Invoicing offers the opportunity to build positive and productive client relationships, which are the beating pulse of your freelance business.
Proper invoicing also ensures you get paid the correct amount at the expected time so you can:
Pay your bills on time
Regulate your cash flow
Proactively budget for future expenses
Hectic™ gives you the complete toolkit you need to create professional, accurate invoices. Create recurring invoices, set up a custom invoicing number scheme, and invoice in multiple currencies. Hectic also supports subscription billing.
Respectfully communicate when and how you wish to be compensated, thus supporting a positive client relationship. It also empowers you to legally hold your clients accountable for paying the correct amount on time.
Creating an invoice
Creating an invoice in the Hectic™ is easy, and there are multiple ways to generate an invoice from within the app.
Step 1: Create a new invoice
Create an invoice quickly from your homebase focus using the icon under "Add new." You can also make an invoice using the 3 dots that appear on hover next to your client's name in the left panel.
Find a list of invoices in accounting > invoices. You can create a new invoice from this tab using the button in the upper right corner.
Step 2: Connect your invoice with a client
All activities in Hectic™ centralize around the client (unlike other apps, which centralize around the task). This is because we know your freelance business revolves around your clients and that you need a seamless, client-centered app experience.
Select or create a new client to invoice.
Choose "Standard" for a regular invoice. Choose "Deposit" to request a deposit from a client. Deposits can be credited to future standard invoices.
If you choose to create a new client at this stage, it will begin a client file. Only the client name is required to continue. We recommend completing as much of the form as you can since it will auto populate in other needed areas of the site, including your invoices.
Step 3: Add billable items
Invoices integrate directly with project management, time tracking, and expenses. You can also keep a product and services library that is easy to add to any invoice.
"Add a new line item"
When you click "Add new line item" you will see your product and service library. Set up products or services that you bill for often without necessarily associating them with a project. You determine the rate and units (or hourly rate). Click any product or service to add it to your invoice then enter the quantity and Hectic's invoice will do the calculation for you.
If you are adding a net new item, choose "Create new" to set it up. This item will be automatically saved for future use. Edit or delete items in your product and service library by using the edit pencil or trash can icons.
"Add hours or billable project"
If you have been using time tracker and project management, you can select "Add hours or billable project" and all of the un-billed stuff will show up for you to easily add to your invoice. Any un-billed retainers, time tracked (sorted by month and week), flat rate projects, or per item deliverables that are completed* can be added at this point.
*Per item deliverables can only be added to your invoice when they are in the column you designated as your completed column, or to the right of that column on your kanban board.
"Add reimbursable expense"
If you have an expense that you have marked as reimbursable and assigned it to this client, you will also see a line that says "Add reimbursable expense." Click it to quickly add your expenses to the invoice.
"Apply deposit credit"
If you collected a deposit from your client (which we highly recommend, especially if it is a new client), you will see a link to apply the deposit credit to an invoice before you send it. You can click this button to see the deposit collected, deposit available, and choose how much of the deposit to apply to this invoice.
Use the "Tax" checkbox for any line items that are taxable. Be sure to add the percentage tax amount just above the total due.
Q: When do I include tax?
A: In the US, almost never. Most states allow merchants to charge sales tax for goods but not services. However, some states allow sales tax for services, especially if these services accompany a good. For example, Delaware, Hawaii, New Mexico, and South Dakota tax most services. So be sure to consult with an expert on whether you can charge sales tax for your services, even if you live in these states.
Step 4: Add payment instructions
Add the details the client needs to pay the invoice into the payment instructions box.
Easily add payment instructions to apply to that invoice only. You can also select to apply these instructions to your entire account, and thus all clients. You will still be able to edit on an invoice-by-invoice basis, should you need to.
Pro-tip: Information to include in your payment instructions:
Accepted payment types (Stripe, PayPal, ACH, check, direct deposit, credit card, cash, etc.)
Any additional fees with any of these payment methods
Where the client can go for questions or direct deposit information
Example payment instructions blurb:
Accepted forms of payment include check, direct deposit, and Stripe (additional fees may apply). Cash payments are accepted in person only. Please make checks payable to eFreelancer, LLC. For questions concerning this invoice, or to set up direct deposit, please contact Erica Harrison, (719) 637-8373 or firstname.lastname@example.org.
Step 5: Add payment terms
Payment terms are the contractual part of the invoice that clearly outlines the invoice details, requirements, and instructions.
Hectic™ makes creating the payment terms paragraph simple by breaking it into editable sections. Once completed, these sections will combine to form a paragraph.
Create payment terms to apply to that invoice only or select to apply these instructions to all invoices sent to this client. This set of terms can be set and saved on a client by client basis. You will still be able to edit on an invoice-by-invoice basis, should you need to.
Payment terms represent the timeframe within which the client must pay your invoice. You want to structure your payment terms in a way that fosters a positive client relationship.
Invoice payment timeframes matter to freelancers because they can affect:
Ability to fund your work
The momentum of the project, preventing a gap in non-productivity while you wait for the invoice to be paid.
Your client relationships
To establish payment terms for your invoice, select your desired timeframe from the dropdown provided.
The standard invoicing payment timeframe is 30-days. But keep several things in mind when configuring this section:
Indicate here whether you will invoice them once or on an ongoing basis. Remember, invoicing early and often shows that you value your work and that your admin processes are consistent and organized.
To establish invoicing schedule for your invoice, select your desired timeframe from the dropdown provided.
Weekly - once a week
Bi-weekly- once a fortnight
Monthly - once a month
Quarterly - 4 times a year
Annually - once a year
For longer projects, determining the invoicing schedule by establishing payment milestones with the client before starting work to guarantee payments over the course of the project. Milestones also improve communication with clients and build that vital, healthy client relationship.
In Hectic™, a "milestone" translates into a "Deliverable." So, as you finish the Deliverable (i.e., milestone), you can bill for it via an invoice. This is why creating proposals before a project starts is so important; it allows you to establish payment milestones (i.e., deliverables) before you start work.
Late payment fee
Charging late fees is best practice in freelancing because it leads to a higher percentage of paid invoices and shows you take yourself and your work seriously.
In Hectic's invoicing system, late fees are calculated daily. If your client pays 1 day late, the fee is smaller than 2 days late, etc. It's calculated at the time they view the invoice. A late fee is not applied in one lump sum.
Typically, late fee charges for unpaid invoices fall between 1.5% and 3% interest per month after the payment due date. These percentages seem small, but they're mighty; they serve as written (and legal) incentives for clients to pay on time.
Make sure any late fee conditions you include within your payment terms are per usury state laws. Familiarize yourself with the maximum annual interest rate in your state and consult a professional if you have questions.
Pass credit card fees onto client?
Hectic™ gives you the ability to either pay the credit card fees yourself, pass them onto the client, or split them with the client.
Before passing them onto the client, keep in mind that these fees can usually be considered tax-deductible for you as a freelancer, but be sure to consult with a tax professional for verification.
Step 6: Add a note
This section gives you the opportunity to personalize the invoice. An example note is:
"Thank you for your payment. It was a pleasure working with you and your team. Please keep [business name] in mind for future projects."
Step 7: Add an attachment
You can add an attachment to the invoice by either dragging and dropping your file into the attachment or click to upload a file.
Step 8: Email or download the invoice
When you click the blue "Share" button in the top right corner, you will see two ways to get the invoice to your customer:
Hectic email: The app will send the invoice to your contact(s) with a personalized message from you.
Download PDF: Save the invoice as a PDF and send it your own way.
Freelance Industry Best Practices: Invoicing
It's also recommended to obtain the payment schedules and policies for each client before you do any work. Here are some questions you can ask your client:
Regardless of your client's processes, it's important that you establish your own standardized billing cycle that is frequent and predictable. This signals to the client that you value your time and your work. You can then collaborate with the client to agree upon (in writing with signatures) the most productive methods of invoicing for your particular business relationship based on mutual needs and procedures.