At the top of your invoice

• 'Invoice'
• Your name or business name
• Your address
• Your contact details
• Invoice number
• Invoice date
• Client name
• Client address

A clear, straightforward layout, headed with the word 'Invoice' and followed by your business name, address and contact details, as well as the recipient's name and address at the top, followed underneath by the description of the services/expenses and totals is key to most invoices.

Each invoice should be referenced with a unique invoice number which identifies both the invoice and the client. A standard format is an abbreviated reference to the client preceding a number which can increase each time that client is issued with an invoice, such as LLO001. You could also use a year-based format like 2025/001.

As a sole trader or partnership, your invoices must include your name, your business or trading name, and an address where you can accept the service of legal documents — ordinarily your trading or accountant's address.

In the middle — the work you've done

• A clear description of the services or work provided
• The number of hours or days, and your rate
• Net amount before VAT (if VAT-registered)
• Total amount inclusive of VAT (if applicable)
• Details of any expenses

It's easy to assume that your client will know exactly what you're invoicing them for, but they will probably have at least a handful of other projects going on at the same time. Remove any conceivable doubt about what you're asking your client to pay for. Include any purchase order numbers, project reference numbers, or even just the project name. Instead of writing 'prototyping' for a line item, write something like 'Three remote work sessions to develop customer-facing website prototypes' — describe the work in your client's language.

Including a 'Notes' section on your invoice is also worth considering. You can use the space to remind your client about any positive news about the work you've done. If you launched a new platform for a client, it would be a nice touch to refer to the success of the launch. You can also use this section to cue up what work comes next.

At the bottom of your invoice

• Your payment terms
• Your VAT number (if VAT-registered)
• Your bank details (sort code, account number, bank name)

You should clearly state your payment terms prominently: (1) how you expect to be paid — by bank transfer is now standard, so include your sort code, account number and bank name — and (2) by when, e.g. within 14 or 30 days from the date of invoice. Ask your client to use the invoice number as reference when paying.

As cheques are being phased out, provide your bank details to all your clients, both on the invoice and your accompanying supplier letterhead. The terms for payment should always be established before work commences.

Download the free invoice template here.

VAT: do you need to charge it?

Most freelancers starting out will not be VAT-registered. You only need to register for VAT if your taxable turnover exceeds £90,000. If you are not VAT-registered, you must not show VAT as a nil rate on your invoices or include your National Insurance number — doing so confuses clients' accountants into thinking you are VAT-registered.

If you do register for VAT, your invoices must show your VAT registration number, the VAT rate charged, and the VAT amount as a separate line. If you've applied to register but are still waiting for your VAT number, invoice the customer for the full amount including VAT but without showing VAT as a separate line. Once you receive your number, re-issue the invoice as a proper VAT invoice.

Our VAT section has further guidance on whether you should register and how VAT affects your invoicing.

Getting paid on time

You need to make it clear to all clients upfront what your payment terms are. Your payment terms need to state when the payment for the services must be settled by. This key detail can be put on the invoice. Officially, the payment terms begin when the invoice has been received and accepted.

It's easy to get behind on your invoicing when you're busy running your business and jumping from one project to the next. But clients will wait for an invoice to confirm payment details before they make any payments. The quicker you send your invoices, the quicker you're likely to get paid.

Once your client is ready to pay, you want to have everything ready for them so they can do it immediately. At a minimum, make sure that your invoice has your BACS payment details so they can send you the money directly.

It can be awkward chasing payment if you haven't specified a timescale, so including clear payment terms on your invoice is a good way to get rid of any uncertainty. Research shows that the most effective way to get paid within a week of issuing an invoice is to have zero-day terms — in other words, asking the client to pay immediately. If you don't set a payment date, the legal maximum businesses have to pay is 30 days.

If you're not paid on time

If you're wary of chasing payment, you're not alone. Few freelancers enjoy doing it. But remember: the law is on your side. As long as you're polite and professional, don't be afraid to pursue the matter. Sensible credit control procedures reinforce the ability of your business to operate effectively.

ContractorUK recommends a three-stage escalation:

• 7 days overdue — send a formal written reminder. Be firm, polite, clear and concise. Follow up with a phone call after 48 hours to secure a definite date for payment.
• 14 days overdue — explicitly inform the late payer that they may incur additional fees and charges under the Late Payment of Commercial Debts Regulations 2013.
• 31 days overdue — issue a final demand (Letter Before Action), making clear you will use a debt recovery agency or legal action if payment is not received within 72 hours.

Under UK law, you have the right to charge statutory interest on late payments at the Bank of England base rate plus 8% for business-to-business transactions. However, you cannot claim statutory interest if there's a different rate of interest in your contract with the client.

ContractorUK provides free late payment letter templates you can download and use.