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Self employed invoice template for hours worked for corporations

what's an invoice why are they important how do I even create one these are the three questions that we're going to be covering in today's video and at the end I'm also going to share what are the main questions that I had about invoices when I started and things that I've learned along the way while you're working on my own business if we haven't met nice meeting you my name is Julia and I am a former managing director of finance and side Hustler turned into full-time business owner and a big chunk of what I did at my corporate job involved handling invoices things like calculating how much to invoice our clients sending invoices receiving invoices making sure all of our vendors were sending invoices in the correct time frame asking our vendors to include a description on their invoices so I knew what the invoices were for making sure all of our accounts payables and receivables were being handled correctly you get it there's a lot of invoices but let's take a step back what is an invoice so an invoice is a document used in business to officially request payment for services that you provided or for goods that you sold to a business so let's look at this every transaction has two sides a buyer and a seller the seller provides goods or services to the buyer in exchange of money but how much exactly and what for again and how many days does the buyer have to pay the seller where should I send a money to And to clarify All Those Questions the seller sends a financial document to the buyer called the invoice outlining the description of the services the amount that they are requesting and the bank account details and how many days and all the information needed so the buyer can actually send money to the seller after this the buyer sends the cash to the seller and the transaction is complete think of it as a professional way of saying this is what I did and this is what you owe me great now you know what invoices are but why are they important so let's assume that you are the seller you want to receive payment as soon as possible for the services provided right so it's your responsibility to formally request payment for the service or the goods that you sold things such as how much the service costs for what exactly what is the description of the work that you perform in which time frame was this performed and how many days does the buyer has to pay you based on what it was agreed upon on your contract agreement I mean it's just naive for you to think that the buyer is going to chase you to pay you right you need to form Ally request that payment you know that one friend that will never pay you unless you V request them exactly that's the same thing here you have to formally request the buyer now let's reverse roles and let's think that you are actually the buyer and you hired Services you have so much going on in your company in your small business that if you don't have a formal request to make a payment you might forget I trust that you an honest person you want to honor your vendors and you actually want to establish a a good relationship with your vendors if you don't pay them they will likely not want to work with you again so it's on your best interest to also submit payment as soon as possible the thing is sometimes you might just forget if you don't have that document in place let's think that you work with the big finance department and you need to tell someone to submit payment you need something to provide to the finance department and say hey the service was provided to me last month I have 10 days to pay this person please wire the money so an invoice helps us to track Hol it is when you think about it accounting wise an invoice also triggers a transaction an accounting transaction in both the buyer and the sellers accounting systems which means that will help the seller and the buyer to track their accounts payables and accounts receivables imagine that you are not tracking all the money that you owe people that you need to pay people and suddenly you don't have enough cash in the bank account because you forgot all the debt that you had or imagine that you were a seller and suddenly you forget to charge people for the services and you don't know who you need to charge and how much things just get really messy an invoice especially if you're working with an accounting system helps you keep organized and there's also the component of taxes depending on the goods and services that you sell depending on your activity and your location your state and your jurisdiction you might have to pay sales tax you might have to pay other types of taxes and an invoice helps you track the taxes so you can then send them to the government okay so now you understand what it is and what's important next how do you create one let's go do this together so when we are talking about invoices there's not a whole lot of mystery one option is to Google invoice templates and you'd see exactly what an invoice looks like this is one done in canva you can download it and you can recreate it yourself on word Google Sheets actually have a great functionality so when you join Google Sheets the first option here is an invoice template you can click on the invoice template and simply include your personal data to send an invoice so here you would add your name your street in address your phone number the invoice who's payable to the project the due date the invoice number an invoice number is usually something that you add so both the seller and the buyer know which invoice we are referring to and it can keep the system more organized you would add the description here the unit price the quantity and the total price any adjustments any taxs you included here you can download this as PDF and send via email and then the third option and the one that I usually do you can create an invoice using a system such as QuickBook and QuickBook already calculates the total for you and You' save and you would end up with something like this that is already connected to your accounting system so you don't have to use QuickBooks you can use netsuite you can use any other Financial system that you have the advantage of creating an invoice inside of an accounting system is that it will be automatically connected with your revenue and your accounts receivables and in here you have all the information that you need to show your customer which is in this case John Smith so this is an invoice from Olivia's copywriting this is a fictional QuickBooks account that I created for the sake of this channel we can see all Olivia's information we can see John's information we also have all the details of the invoice this is invoice 10:01 we have when the services were delivered the date of the invoice and this is a net 30 invoice Olivia and John probably agreed on their contract the net date of payment terms so it's a net 30 do invoices due on December 7th we have the description of the services we have how many hours Olivia worked on this project she did website copywriting so she wrote the copy for a lending page for John the total of the invoice Olivia happens not to have sales taxs and John also has the bank account details to then wire the money a that money to Olivia and complete the payment so this is a perfect example of an simple invoice that you can create and send to your clients to receive payment on time and correctly great we got it to the end and here are the main questions that I had about invoices when I started working with them are invoices legally binding and the answer is no not by themselves an invoice is primarily a financial document not a legal document that tracks a financial transaction it can be very useful and help you in case you need to go to court or in case you need to dispute an invoice or in case you need to start some sort of legal transaction because there a paper trail of an activity but to protect yourself and I'm not a lawyer so I suggest you talking to a legal person but from my experience it's really important that you have a contract in place if you want to make your deal with the buyer legally binding an invoice will help you sustain what you already agreed on the contract upon the terms the scope and how much you agree to charge for your services second are invoices require for all types of business and the answer is also no think about the last time you went out to buy coffee in your local coffee shop I don't think you left the coffee shop with an invoice and the reason is is after you complete payment usually you get the option to get a paper receipt or a receipt sent to your email as proof of the transaction the difference here is that a receipt is usually proof of a transaction that already happen you already paid and an invoice is used when you want to charge something for a future payment that needs to happen third how do I send an invoice and there's no one answer fits all in here my recommendation is ask the buyer how they want to receive the invoices I've worked with accounting departments in the past that had established this one specific email to receive all the invoices it's usually like an AP An accounts payables email and if you don't manage to successfully send an email and an invoice attachment in a PDF attachment to that specific email that company cannot process the invoice they would pretty much lose your invoices and you'll never get paid and I also send invoices via slack or WhatsApp messages and in a non structure form at all so the thing here is talk to the people that you are working with and ask what is the best way what is the recommended way for me to send an invoice and finally how do you handle International invoices so you can either be working with someone outside of the US or you could be providing services to people who are outside of the US and my recommendation here is if if you are the buyer be very clear with what you need what is the type of invoices that you need your Freelancers and people working outside of the US to provide to you I usually send a template of the exact invoice that I want outlining what I want in the invoice so I can process this in my accounting system you can assume that everybody in the world will understand what an invoice is and what information you're looking for the same thing goes if I am providing services to people outside of the US or even in other states sometimes I ask what exactly is the method of invoice of requesting payment that they required of me so we are all aligned again the main goal that you have here as a freelancer as a seller is to get paid as soon as possible and you want to be as clear as you can in your communication to help that payment to happen so this is it for today I hope this was helpful let me know what you think in the comments see you next time