December 5, 2014 Download our Free Invoice Templates One of the most important things you need to do when you are freelance / self employed is to send your invoices to your clients in a timely manner and also to ensure the invoices are being raised correctly and consistently. To help you with your accounts we have given you free invoice templates in Excel format – make sure you choose the correct one as they are different depending on whether you are VAT registered or not. Please note that these templates are only suitable for UK Self Employed / Sole Traders / Freelancers – they are not suitable for Limited Companies. To get our free invoice templates see below for the download links: Not VAT registered: click HERE VAT registered: click HERE Please note that these invoice templates are only suitable for UK Self-Employed / Sole Traders / Freelancers – they are not suitable for Limited Companies. Invoice Guidance: Invoice Numbering – ensure you use a consistent invoice numbering system and that you are sequential with the numbering (e.g. 001, 002, 003). Don’t skip numbers as this will look suspicious to HMRC if they investigate your records. If you do need to cancel an invoice for some reason and that invoice number is then wasted then keep a record of this on an invoice log for example. Name – if you are trading under a business name then your invoice should include both your business name and your own name – this is because as a Sole Trader you and the business are the same entity (as opposed to if you were trading as a Limited Company). VAT – be careful you are charging VAT correctly – on our template we have assumed that VAT is charged at 20% but you can change this. Some services, such as supplying some services to EC businesses, do not have to have VAT charged even if you’re VAT registered so make sure you understand the VAT treatment of your invoices. Copies – you must keep copies of all the invoices that you issue, even if you subsequently cancel one. Electronic copies are fine but make sure you have a robust backup system in place. Tax Point – for VAT invoices you must also state the tax point (or time of supply) if this is different from the invoice date. Usually VAT invoices must be issued within 30 days of the date of supply or the date of payment (if paid in advance). Payment Terms – think carefully about your payment terms – if you work with bigger clients they may dictate to you what their payment terms are e.g. they might pay 45 days after receipt of your invoice. You should bring up the topic of payment terms early on in your discussions with a client so that there are no surprises further down the line and this will also allow you to plan your cashflow. International Trade – if you are VAT registered and trading internationally there are a few more complications so we suggest you read HMRC’s guidance on VAT and international trade. Order Number / Reference – ask your client if you need to quote a specific order number on your invoice, sometimes called a “Purchase Order Number” – this will be a reference the client uses internally to allocate your cost to a specific budget / project / cost centre at their end. This is particularly common with bigger clients. Making sure you have got the reference correct up front will make sure it doesn’t cause a payment delay further down the line. Bank Details – don’t forget to put your bank details on your invoice, this can be an easy one to miss. Record Keeping – you might use an online book-keeping system like FreeAgent or Xero, but if you don’t then it’s important that you keep a log of your invoices – key items to note are: Invoice date Payment date Amount (total and VAT) Invoice number Client name Details of work / project Here are some of our other articles you may be interested in: Limited Company vs Sole Trader 2019/20 Best Salary and Dividend Levels 2019/20 What are the benefits of being VAT registered?