Many independent contractors forget to include at least TWO of these important costs in their invoices.
What happens next? They lose out on money…
Don’t fall into that trap!
Here’s what you need to include to protect yourself and prevent cash flow issues:
✔️ Scope creep. Mention any changes or additional work beyond the original agreement to avoid unpaid work. Remember, changes or additional tasks that differ from the original agreement should be documented and communicated to the client to avoid performing unpaid work that can impact your bottom line.
✔️ Expenses. It is common to incur expenses during a project. To recoup these costs and maintain profitability, include all reimbursable expenses in your invoices.
✔️ Time spent on communication. Communication is an important part of project management, but the hours spent on calls, meetings, emails, and messages can easily be overlooked. Account for the time spent on communication activities to accurately reflect the effort put into client interactions.
✔️ Overhead costs. Allocating a portion of your overhead expenses, such as utilities, equipment, and administrative costs, in your invoicing helps cover the operational costs of running your business, ensuring it remains sustainable in the long run.
✔️ Late fees. Set clear payment terms and add late payment fees to encourage clients pay on time.
Need help with creating invoices? Our comprehensive guide on how to create professional invoice templates has got you covered!
