Going self-employed is the easy part. Figuring out how invoicing actually works — what to include, when to send it, how to stay on the right side of the tax rules — is where a lot of people get stuck. The good news: invoicing as a sole trader or freelancer is straightforward once you understand the basics. Here's everything you need to know.
Do You Need to Send Invoices?
If you're self-employed and charging clients for work, yes — you should be invoicing for every job. An invoice is a formal record of what you provided and what you're owed. It protects you legally, simplifies your bookkeeping, and is often required by your clients' own accounting systems.
In many countries, if you're VAT registered (or GST registered), issuing a compliant invoice for business-to-business transactions is a legal requirement — not just good practice.
What Every Self-Employed Invoice Must Include
The exact legal requirements vary by country, but a professional invoice should always contain:
Your full name (or business name if you trade under one) and address
Your contact details — phone and email
A unique invoice number — sequential, one per invoice
The invoice date — when you issued it
The payment due date — when you expect to be paid
Your client's name and address
A clear description of the work done — specific, not vague
The amount charged — itemised where possible
Any applicable tax — VAT, GST, or sales tax, listed as a separate line
The total amount due
Payment details — bank account, payment link, or accepted methods
If you're VAT or GST registered, you must also include your registration number and show the tax amount separately. Invoices without this information aren't valid tax invoices and your clients can't reclaim the tax.
Tax Registration: What You Need to Know
VAT (UK and most of Europe)
In the UK, you must register for VAT once your taxable turnover exceeds £90,000 in a 12-month period. Below that threshold, registration is voluntary. If you're VAT registered, you must charge VAT on your invoices, show it as a separate line, include your VAT number, and submit regular VAT returns.
GST (Australia and New Zealand)
In Australia, you must register for GST once your annual turnover exceeds AUD $75,000. You'll also need an ABN (Australian Business Number) — include it on every invoice regardless of whether you're GST registered.
Sales tax (United States)
There's no federal sales tax in the US. Whether you need to charge sales tax depends on your state, what you're selling (services vs goods), and where your clients are located. Most service-based freelancers don't need to charge sales tax — but check your state's rules.
GST/HST (Canada)
In Canada, you must register for GST/HST once your annual revenue exceeds CAD $30,000. Include your business number on all invoices once registered.
Setting Payment Terms
Payment terms tell the client when you expect to be paid. Common options:
Net 7 — payment due 7 days from invoice date. Common for small, one-off jobs.
Net 14 — 14 days. Standard for most freelance and trade work.
Net 30 — 30 days. Common for agency and corporate clients.
Due on receipt — technically means pay immediately. Rarely enforced; not recommended as your default.
Pick terms that suit your cash flow and stick to them. Include your payment terms on every invoice — don't assume clients will just pay promptly without a deadline.
Deposits: Should You Ask for One?
For larger jobs, yes. A deposit — typically 25–50% upfront — protects you if a client cancels and covers your initial costs. State deposit requirements in your quote and reference them on the final invoice as a deduction from the total.
For smaller jobs, a deposit isn't always practical, but it's never unreasonable to ask — especially for new clients you haven't worked with before.
Numbering Your Invoices
Every invoice needs a unique number. A simple sequential system works fine: INV-001, INV-002. Some people prefer year-based numbering: 2026-001, 2026-002. Either works — just be consistent.
Invoice numbers matter for your own records and are essential if you ever need to chase a specific payment or respond to a tax query.
How to Actually Send an Invoice
Email is standard. Attach the invoice as a PDF — not a Word document or a screenshot. Send it to the right person: the client's billing or accounts contact, not the person you dealt with on the job.
Include a brief, professional note in the email body: "Please find attached invoice INV-042 for [work description], due [date]. Please don't hesitate to get in touch if you have any questions."
Send it promptly — ideally the day the work is complete. Waiting a week delays your payment by a week.
What to Do When Invoices Go Unpaid
First, send a polite reminder a day or two before the due date. Many late payments are just admin oversights — a quick nudge is often all it takes.
If the due date passes without payment, follow up within 2–3 days. Keep it professional: "Just following up on invoice INV-042, which was due on [date]. Please let me know when I can expect payment."
If it continues, escalate: a formal letter before action, a late payment fee (if stated in your terms), or — for larger amounts — a debt recovery process. Most disputes never reach that stage if you've followed up consistently.
Keeping Records
Keep a copy of every invoice you send, whether paid or not. Most tax authorities require you to retain business records for a minimum of 5–7 years. A good invoicing tool does this automatically — everything in one place, searchable, and ready for your accountant at year end.
Clervo handles the structure for you — invoice numbers, due dates, payment tracking, and a clean record of every job you've billed. Set it up once, use it every time.