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If you’re a freelancer on the verge of starting a year-long project, you’ll come to an agreement with your client regarding a total price for the work that needs to be done, but you can’t wait 12 months to get paid. With an interim invoice you’ll be invoicing them on a regular basis, be it weekly, monthly, or quarterly, until payment is complete.
Here’s an example:
if the project has a total of $24000 and you and your client agree that you’ll be invoicing them monthly. You’ll send them an invoice for $2000 each month, progressively covering the total of $24000 that you agreed upon.
This is what an interim invoice is. This way you’ll be able to pay for your basic needs, your tools, and membership programs to reinvest in the project you’re working on keeping your client happy along the way. It also helps the client as sometimes they find it better to pay a smaller amount periodically, than one big lump of cash that might be detrimental to their business.
Bringing up an interim invoice while talking to clients is the best way to show that you are a professional in your field, may it be accounting, programming, or content creation, they will understand you are a reliable freelancer. Because a freelancer that knows how to get paid usually has been in the game long enough to have been trusted by other business owners.
To be considered a reliable freelancer you should also make sure that you come to an agreement regarding the scheduling of interim invoices. Have the client know that you’ll be sending in an invoice every 15th of the month, or every Friday if you both agree that you’re to be paid weekly.
Make sure to respect the deadlines you both have set, as this can be a big letdown for clients if you don’t respect the agreements you both came up with and agreed upon. Your word is your passport to other clients, and being sloppy with deadlines, regarding interim invoices, can be one of the many reasons for which someone that you’re working with now, might not want to work with you later. Remember clients have to do their own expenses as well, and unless you are doing their accounting, they need to send them to someone to check over.
Also, interim invoices are good for understanding if your client is trustworthy, cause if they don’t respect the payment deadlines you’ve worked out together repeatedly, why would you continue working with them in the long run.
So, to recap you use interim invoices to periodically get paid for the work you are doing on a long-term project. Ensuring payment for your tools, time, and well-being, while keeping the client in the green. Don’t forget to respect your invoice deadlines, and the client won’t either, this way you’ll both be happy with the work done and you’ll find yourself in a great working dynamic.
Well, you’re in the right place for that, because at Indy we specialize in invoice generation, generically an interim invoice is the same as a classic invoice, with two main differences.
The first difference being that the interim invoices leading up to the final one will be less detailed than usual, as they are agreed upon prior to you sending them. Secondly, the final invoice. The final invoice needs to be very detailed, as this is the end of your project. Depending on the agreement that you have with your client, you’ll add your total amount of hours, the services provided, payment methods, and payment deadlines.
With Indy, you’ll be able to create personalized interim invoices, that will keep you happy with the result, and your client aware that you aren’t only a great worker, but you understand the importance of personal branding when it comes to being competitive in the market.
Generally, you’ll add in the cost that you’ve agreed upon with the client. Let’s look at the previous example where we agreed upon a $24000 12-month project with monthly interim payments.
Each interim invoice you send will be $2000 and doesn’t need to have all the details of the final invoice, as we looked at before. The interim invoices you send over time will have Interim Services in the item field of the invoice, as this is what you have agreed upon prior with your client.
When you’re using Indy make sure to remember this when generating your interim invoices and your final interim invoice, this way there won’t be any confusion between you and your client, ensuring a smooth transition to payment, and a sense of fulfillment from a project completed and well done.
Interim invoices are best used for long-term projects. This way you and your client both have the flexibility needed when investing time and money in the professional endeavors that need to be done. You can find that with interim invoices you’ll have money to work with while you’re busy completing tasks for said project, and your client will have the cash flow needed to keep running their business.
Some of the best things about interim invoices involve the regular inflow of cash, a good amount of capital to invest in the project, and economic relief for the client as they don’t have to pay a large amount of money upfront, an incentive for you to complete your tasks/quotas, and it also helps you see if there are any red flags when it comes to payment.
If you periodically don’t receive payment, you’ll start to understand that it might be better to call the project off, because working for free isn’t what you’re employed for.
When your client is a small business some lateness in payment can happen, and will happen, but having an interim invoice system in place alleviates the burden for the company in question. You won’t be gasping for air at the end of the month, and the company that employs your services won’t suffer major economic losses.
So, the best time to use interim invoices is for long-term projects, don’t be scared to propose this payment plan. If the client isn’t aware of this method of invoicing you’ll make them comfortable with the final price tag you had in mind, making you and the client both happy with the cost for them, and the workload for you.
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