable document.
- Create consistency in your invoices.
- Create a numbering system that allows you to track what’s been paid and what hasn’t been paid.
- Add your business brand to the invoice.
- Provide clarity to your client, communicating the work completed and the payment due for that work.
An invoice is much more than a document that tells the client you must be paid. It’s true that it establishes an obligation on the part of the client to pay you for services. In this way, it’s a verification of the agreement that you have reached when bidding on the work or agreeing to a contract.
It also creates what’s called an account receivable, which is part of the bookkeeping and accounting of your business. It establishes a record of work completed and payments rendered. It’s important as part of running your business, including at tax time.
It notifies the customer that it’s time to pay up, and it also notifies them what happens if they don’t pay. After all, you can include notification of a late fee, which can be a flat rate or a percentage of the project cost. If payment isn’t received, a follow-up invoice will include the late fee as part of the total cost.
You can’t assume that the customer will pay you without sending an invoice. And you certainly can’t expect to receive a late fee without clearly stating that there will be an additional charge for delayed payment.
Types of invoice templates
Besides a standard invoice that simply asks for payment for a certain item of work, there are a few specific kinds of invoices:
Blank Invoice Template
Using a blank invoice template is the perfect way to prepare your own template and have it ready for whenever you need to bill a client.
Simple Invoice Template
These types of template are great if you don’t want to over-complicate yourself or the client that you’re invoicing. Simple invoice templates include only the essential fields.
HTML Invoice Template
Do you want an easy to integrate invoice template in HTML format? Use such invoice templates to include your invoices directly in emails or to add them to any web page.
Printable Invoice Template
Sometimes you need to print your invoice template and maybe stamp and sign it before you send it to your client.
Self Employed Invoice Template
Use a dedicated self employed invoice for your own business invoicing needs.
Basic Invoice Template
These invoice templates are used when you want to keep information included in the invoice to a bare minimum. Basic invoice templates are a great way to bill clients fast.
Online Invoice Template
Used extensively by those always on the go or switching between computers, online invoice templates are a great way to take advantage of cloud storing solutions.
Editable Invoice Template
Sometimes the fastest way to send an invoice is to just edit an already created template with your personal details, your client details, and service cost.
Professional Invoice Template
Professionals want to make sure that every document that is seen by their clients looks good and is easily identified as coming from themselves.
Personal Invoice Template
Use a personal invoice template for any individual need or for invoicing one-off clients where there is no need to set up an elaborate invoice template.
Proforma Invoice Template
These are often used as price quotes. You may include one in a proposal, to outline the costs of the work you’re proposing to do for a client. If the proposal has an expiry date, the invoice would note that the price is valid until that date.
Final Invoice Template
In conjunction with interim invoices, you would send a final invoice when the work is complete. The invoice would note that the work is done and no other invoices will be sent.
Past Due Invoice Template
This is sent when an invoice has not been paid. It’s usually noted on the invoice with an overdue stamp. If you have a fee for late payment, be sure to note it on the invoice and add it to the total amount due.
Interim Invoice Template
Let’s say you’re doing a large piece of work for a client, and you require progress payments. An interim invoice could be sent at a certain point in the work, quarter or halfway through, when pre-determined milestones are met, or on a monthly basis.
Invoice templates vary by format
Invoice templates vary by industry
7 common mistakes to avoid while using invoicing templates
It’s true that using an invoice template can speed up your invoicing process and help ensure you have quality invoices every time you send one to a client.
However, there are still some pitfalls that are important to avoid when using an invoice template. By knowing what they are, you can modify your template to ensure you aren’t making these mistakes, and repeating them each time you create an invoice.
At Bonsai, we’ve worked with 150,000+ freelancers and most of them are in the top 1% category in terms of earnings. We asked them what their top mistakes were and how they would avoid it.
Waiting to send the invoice, or forgetting to send it.
It’s important to promptly send the invoice when the work is complete. If you’ve negotiated a deposit, send an invoice before you start work for the client, and then a second invoice when the work is complete. Either way, don’t wait for the client to ask for an invoice. And if you use an online invoice system, there should be a way to know that the invoice was sent, whether the client received it, and whether it has been paid.
Not providing enough detail in the summary of work.
Invoice templates should provide ample room for adding line items like “client consultation,” “website redesign,” and “pool flooring blog post,” for instance. Clients appreciate knowing what the expense will be covering, particularly if the person who makes the payment is not the individual you work with in the organization. Which brings us to the next mistake.
Incorrectly addressing the invoice.
Invoice templates need to give you the ability to address the invoice to a specific person in the organization. A general address like “XYZ Construction” will be inefficient. You need to know the individual who is responsible for paying invoices, and be able to add their name to the invoice as well as the company name.
Not specifying a due date.
For instance, some invoices use language such as “Net 15,” which means 15 days after receipt of the invoice, which is not well understood by everyone in business. Or some templates use “due upon receipt,” which is not fair to the client. They may have accounting processes in place in which payments are processed bi-weekly or monthly. It’s best for you to date the invoice, and state a specific date when payment is due. This removes any ambiguity, which the client will appreciate.
Not following up if the payment is not received.
We’ve all been frustrated by that client who just doesn’t pay, but there are also instances where a client simply forgets. A quick phone call to that client often results in an apology and prompt payment. If you find yourself too busy for follow-up, or you prefer not to handle that personally, you can choose an automated system that does a follow-up for you after a set amount of time. Be sure it notifies you that a follow-up has been sent. The system should also let you know when the client has made payment. There’s nothing more embarrassing than following up with a client who has already paid.
Making it difficult to pay (we get this a lot).
Any invoice template should have clear instructions on how you accept payment. It should be as simple as possible for the client to pay you, and making it as easy as one click is best.
Sending long invoices.
Keep your invoices short, limited to one page. That makes it easier for your clients or the people in their organization who have to pay you. If you have many tasks or services to include in one invoice, create a summary page as the first page, and then provide details on subsequent pages.
We’ve baked in a lot of the best practices mentioned in these tips in our own invoicing tool called Bonsai. It costs $19 per month and used by 150,000 freelancers. Give it a try with a 14 day free trial.
What should a good invoice template include?
(whether you use our template or not)
Knowing those benefits, there are some key elements of an invoice template that you need to be sure to include.
For instance, on every template you create, there will be those elements that are the same, such as:
- Your business name and address
- Any logo or business branding. Make sure it looks professional.
- Payment terms like accepted forms of payment (do you accept credit cards?) or currency exchange, if applicable.
- Whether you will accept partial payment or installments.
- In some countries, a business is assigned a taxation number or business number, which should be included. For instance, in Canada, the GST (Goods and Services Tax) is collected and remitted to the federal government, so businesses are assigned a GST number for that purpose.
Then, you will adapt and add information into each invoice, but your format will stay consistent thanks to the template.
You will input these elements:
- The customer’s name and address, including business name if applicable.
- Date of the invoice.
- Terms of payment such as date it must be paid and terms of any late charges.
- Description of the work, products or services.
- Price of each of the products or services.
- Any taxes or other fees, if applicable.
- Any discount, including for early payment, if you offer that option to clients.
- Any expenses you may have incurred in doing the work, which the customer agreed to cover.
- Total amount due.
- Some kind of methodical numbering system, which will allow you to keep proper records. If you have to follow up with the client, you can cite that number for easy reference.
There may be some additional elements that are particular to your business or your client’s needs.
For instance, if the client has already paid you, and the invoice is simply being sent as a record-keeping document for both sides, the invoice should clearly state PAID.
It’s important to get the details correct on each and every invoice you create. You want to help your client with their record-keeping and book-keeping, and ensure you get paid in full and on time.
Getting it right the first time will help you avoid the unpleasantness of having to contact a client about an unpaid invoice, or contact them because you made a mistake on the invoice.
When to use an invoice template?
Your invoices are a reflection of your business, so you want to ensure they look professional.
An invoice template can be used any time you complete work for a client.
However, while you may think you only need to invoice clients when work is complete, there are times you will invoice before the completion of a project.
There may be milestones established by the client, with payment terms attached to each milestone. You would then invoice at the completion of each milestone.
Or, you may enter into an agreement with some clients to work on a retainer basis. In that instance, you will want to set up recurring payments, but you may still consider invoicing as means of keeping good records. If the retainer agreement is for monthly work, you can invoice on a monthly basis.
So an invoice template can be used in any instance when you need to get paid by a client for work you’ve done.
A note on paper vs online/electronic invoice templates
There are still many small businesses that use paper invoices and invoice templates. Using this format, you create the invoice, print it, and mail it to your client.
An online invoice system means the client receives the invoice electronically, which has a number of advantages for you and the client:
- The invoice can’t get lost in the mail, unless you have an incorrect email address.
- The invoice reaches the client immediately.
- The cost to you is much less, as you don’t have to purchase paper and envelopes, cover the cost of printers, and pay for postage.
- Paper invoices have a greater chance of being lost or ending up on the wrong desk in a large organization.
- Electronically submitted invoices have a greater chance of being paid faster, since they are received faster than paper. They don’t have to be opened, sorted, sent for approval and then paid. Electronic invoices can even include a “pay now” function that allows for immediate electronic payment.
- It’s better for the environment to eliminate the use of paper.
For all these reasons, we recommend an electronic or online invoice system.
Advantages of invoice templates
There are some really great reasons to use invoice templates.
- They provide consistency. By using a template, you can make multiple invoices quickly, and make them for multiple clients. Your clients will get to know your brand, and know what to expect from your invoices.
- Which leads to an even better advantage, getting paid faster. A template will allow you to send invoices quickly, which could help you get paid quickly.
- They free your time for all the other tasks you have when managing your freelance business. Having a repeatable process makes it fast and easy.
- You don’t have to reinvent the wheel for every project or client. Your brand can be displayed consistently every time, without the effort of designing an invoice every time you have to bill for completed work.
- A quality invoice sends a positive message about your business. It’s not only clear and easy to understand, it’s professional.
- A high quality invoice coupled with a quality invoicing system can increase customer satisfaction, leading to more work!
- A superior invoice and top-notch invoicing process is an opportunity to send a positive message about your company and brand.
Disadvantages of invoice templates
However, there are some downsides to using an invoice template.
For instance, if you choose a poor template, that could mean you would repeat the same mistakes over and over again.
In the following instances, invoices may be misinterpreted, disputed or ignored, and your payment could be delayed, or you won’t receive payment at all.
If you continue to use a poor template, you could run into problems with multiple clients. Poorly managed invoice processes can lead to dissatisfied customers, and that could lead to less work for you and your business.
Therefore, it’s important to choose a clear, high quality invoice template, and to have good processes to manage your invoices.
Why are Bonsai’s automatically generated invoices better?
Once you’re comfortable with invoicing, you may want to move to an online system that can do much of the work for you, like numbering, calculating total costs, sending reminders, and more.
If you’re looking for an all-in-one freelancing tool for professional looking invoices, which include reminder emails to the client, Bonsai offers a free trial for its services.
Here is a sample invoice template:
There are several key elements of this invoice template:
- The company logo, which establishes professionalism and a brand for the company.
- The invoice number, for easy reference by the business and the client.
- The title of the invoice, which clearly states what the invoice is for (“January Project”).
- The business name and address and the client’s name and address.
- The date the invoice was issued, and when it is due - making it clear to the client.
- A breakdown of each item, its rate, the tax added, a discount applied, and the total due in bold.
This is a clear invoice, easy for the client to read, and therefore easy for the client to pay. You can create such beautiful invoices (and more documents) in minutes, so why not sign up for your free trial and start exploring Bonsai’s features?
How to create professional invoices using Bonsai?
Bonsai makes creating, saving and sending invoices simple. Here’s how.
Create an account
First, set up a Bonsai account. The only information you need to enter is your name and email address.
Once you’ve signed up, you’ll arrive at this screen:
Click on "send invoice"
Simply click on “send invoice” on the left side of the screen, and you will be ready to build an invoice, by clicking the “create an invoice” button.
Insert client information
The first step will be to insert the client information, the project name, and what type of invoice you are creating - in this example, we are doing a one-time invoice:
Build your invoice
The invoice template will open, and you can then build your invoice. You can add a logo and banner, to show off your brand to the client. Then you insert the item name, number of units, and your rate.
You can also insert expenses:
Taxes & discounts
Besides the description of the service and expenses, you can also insert taxes, and there’s a spot for a discount:
Late fees & tax ID
You can set a late fee of whatever percentage you choose. There’s also a field for a Tax ID number if necessary, any note you’d like to provide the client, and the ability to attach a file if necessary.
You also add a payment method.
There is also a drop-down menu with more options, like duplicating the invoice or marking it as paid:
Send your invoice
When the invoice is ready, there is a confirmation page where you add a message to the client, click send, or schedule it to be sent automatically:
Track payment status
Once sent, you’ll see information at the top of the invoice dashboard, including whether it has been paid:
Using Bonsai is extremely easy and intuitive: let us make your life easier while you focus on the work that you love.
Bonsai vs generic invoice templates
While it may be free (and time consuming) to download an online invoice template in your preferred format to customize and send it, you do get your money’s worth when using Bonsai to handle your invoicing (and all other back office tasks).
We’ve talked to over 150,000 freelancers over time and they all agree on one thing: you’ll waste time and get paid late by clients when using generic invoice templates. You should take your invoicing to the next level if you’re serious about your consulting or freelancing business.
Here’s what you get for spending $19 / month on Bonsai:
Create, customize and send professional invoices in minutes.
Get notifications when clients view or pay your invoices.
Optimize automatic reminders by choosing the right time to email each client.
Use any payment system and get paid securely: Bonsai supports credit cards, bank transfer, PayPal and more.
Get paid for the part of work that you just completed. Split your invoices as needed for any project.
Set up late fees on your invoices to charge clients automatically for overdue invoices.
At Bonsai, we recommend ALL freelancers to protect their time like it’s the most important thing in the world. Otherwise, it’ll consume you.
Why do we recommend adding late fees to invoices?
Having a section in your templates for late fees can be a touchy subject for some freelancers. After all, it seems a little “heavy handed” to charge clients who don’t pay promptly. You likely want to work with those clients again, so you may wonder, will late payment terms turn off a client?
In reality, you’re running a business too, so any valuable client should understand and appreciate late payment terms. They should understand that you need cash flow too, so those terms should encourage them to make payment promptly.
As freelancer blogger, author and public speaker Linsey Knerl says:
“When you’re a freelancer, time is money, so it’s important to acknowledge the impact late payments can have on your business. There’s no benefit in assuming that things will always go your way. In fact, it’s best to confront the possibility head on.”
But there are other reasons to add late fees to invoices. It establishes you as a professional, running a business. It actually provides you with compensation if the client is late, since your cash flow is affected by non-payment. In fact, there’s a good chance your client uses late fees.
Also, it takes away any negotiation if payment is overdue. You don’t have to follow up and try to figure out an amount to charge the client. It’s clearly stated from the outset, on every invoice, that you have an established late fee.
But there are some important considerations to adding late fees to an invoice.
First off, be sure it’s clearly stated in the same format as all the other items and payment terms on your invoice. Don’t hide the late fee terms in fine print.
In fact, it helps to include late fees in the terms of the original contract. That removes any surprise when the client gets your invoice. For instance, Bonsai contracts and invoices already include this type of language.
Second, be sure you actually completed the work to the satisfaction of the client. If you send an invoice for unfinished work, or for work that the client still wants to discuss with you, having a late fee may only aggravate the relationship.
And remember, you can always waive the fee if there are extenuating circumstances, like a client who happened to be on vacation when the invoice was sent.
It’s still better to have the terms stated and waive them, than to try and add a fee without the client expecting it.
The next decision you have, then, is how much to charge and when to enact the late fee.
When determining the amount, don’t make it unreasonable. There may be laws in your jurisdiction regarding the amount you can charge, but in any event, you want the late fee to be an incentive and not a punishment.
A fair amount is 5% of the total of the invoice. If you have a $1000 payment due, then you would add $50 to the next invoice, if you haven’t received payment. That percentage should be clearly stated on the original invoice.
Your payment window should also be fair. Don’t expect to charge a late fee if the client is only delinquent by one week, for instance. A fair term is 15 days, at which point you would resend the invoice with the late fee included in the total. A friendly reminder email with the invoice can then be sent to the client.
Here’s how late fees are handled with Bonsai products. First, in the initial contract template, invoicing terms including late fees are clearly stated:
Then, in the invoice template, the late fee is a line item with clear language explaining the terms. You can set the percentage that you want, but be sure it matches the original contract.
And finally, don’t give up on late payments, and don’t re-negotiate a lower amount just to guarantee payment. It’s within your rights to expect prompt and full payment, and to have your late terms accepted if the client is delayed in their payment.
Unfortunately, there are instances when you may have to end a relationship with a client due to chronic late payment or non-payment. While it may seem difficult, particularly when you’re first establishing your business, it will be better for you in the long run.
Other invoice template categories
Running a freelance business means wearing a lot of different hats, and it all takes time. Administrative tasks, in particular, take time away from your creative work. But it’s worth taking the time to ensure your invoicing is done properly so you get paid promptly.
Having an invoice process or system that’s streamlined can free up your time for other work, while also ensuring you collect your money. It also shows professionalism on your behalf, and respect for your clients.
Now you know how about invoicing and invoice templates, to help make the task easy, convenient and efficient. You can also consider the option of the integrated tools available to you as part of Bonsai’s freelance suite by signing up for a free trial now.