How to Invoice as an Independent Contractor [+ Template]

As a freelancer or a small business owner, it’s often your sole responsibility to take care of every aspect of your business, including how to invoice a client to receive payment. Follow the instructions below to streamline your invoicing system:

Step one: Refer to the independent contractor agreement for payment terms

Before creating an invoice, ensure that you and your client have created and signed an independent contractor agreement outlining your desired pay rate, schedule, and payment method. Some contractors prefer upfront payments, down payments, or payment upon a milestone/project completion, while others prefer hourly, weekly, biweekly, or monthly payments. 

Once you have decided on the appropriate payment schedule, you can align your invoices accordingly.

Step two: Gather the necessary information

The next step in the invoicing process involves gathering all the necessary information regarding the services performed, the number of hours spent (if billing by the hour), and the subtotal of these services. Getting this information right requires effective time-tracking and record-keeping, which we’ll explain in more detail below. 

Time-tracking 

Time-tracking information is often necessary for calculating the price per service and populating your invoices. Whether you charge clients per hour, project, stage, unit, or by word, you’ll need to know your time spent to calculate your income for specific periods, improve efficiencies and design your service fees around the cost of living. 
 
If you’re billing up-front or requesting a downpayment, you’ll need an archive of this information collected over time to bill accurately.
There are many free time-tracking tools and apps available, including: 

• Clockify
• Toggl
• MyHours
• Harvest

In addition to simple start/end features, time-tracking software can collect data showing you where you are overspending time and where you’re most efficient.

Record-keeping

Maintaining up-to-date records is another integral part of invoicing if you need to back up your costs. Good record-keeping is also essential when it comes to tax-filing, budgeting, and compliance, so keeping the following documents in a safe place is crucial:

• Independent contractor agreements
• Business expenses and receipts
• Earnings
• Project records
• Tax returns
• Professional licenses and certifications

Google sheets and documents are also easier to share and edit than Microsoft Word and Excel documents that you need to download to your computer and resave every time you make an update. You can find generic invoice templates directly in Drive or download our free professional invoice templates below.

Step three: Create the invoice

You can customize your invoices in any way you choose; however, you should include the following key elements to maintain a good professional image and avoid any errors, legal troubles, and misunderstandings later down the line:

• Document name: Label the invoice document within the header using bold letters
• Company logo: If you have a company logo, include this in the header to add a touch of personalization and credibility
• Unique invoice number / code: Assign dedicated numbers to each invoice to make record-keeping easier. Simple multi-digit numbers will do, or create a unique code system containing the invoice date and client name. This system is more complicated, but it can help you quickly find the exact invoice you need if there are many
• Invoice date: Include the sending date to prevent late payment and other miscalculations.
• Your business details: Business name, your name, and contact information (email, phone number, and maybe address)
• Client’s contact information: The same information as in the previous step, but include the billing contact or billing department of larger enterprises
• List of services: List each service you provided individually, along with a brief description of your work, amount of hours spent working (or word numbers, for writers), hourly rate (or price per word), and subtotal for each service
• Total amount due: Total cost for services listed above; you can add applicable tax and flat rate if needed
• Payment terms: State the payment method you accept (PayPal, Payoneer, bank account, crypto address, or something else). To learn more about payment options, check out our article on How to Get Paid as an Independent Contractor
• Payment due date: Include a specific payment deadline to avoid confusion that may occur if you write something vague, such as “15 days from the invoice reception date”
• Late payments policy: If you have such a policy, write down the details and what happens in case of late fees

Step four: Send invoice in a payment request email a week before the payment due date

If you explicitly outlined your payment terms in the independent contractor agreement at the start of the business relationship, your client will expect this email. You should send another reminder email on the day the payment is due. 

If your client still hasn’t paid you a week after the due date, you should follow up with another payment reminder email. Make sure you remain polite and professional. There may have been some unforeseen complication, so make this more of a friendly reminder.

Finally, contact your client once weekly after the unpaid invoice’s due date if you still haven’t received payment. Most people resort to a phone call once they’ve sent a couple of reminder emails.

Bookkeeping systems like FreshBooks, QuickBooks, and ZipBooks can send automated payment reminders with the correct programming.

For more information on what to do in the case of late payment and to access our free payment request email templates, check out our article How to Professionally Ask for Payment From Clients.

Once you’ve generated a digital invoice on the Deel platform, it’s submitted to the client in real-time to help you avoid late invoices and ensure timely payment. It will appear pending until you receive a notification confirming it has been approved.

Use the Payment Tracker for an easy-to-follow timeline of when you can expect the payment to be processed.

Step five: Receive payment

Again, if you’ve outlined your payment terms in your contractor agreement, then you will have selected your preferred payment method. 

For contractors residing in the same country as their clients, common and effective payment methods include direct deposit, paper checks, domestic wire transfers, and payment apps like PayPal.

However, when you're in a different country from your client, things get a bit more complex. You'll need to consider exchange rates, currency conversion fees, and various bank charges. These fees may apply to your client, yourself, or both. Some jurisdictions may require clients to pay contractors in the local currency, so it's essential to familiarize yourself with local labor laws to ensure that you receive compensation in compliance with these regulations.

Experience the benefits of getting paid through Deel

Automated invoicing, fast payments, low fees, and convenient perks like Deel Card and Deel Advance make our platform one of the most flexible and beneficial ways for contractors to avoid common contractor invoicing mistakes and get paid.

While there are many options to receive international payments in today’s fintech landscape, Deel is the all-in-one solution that ensures you can work from anywhere and with anyone, compliantly and securely. 

The Deel platform has invoicing software integrations to automate your online invoicing and speed up the payment process. Every Deel invoice includes the name, address, company details, payment method, transaction details, and amount issued so that you remain professional and transparent. Deel also takes care of other documents, such as receipts and tax forms, which help you navigate compliance. 
 
On top of that, with Deel, you and your client can choose how to process payments. That means the two of you can have different payment methods. For example, your client can pay with a wire transfer, and you can choose how you want to withdraw as soon as you have an available balance.
 
Sign up and unlock the smoothest contractor experience on the planet.