Congratulations! You have completed your job successfully. Now what? It’s time, you focus on getting your payment on time, and for that invoicing is essential. Invoice is a vital accounting tool. There are various business enterprises and consulting services as well as freelancers who work on an hourly basis. To bill on an hourly basis you must track the working hours for that particular project. This could be weekly, bi-weekly or monthly, depending upon the contract that has been signed. The hourly invoice organizes your work according to billable hours and proceeds for payments.
To make your task easy, we have outlined the necessary steps to invoice for hourly works. Scroll down and check out the article!
Steps to writing an hourly invoice to get paid faster
Before proceeding directly to the hourly invoicing, it is essential to figure out the hourly rates that you are going to charge your clients. If you have a monthly budget of your business expenses then figure out the per hour rate accordingly. The amount generally fluctuates as this depends on specific parameters like your experience, skillset, industry type, etc. Once you have completed a project with positive feedback, you can build your portfolio with a specific hourly rate. Setting an hourly rate is much easier for those who have a long history in the business field.
Setting your hourly rates goes side by side with calculating the business expenses. Chalk out the expenses you will incur from your client. Besides your task, you may have additional expenditures for maintaining your business. These could include your overhead costs like office rent, phone bills, travel expenses, vehicle maintenance, fuel, electricity(in some cases), etc. Accumulate all the business-related expenses to complete your hourly rate.
Once done with setting an hourly rate and calculating additional business expenditure, you can move forward with an hourly invoice.
- First and foremost, convert the hourly rates into an invoice by multiplying the rate with total billable hours. Tracking the hours is simple as you get several time-tracking software that monitors your working hours.
- Next, start with preparing the invoice. Give a professional header. The header- ‘Hourly Invoice’ made in bold and readable font would make it prominent to the clients about its purpose.
- Your contact information is something that you cannot miss. Mention your business name and address along with phone numbers. Contact details would help your client reach out to you in case of any emergency.
- Undoubtedly, the client’s contact information is as vital as yours. Mention your client’s business name, address, postal code, and phone number.
- Needless to mention that your invoice cannot go without an invoice number. Assign a unique number so that it can be referred by you as well as your client whenever needed.
- Whether you have worked on a different set of tasks or the same one, mention the services or work done along with time spent on each task.
- Calculate the amount corresponding to each task and finally add the entire amount. Do add the tax amount if applicable.
- Lastly, you must mention the payment method, timeline of payment, and late fee policy (if any). Keeping the payment method flexible is recommendable as that speeds up your payment procedure.
Send the invoice promptly as soon as you finish your project. This avoids the likelihood of any lame excuses from the client’s end. Do keep the invoice copy for tax purposes.
How to number the invoice ?
We have already mentioned earlier that your invoice should be numbered as that acts as an identifier. But are you confused as to how to do that? It’s as easy as numbering any other documents like an attendance register or numbering a product list. The numbers assigned allow the clients and tax authorities to locate the invoice for future reference. Sequential numbering of invoices is preferable, and it makes it easy for you to remember. Assigning random numbers or signs may confuse you, and it may end up with duplicate numbers for two invoices.
There is another way of numbering your invoice. You can use the numbers used by the client to represent the project as your invoice numbers. It has one advantage, as this makes your invoice easily identifiable just by a glance. You can use any number to assign your invoice, but it should be unique and chronological.
How to create freelance invoices?
Hourly invoice is beneficial for clients, as it gives a clear idea about the cost of a freelance job. An hourly invoice of a freelancer is much similar to other commercial invoices. The amount calculated based on hourly rates makes it differ from other invoices. Also, the freelance invoice includes the billable hours, besides the description of services offered. A detailed mention about the productive hours utilized upon the project, hourly rate, and the total amount helps the client understand how much work is done and what the clients owe to the freelancers. A freelance invoice should also have the payment methods mentioned along with additional fees (if any).
Whether freelance invoice or any other hourly invoices, you get various invoice templates online that eases up your job. With Billbooks you can get your invoices ready just by a click. You can opt for customized templates or implement your requirements as well. Invoicing is no more a tedious task and with Billbooks enjoy hassle-free invoicing just in a minute.