Workers who perform services on a contract or freelance basis must collect payment upon completion of a job. The most common method is to create a service invoice to submit to clients, outlining the services that have been completed and their associated costs. An organized invoicing system allows independent contractors to keep track of any outstanding payments due and accurately calculate year-end earnings for tax-reporting. Individuals who are not using small business accounting programs such as QuickBooks or Peachtree to generate invoices can easily create them through Microsoft Office.
Browse the list of blank invoice templates available through Microsoft Office by visiting their website, selecting “Templates” at the top of the screen, typing “Service Invoice” in the search field and clicking the “Search” box. The search results will include several downloadable templates for use with Word or Excel.
Select an invoice template and click the “Download” button to download the template to your computer. Be sure to download a template that is compatible with the version of Office that is installed on your PC. This information can found under the “Details” area for the template you are viewing. Once the download is complete, the template will automatically open up using Word or Excel.
Personalize the invoice by inserting your name or your business’s name at the top, along with an optional business logo. Include as much contact information as possible, such as the business address, phone number, fax number, email address and website.
Assign a unique invoice number for tracking purposes and include the current date at the top. This information should be retained for record-keeping and tracking purposes.
Enter a description of the services performed in the body of the invoice and include an itemized list of the charges or expenses. The total amount due for all work performed, including parts and labor, should be clearly listed at the bottom.
Include payment instructions and terms on the invoice so the client is aware of when the payment is due and the appropriate way to submit funds. Typical invoice terms may be communicated by stating “Payment due date: October 15, 2011” or “Payment due within 60 days of invoice date.” Instructions should include all methods in which the client may submit a payment, such as mailing a check or submitting a payment online.
Mail the invoice to the client in a timely manner to ensure adequate time to remit payment. As payments are received, update your records to mark them as paid, as this is the amount that should be claimed as income and reflected on Internal Revenue Service (IRS) Form 1099-MISC.
Contractors with more than $600 of income are required to report their earnings to the IRS.
Offering an incentive such as a discount for early payment may increase their timeliness.