Have you successfully completed your first job as a freelancer? Then it’s time to send your bill. If you are unsure how to prepare an invoice, then you’ll find some helpful tips in today’s article.
Include the essentials
As a freelancer, you supply a specific service to your clients and you want to be paid for it. According to German VAT laws § 14 UStG and §§ 31-34 UStDV, an invoice is any document that claims payment for a service or product provided. You need to invoice your client so that they can pay you accordingly. It’s essential that your invoice includes all of the following details: the names of the invoice issuer and recipient, an invoice number, your tax number, the date, a description of the product or service you provided and the quantity you delivered.
Start with the issuer and recipient
At the top of your invoice, you should include your contact details and those of your client. As in a letter, the name and address of the recipient should appear on the left. On the right, add your contact details, such as company name and address. In addition, you should include your name, company name and address in a smaller font above your customer’s name and address. This text should be underlined.
Specify services or products
In the next section, below the addresses, you should specify the services or products you supplied. However, before you give full details of this, you need to include an invoice number and the date. If you are working for a customer over a longer period of time and invoice them each month or quarter, you will need to pay attention to consecutive invoice numbers. Your invoices must be numbered consecutively and in chronological order. As a freelancer, you can choose whether to use consecutive numbers or letters. The following formats are often used: year + month + consecutive number (e.g. 2019-11-01) or year + continuous number (e.g. 2019-01). To avoid any confusion, it’s a good idea to start with the last digits 01 for each customer, even if you received the order in March.
Now you can list the services or products you supplied. It is best to use a table something like this:
|Item||Description of services||Quantity||Unit||Price per unit||Total amount|
|1||Describe your services here—you can include several lines||8||Hours / Days||€ 85.00||€ 680.00|
The item refers to the individual service provided. It is important to be clear here so that the customer can see how you calculated the final price. The description of services describes what you did (e.g. ‘development of a new website’ or ‘quality assurance workshop’). The quantity indicates how many units you have completed. Freelancers usually charge an hourly or daily rate; you should enter the relevant unit into the table according to how you invoice your client. You should then enter your price per unit (the price you charge per hour or day).The total amount is the number of the units supplied multiplied by the price per unit.
Below this table, you should write the payment instructions. Typically, payment notice is between seven and 14 days. You can formulate the sentence like this: The total amount is payable in full within seven / 14 days of receipt of this invoice.
You should then state the total amount due to the right of the payment notice. Many freelancers apply the small businesses regulation (Kleinunternehmerregelung according to § 19 of the German VAT Law (UstG)), which means they do not have to charge VAT (USt). If this applies to you, you should add the following note: According to § 19 UStG, the invoiced amount does not include VAT.
If you charge VAT, you should write the net amount of your total fees and then add 19% VAT. This is the total amount you will charge your customer.
Include a footer
The footer should be used to include some essential information in your invoice. On the left-hand side of the footer, you should include your address and other contact details, such as your e-mail address and telephone number.
In the centre, you should provide your bank details; your client needs this information so they can transfer money to you. If you have a business account, make sure you enter all the following details correctly: account holder, bank name, IBAN number and BIC code.
You should also include your tax number in the footer. You can find this number on your tax documents. Enter your tax number and, if applicable, your local tax office on the right-hand side of the footer.
To sum up, when you are preparing invoices, it’s important to pay close attention to several things. Make sure you always include the invoice issuer and recipient, invoice number, tax number, date and quantity, as well as the service/product description. Ensure that your invoice is clearly structured and that you remember to include your full bank details and your tax number in the footer.
If you still feel unsure about writing an invoice, you can find examples on the following websites: Rechnung-Muster.de (in German) create.onlineinvoices.com (in English). These websites also provide a templates to help you get started.