Everything freelancers need to know about creating invoices, managing payments, handling taxes, and using the right tools to streamline your billing process.
Setting up your freelance invoicing system
Before sending your first invoice, you need the basics: a registered business name (or your legal name), business bank account, tax ID or VAT number if required, and professional invoicing software. InvoiceFlow helps freelancers create compliant invoices in minutes with automatic tax calculations and payment tracking.
Pricing strategies that work
Choose between hourly rates, project-based pricing, or value-based pricing. Hourly works for ongoing work with uncertain scope. Project-based gives clients predictability. Value-based pricing charges based on results, not time. Whatever you choose, be transparent in your invoices—break down costs clearly so clients understand what they're paying for.
Understanding tax requirements
Freelancers must charge sales tax, VAT, or GST depending on location and income thresholds. In the UK, register for VAT if you earn over £85,000. In the US, sales tax varies by state. Keep accurate records of all income and expenses. InvoiceFlow automatically applies the correct tax rates based on your location and tracks everything for tax season.
Creating a payment schedule
For large projects, request a deposit (typically 25-50%) upfront. Set milestone payments for ongoing work. Use Net 15 or Net 30 terms for established clients. Always specify payment terms in your contract and on every invoice. Consider offering early payment discounts (2% off if paid within 5 days) to improve cash flow.
Handling late payments professionally
Send a friendly reminder 3 days before the due date. Follow up on the due date if unpaid. Send a formal reminder 7 days after due date. Add late payment fees if specified in your contract. Consider using invoicing software with automatic reminders—clients are 80% more likely to pay on time when they receive reminders.
Tools that save time and get you paid faster
Manual invoicing wastes hours every month. InvoiceFlow automates invoice creation, sends smart reminders, accepts online payments, tracks time and expenses, generates financial reports, and integrates with accounting software. Freelancers using InvoiceFlow save 5+ hours per week and get paid 40% faster on average.
Keep momentum after every invoice
InvoiceFlow automates approvals, nudges clients when payments slip, and surfaces the metrics you need to stay cash-flow positive.