Fee invoice
Legally compliant accounting for freelancers and self-employed persons
How do you create a correct fee invoice?
Definition: What is a fee note?
Freelancers in particular use the fee invoice as proof of the services they have provided. But what do you have to consider here and which variants of fee invoices are there?
Fee invoice is an important method for self-employed and freelancers to sell their services or products and secure their income. Of course, you can create such a fee invoice as well as offers for your business in easybill.
Fee invoices for freelancers
The fundamental contents
You are a freelancer and would now like to create a first fee note? But what all needs to be mentioned? We show you.
Description of Services: List a comprehensive description of the service or product provided. Also list a date and quantity.
Fee Calculation: Definitely show your fee. Dis can be based on hourly or daily rates or be based on project prices.
Sales tax: If applicable, the sales tax shown on the invoice must be listed. This depends on the type of service provided and the place where the service was provided.
Invoice number and date are mandatory information for the fee note as well as for every invoice.
Payment terms, such as payment due date and payment method, should also be listed to enable and coordinate a flow of funds.
Enter the full name and address of the invoice recipient.
Your own contact details should also be provided so that your customer can contact you at any time should any queries or problems arise regarding the invoice.
The variants of the fee note
Here there are other criteria that lead to the fact that even more forms can be subdivided:
Hourly rate based fee invoice
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The advantage of this method is that the customer only has to pay for the service actually provided.
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One disadvantage is that the client may have difficulty verifying the number of hours the service provider has actually worked.
Flat rate based fee invoice
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The advantage here is clear: the amount to be paid is already fixed before the service provider has started his work.
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One disadvantage is that the service provider may not have enough incentive to get the job done quickly and efficiently, since they receive the same fee regardless of how much time they spend.
Project oriented fee note
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Using this method, the client/customer knows in advance exactly how much he will have to pay and what results he can expect.
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The service provider could potentially have difficulty delivering the service within the agreed budget. Unforeseen challenges could arise.
Commission based fee note
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The service provider has a direct interest in providing the best possible service, as its fee is directly dependent on the quality of the work.
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One disadvantage is that the customer may have difficulty understanding or accepting the fee, especially if it is a large amount.
Factors for the calculation of fees
Some factors that you should definitely consider when calculating the fee are:
- Hourly or daily rate: set an hourly or daily rate that is calculated based on your working hours as a freelancer.
- Project budget: for larger projects, it is often the case that an overall budget is set. This budget includes all costs, including the service provider’s fee.
- Performance-based compensation: The fee can just as well be linked to the service provider’s performance, for example, to the success of the agreed project.
- Industry standard pricing: Look around the market, inquire with other service providers in your industry to get a sense of what exactly would be an industry standard price. Make sure your fee is competitive.
- Experience and qualification of the service provider: The more experienced and qualified you are as a service provider, the higher your fee can be.
It is also important to have a written contract that clearly lays out all the details of the service and the fee to avoid misunderstandings and unexpected costs.
