Freelancer & contractor invoicing — questions answered

What should I include on a freelance invoice?

Every freelance invoice needs: your full name and contact information, your client's name and billing address, a unique invoice number, the invoice date, a payment due date, an itemized description of services rendered, the total amount due, and your preferred payment method. If you use Stripe or PayPal, include your payment link so the client can pay immediately without any back-and-forth.

Do I need a business entity to send invoices?

No. Sole proprietors, freelancers, and 1099 contractors can send invoices under their own legal name. You do not need an LLC, S-Corp, or any formal business registration to invoice clients professionally. However, having a business bank account separate from your personal one makes bookkeeping significantly easier at tax time.

How do I number my invoices?

Invoice numbers should be sequential and unique — INV-001, INV-002, and so on. Some freelancers use date-based systems like INV-2026-001. The format doesn't matter; what matters is that every invoice has a different number so both you and your client can reference it easily, especially if there's ever a payment dispute.

What is a pro forma invoice?

A pro forma invoice is a preliminary invoice sent before work is completed — essentially a quote in invoice format. It tells the client what they will owe and is often used to request a deposit. Unlike a final invoice, a pro forma is not a demand for payment and is not recorded as income until it becomes a final invoice.

What does Net 30 mean on an invoice?

Net 30 means your client has 30 calendar days from the invoice date to make payment. It is the most widely used payment term in the United States, particularly for B2B services. Net 15 (15 days) is common for smaller amounts or new client relationships. Due on Receipt means payment is expected immediately — typically used for final deliverables where work is already complete.

What payment terms should I use as a new freelancer?

For new clients, Net 15 or Due on Receipt is strongly recommended. It reduces the time your money is outstanding and limits your financial exposure with clients you don't know well yet. Once you've built a track record with a client and know they pay reliably, you can extend to Net 30 as a courtesy.

Can I charge a late fee if a client doesn't pay on time?

Yes, but only if you stated the late fee policy upfront — either in your contract or on the invoice itself. A common late fee is 1.5% per month on the outstanding balance, or a flat fee (e.g., $25 after 30 days). You cannot retroactively add a late fee that wasn't agreed to. Always put your late fee policy in writing before work begins.

Should I ask for a deposit before starting work?

Yes — especially for large projects or new clients. A 25-50% upfront deposit is standard practice in freelancing. It demonstrates the client is serious, covers your time if the project falls through, and protects you from completing work you never get paid for. Send a pro forma invoice for the deposit amount before starting any billable work.

What is a 1099 contractor?

A 1099 contractor — officially an independent contractor — is a self-employed worker who is not on a company's payroll. Instead of receiving a W-2, they receive a Form 1099-NEC from any client who paid them $600 or more in a calendar year. As a 1099 contractor, you are responsible for your own taxes, including self-employment tax (15.3% on top of regular income tax).

Do 1099 contractors need to charge sales tax on invoices?

It depends on your state and the nature of your services. In most US states, services (consulting, design, writing, development) are not subject to sales tax. However, some states do tax certain services, and if you sell physical products or software, different rules may apply. When in doubt, consult a CPA familiar with your state's tax rules — this is worth getting right from the start.

What information do clients need from me for a 1099?

Clients who pay you $600 or more in a year need your full legal name, address, and Social Security Number (or EIN if you have one) — typically collected via a W-9 form before they pay you. Always send a W-9 to new clients before you invoice them. This avoids backup withholding and ensures both parties are ready for tax season.

Should I use my SSN or get an EIN for invoicing?

Getting a free EIN (Employer Identification Number) from the IRS is strongly recommended even for solo freelancers. You can use it in place of your SSN on invoices and W-9 forms, which protects your identity and looks more professional. The IRS issues EINs instantly online at irs.gov at no cost.

What's the best way to accept payment as a freelancer?

Stripe is widely regarded as the best option for US freelancers — it's easy to set up, accepts all major credit cards, and transfers to your bank account within 2 business days. PayPal is also widely used, especially for international clients. ACH bank transfer (direct bank-to-bank) works well for larger amounts where card processing fees would be significant. Avoid checks — they're slow, can bounce, and are hard to track.

What should I do if a client doesn't pay?

First, send a polite payment reminder by email as soon as the due date passes. If there's no response after 7 days, follow up by phone or message. After 30 days overdue, send a formal demand letter noting the outstanding amount, original due date, and any late fees. If the invoice is still unpaid after 60-90 days, options include collections agencies, small claims court (for amounts under $10,000-$25,000 depending on state), or hiring a collections attorney. The best protection is a signed contract before work begins.

How much should I charge as a freelancer?

A useful formula: take your desired annual salary, divide by 2,000 (annual billable hours), then multiply by 1.5-2x to cover taxes, benefits, overhead, and non-billable time. For example, if you want to earn $80,000 net, your hourly rate should be roughly $80,000 ÷ 2,000 × 1.75 = $70/hour. Research market rates in your specific field on platforms like Glassdoor, Levels.fyi, or your professional community.

Is the invoice generator really free?

Yes, completely free. No account required, no credit card, no watermarks. Generate as many invoices as you need. We are building a paid product with recurring billing, automated reminders, and a client portal — but the free generator will always stay free.

Do you store my invoice data?

No. The free invoice generator runs entirely in your browser. We do not store your client names, amounts, payment links, or any other invoice details. Your data never leaves your device. When you download the PDF, it is generated locally and we have no access to it.

What's coming in the full Invoifly product?

Recurring invoices, auto payment reminders, a client-facing portal, subscription billing management, and revenue dashboards — we build based on what our waitlist asks for. Join the waitlist and tell us what features matter most to you — we build based on what our users actually ask for.