Freelance invoices

Discussion in 'Indie Business' started by zoombapup, Dec 7, 2010.

  1. zoombapup

    Moderator Original Member

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    Hi guys,

    I've got a freelancer doing some work for me. I was wondering about how I can easily get them to submit and invoice and pay them whilst keeping it acceptable for the accountants.

    He wants me to pay via paypal (which is reasonable), but what documentation do I need him to supply? I'm thinking a work-for-hire agreement is needed, plus something that says how much the invoice is for and what it incorporates.

    But is it legal to use email for invoices? or do they have to be on paper? I guess I get plenty of electronic invoices for software, so maybe it doesnt have to be on paper.

    Anyone got any experience on UK invoicing?

    Ta.
     
  2. Stropp

    Stropp New Member

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    I use MYOB to handle my accounts and invoicing to my clients, and simply create a PDF file of the invoice that I email to my client. The client is free then to print out the invoice if a hardcopy is needed.

    If I'm going to see the client personally to deliver something, then I may also print out the invoice myself and present it in person. If the client doesn't have email I'll just print it and mail the invoice. That hasn't happened yet though because, well, who doesn't use email these days.

    I'm not sure about the regs in the UK, but here in Australia emailing an invoice is perfectly acceptable.
     
  3. Nutter2000

    Original Member Indie Author

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    From my experience (from contracting for other firms and also being married to a tax adviser (that's an accountant type not HM scum and thieves btw ;) ), what the accountants want to see is a document trail so that they can link up an invoice to your payment.
    What you need to do is get him to present you with an invoice, electronic or otherwise, then you will most likely need to print it out and keep it with your records for your accountants at the year end.

    I think a couple of years ago a judge ruled that emails are legally binding now but don't quote me on that, IANAL, YMMV, BYOB, etc ;)

    What I do is make an invoice out in word, then save it as a pdf and attach it to an email to a client.
    Often I'm not going to present it in person because they're one end of the country or another!
    This has worked fine for the past few years. I just printed and posted it to them before that.

    If you don't know him very well then I guess you probably need to agree on the work to be done and write it down in an agreement, otherwise it's not mandatory just depends how much of a risk you think it is.

    General minimum in my experience is to get the contractor to sign an NDA and get them to send you an invoice. If they're VAT registered then it needs to have their VAT details on the invoice.

    You would probably be best to have a chat with your accountants though, I'm sure they've dealt with this before.

    Iain
     
  4. luggage

    Moderator Original Member Indie Author

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    An invoice is perfectly fine as an email. We print two copies, one for our records, one for the accountant.

    More important than the invoice is making sure they agree to sign over the copyright of the work. You have to explicitly sign away copyright unless you're a full employee I believe.
     
  5. Grey Alien

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    Also if you keep your own books, you don't even need to give the accountant all the invoices, just a summary of debtors, creditors and bank account statements and they'll do the rest. You could in theory make it all up. You don't even have to print it out unless you get inspected by HMRC which doesn't happen to very many people. But obviously the purpose of inspections is to put people off making it all up. I keep mine legal out of paranoia (and a sense of moral correctness), but I bet some people get away with crazy stuff.
     
  6. Nutter2000

    Original Member Indie Author

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    You are obliged by law to keep your source documents and accounts for 7 years (6 years from the filing date, in simple terms, but a little bit more on top in practice).

    You're also supposed to have a review by HMRC every 3/4 years but in practice, I think, it's done by random sampling unless you're flagged as doing something dodgy.
     
  7. speeder

    speeder New Member

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    Your laws there seemly are better :p

    I am not even bothering with the laws here, they are almost impossible to follow (for example you have to keep documents for 20 years, and this year only they changed the way how "invoices" work 3 times, in totally radically different ways).
     
  8. gormlai

    gormlai New Member

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    I live Denmark, and I always send my invoices electronically. My accountant also accepts electronic / scanned copies of all my invoices and expenses, and I have never sent him anything on paper (except for a signed copy of the company accounting once he has made it).
     
  9. Indiepath

    Indiepath New Member

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    If you are charging VAT then you *must* raise a VAT invoice for the work done - it's important for your books and the third parties books. Otherwise, as Grey Alien suggested, it is acceptable to summarise. Personally I always raise invoices - heck, it takes 5 minutes and makes accounting so much easier.
     
  10. zoombapup

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    I'm not charging, I'm paying out. So I just wondered what was required to accept from them in terms of invoice.

    Seems like a simple email invoice will work. I'll phone the tax people tommorow to confirm though.
     
  11. Indiepath

    Indiepath New Member

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    Same applies - if VAT is not specified on the invoice you receive and you are VAT registered then you may not be able to claim it back. Likewise - you may recieve an invoice with VAT added but it should not be as the supplier is not VAT registered... Oh the fun of accounting :)
     
  12. AnthemAudio

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    If the payment is through PayPal I'll just send an invoice through PayPal's invoice creator. It's an invoice and a payment request in one.
     
  13. Qitsune

    Qitsune New Member

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    I like sending pdf invoices, I find they look more professional if they have to be taken out of the e-mail software, for exemple, to send to an accountant, and I'm sure they print with proper formatting. Your contractor can probably produce them easily.
     

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