How to invoice clients and deal with late payment

A freelance invoice should say who the supplier and the customer are, describe the work, show the relevant dates and charges, and have a unique invoice number. VAT invoices have extra requirements. Make the agreed due date and payment method clear too. GOV.UK: required invoice details.

You’ve done the work. Getting paid should be the easy part. The best time to avoid confusion about payment is before the project starts, so agree:

• who is paying

• what you’re charging

• whether VAT applies

• when the money is due

What must a freelance invoice include?

Your invoice needs:

• a unique identification number

• your details

• the customer’s name and address

• a clear description

• the supply date

• the invoice date

• the amounts charged

• VAT, where it applies

• the total owed

If you’re a sole trader, include your own name and any trading name. If you use a business name, include an address where legal documents can reach you. Limited companies must use their full registered company name. VAT invoices have extra requirements. GOV.UK: required invoice details.

Make the due date and payment method obvious too. Ask whether the client needs a purchase order or a particular billing reference. Give each line enough detail that someone who isn’t involved in the project can understand the charge.

For example, “Website copy: three agreed pages, project ABC, milestone two” is easier to approve than “Services”.

Invoice at the agreed stage

Your agreement might allow an upfront deposit, invoices at set milestones or payment once the work is complete. You don’t always need to wait until every part of a large project is finished.

Use an invoicing system or a template you’ve checked. Keep a copy, and record payments against the invoice. A PDF can keep the layout intact, but it doesn’t protect against editing or fraud. If bank details change, check them through a channel you trust.

If payment is late, work through the basics

First, check the due date, and whether the payment has already arrived under a reference you didn’t expect. Then make sure the invoice reached the right team, and ask for a specific payment date.

A short message can be enough:

Hi, invoice CH-104 for £1,200 was due on 10 October. Could you confirm when payment will be made? I’ve attached the invoice again. Please let me know if anything is holding it up.

If there’s a dispute, ask exactly what’s being disputed and keep the conversation in writing. Thinking about pausing work? Check the contract before you do.

Interest and compensation may apply

For qualifying late commercial payments, statutory interest (interest set by law) is 8 percentage points above the relevant Bank of England base rate. If your contract has its own interest arrangement, that can affect whether statutory interest is available. The rules are for commercial debts. Don’t apply them automatically to invoices for consumers. GOV.UK: late-payment interest.

Fixed recovery compensation, a set amount towards the cost of recovering the debt, is normally:

It’s normally one fixed amount for each qualifying late payment. It isn’t a new fee for every reminder you send. GOV.UK: recovery costs.

When no payment date has been agreed, statutory timing rules apply. Check them, rather than assuming every invoice is overdue as soon as you’ve sent it. GOV.UK: when payment becomes late.

If reminders don’t work, consider the right route for the contract and the legal system that applies. That might be a complaint, mediation or legal action to recover the money. Keep these together:

• the invoice

• the agreed terms

• evidence that you delivered the work

• your correspondence

Clear records make any next step easier.