Invoicing

When you’re self-employed, one of the most important things to get right is making sure you’re paid for your work. And the way you do that is by sending an invoice.

An invoice is simply a formal request for payment. It tells your client what work you’ve done, how much they owe you and how and when they should pay.

There are a selection of easy-to-use apps to help small businesses and the self-employed. These can generate invoices automatically and help keep tabs on what you’re owed.

So, what should go on an invoice?

So, what should go on an invoice? Here’s a quick checklist. Your name or business name and your contact details. The client’s name and address. A unique invoice number – this helps you to stay organised. The date you issued the invoice. A short, clear description of the work you’ve done. The total amount due, including VAT if you’re registered. The payment due date. And finally, your bank details or payment link. 

A good habit is to number your invoices in order, so you can keep track. And remember, always agree your rate and payment terms before you start the job – ideally in writing in an email. 

When it comes to deadlines, public authorities generally have thirty days to pay you. For private businesses, the goal is also thirty days, though this can sometimes be extended up to sixty days if both parties agree.

Late payments do happen and they’re frustrating. The first step in addressing this should always be a polite reminder – often, a simple nudge is all it takes. 

If you’ve agreed on specific late payment fees in your contract, you can apply those. But even if you haven’t, you still have statutory rights under UK law. The Late Payment of Commercial Debts Act allows you to claim interest at 8% above the Bank of England base rate, plus a fixed compensation fee to cover recovery costs.

Let’s look at an example. Priya is a trainee doctor who also freelances as a medical writer. She wrote an article for a client for one-thousand-three-hundred-and-twenty pounds, but one-hundred-and-twenty days after the payment deadline, she still hadn’t been paid. 

To work out her late fees, she checked the current Bank of England base rate and added the statutory eight per cent. 

Using a hypothetical base rate of five per cent for a debt of one-thousand-three-hundred- and–twenty pounds, the annual interest would be thirteen per cent, which is equal to one- hundred-and-seventy-one pounds and sixty pence.

That’s about forty-seven pence per day, which after one-hundred-and-twenty days, adds up to fifty-six pounds and forty pence. 

On top of that, she added a seventy pound fixed recovery fee, which is determined by the size of the debt. The higher the unpaid invoice, the higher the fixed fee you’re entitled to claim. 

In total, that’s one–hundred-and-twenty-six pounds and forty pence in late fees, on top of the one-thousand–three-hundred-and-twenty pounds she was owed. 

But before taking these formal steps, Priya made sure she had a clear record of her agreement and had already attempted to resolve the issue with a friendly reminder.

Remember, just because you’re self-employed doesn’t mean you’re on your own. There are freelancer organisations and unions that give advice, help with tax, and support you with chasing up late payments if you need it.