Financial Side of Freelancing

The financial side of freelancing is what I know the least about, so I've researched a little bit about what is involved and other things to think about when freelancing.

A lot of freelancers seem to have a fair few repeat clients which helps to support them, so it is important to treat them well. Bad reputations are easier to spread than good ones, so no matter the situation, one must always act professional and accomodating. Time estimates will need to be given to clients in regards to the completion of work, which will also help in writing invoices.

Agree payment terms up front in writing - contract. Will it be paid in instalments, or all at once?  Save copies of the invoice, and email as well as post the invoice to the clients.

I found a useful sounding list of things to consider in your invoices from http://www.goingfreelance.com/10-simple-ways-to-get-paid-faster/

As a rule, you should be including the following information on all your invoices:

• Your full company name (and logo).
• The invoice date
• The invoice number (This should be unique to each invoice, and preferable sequential).
• Your registered address.
• Your company number (if applicable).
• Your postal address.
• Your client’s company name or name.
• Your client’s address.
• A job reference or purchase order number (if the client have provided one)
• An itemised list of the services you have provided (see point 5).
• The invoice due date (see point 3).
• Your payment details (see point 4).
• A detachable payment advice slip.

And if you’re in the UK and VAT registered you also need to include:

• Your VAT registration number
• An breakdown of the VAT which has been added to each item on your invoice, and the rate at which this has been charged.
• The total amount of VAT charged

Giving vague descriptions of the services you have provided will make it easy for the client to query the invoice and delay payment, whereas providing a detailed breakdown of the work carried out will remind the client and anyone within their organisation exactly what is being invoiced for. It’s also a requirement if you are charging VAT.

I thought it would be useful to look into VAT as well, and the VAT Registration page at give.uk tells me that:

You must register for VAT if: your VAT taxable turnover is more than £82,000 (the 'threshold') in a 12 month period. you receive goods in the UK from the EU worth more than £82,000. you expect to go over the threshold in a single 30 day period.
If you are UK based and not VAT registered then you cannot add VAT to your service charges.