The project or billing period is over – so it’s time for billing. For most freelancers that is quite pleasing. In order for the billing to run smoothly for you, we have collected some tips to make it faster and more effective.
Invoicing: Don’t forget the receipts
In keeping up with the bookkeeping standard “no booking without receipt”, you should collect and retain all relevant documents. These include travel expenses receipts, as well as time sheets. Incidentally, these must be signed by the project manager.
The deadlines for invoicing
Invoices have to be kept for several years so that they can be presented at the request of the tax office. For all documents related to the invoicing and for the invoice itself, the statutory retention period of 10 years applies. By the way, digital storage is sufficient. You do not necessarily have to keep one or more folders with copies of the invoices in your office.
The deadlines also include how long you wait until you issue an invoice, because if you really want to, you can take your time. Once the service or the project is completed, you can wait six months before billing. However, we recommend not to wait that long, but to make the bill as quickly as possible. We receive most of the invoices until the 10th day of the following month.
Invoicing: This information is necessary
The tax office requires that the invoice of a freelancer contains certain information. Because only then it is legally valid.
• Full name and complete address of the invoice issuer
• Full name and complete address of the invoice recipient
• Project location and name of the end user
• Invoice number: This number can consist of several numbers and letters. It is important that it is consecutively numbered according to a certain system and that every invoice number is issued only once.
• Issue date of the invoice
• Performance date. This refers to the rendering of the service. For projects that run over a longer period of time it also goes on for several weeks.
• The services themselves. This means the most accurate description possible of the activity for which the invoice is issued. Travel and other costs incurred in course of the project are also listed here.
• Net amount. The total amount resulting from the individual items on the invoice. Here you should pay attention to whether hourly or daily rates have been agreed to for the settlement of the contract.
• Sales tax rate. Depending on the performance either 7 or 19 percent sales tax on the total amount is added. Which rate is used for which service must also be stated in the invoice.
• Gross amount. The total of the net amount and the respective sales tax.
• VAT and tax identification number. At least the tax identification number must be stated on the invoice for it to be legally valid. If the project is already completed, but you are still waiting for your tax number from the tax office, you can note this with a short remark on the invoice (i.e., „tax number requested”) and still bill.
• Account details and term of payment. Although these details do not belong to the taxable mandatory information, they are still very useful. And at least the account number is absolutely necessary for a quick and smooth transaction.
Invoice Ninja: Great tool for IT Freelancers
Who says that you have to do everything yourself? Especially for billing, there are many great tools that can make your life easier. Such as Invoice Ninja. The software is especially interesting for freelancers with IT background. Because its source code is available as an open-source license for all users on GitHub. And it is also possible to host the application itself. Especially with regard to the provisions of the GDPR this is a not negligible advantage.
But there are also other tools that greatly simplify billing for freelancers, too:
- Manta: Limited to the most important functions it is also available as an open source license. In addition, the software is free.
- Debitoor: This software is also available for free and offers only the basic functions, including an API to connect external systems. However, Debitoor prints watermarks with its logo on the invoices. If you want an invoice without watermark, you have to pay for it.
- Billomat: There is also a free, but a paid version, as well (XL rate, 48 euros per month), but it has a whole lot more features such as SSl encryption or project management with Basecamp.
By the way: If you have any questions, please feel free to contact our office management or request our special information sheet on invoicing. All the facts worth knowing are listed there, which you need for a complete bill and thus also a quick payment.