Talent Development Centre

Tag Archives: invoices

All Talent Development Centre posts for Canadian technology contractors relating to invoices.

Should IT Contractors Charge for Their Breaks?

Should IT Contractors Charge for Their Breaks?Sorry to break this to you, but as critical as your role may be to your project, you’re not that important. Yes, even you deserve and can afford to take a break throughout the day, and you shouldn’t feel guilty about it. In the same way athletes require a break to recharge muscles, so do office professionals to recharge their minds. We recently published a post about the benefits of taking breaks and some tips on maximizing those benefits. As an IT contractor, it all may be a great idea but can raise an additional question — how do you charge your client when you take breaks?

In the simplest and most straight-forward terms, as an independent contractor, you should only charge your client for the time you are working for them. Most clients only require timesheets to say the total hours worked per day (or even a period) but you may come across some who want to see a breakdown of your hours worked. In theory, separating every chunk of time and submitting it to a client would be easiest to demonstrate your productivity; however, that is not a practical solution. Especially if you follow the “microbreak” strategy of time management and take 5-minute breaks every 25 minutes, that is going to be a long, complicated timesheet. It’s more common for independent contractors to charge in increments of 15 minutes and adjust their time for the entire day. For example, if you worked 8-4 with six 5-minute breaks throughout the day, you would only record 8:00 to 3:30, which makes up for the half hour worth of non-productive time.

There may also be a grey area in what is considered a “break” and what is billable. For example, some independent contractors eat lunch at their desk and deem that time as working so do not record a lunch break. In these cases, you must ask yourself how available and productive you actually are. Although you are sitting at a desk, if you’re busy eating and ignoring phone calls or emails, it is technically a break. On the other side of the coin, everybody’s day consists of a couple quick personal phone calls and of course “nature breaks”. Should your client really nickel and dime you for such situations? Finally, when you take a quick 5-minute walk to clear your mind, you’re sure to return more energized and productive. Given that quick bit of exercise was in your client’s best interest, can you charge them for it? How you respond to those questions is a combination of your personal ethics and the agreement between you and your client, but it is important to be aware of your activity.

Tracking your breaks can be an eye-opening experience, on both extremes. You could learn that you are over-charging your client or realize that you should add some breaks into your day. Tracking that time is as simple as keeping a spreadsheet or notebook. You can also download a time management app that lets you quickly turn on and off your work time. Though you’re unlikely to charge your client 6 hours, 41 minutes, 4 seconds, seeing that final time will hopefully make you think twice before billing out an even 8 hours.

An honest and open time management system is crucial to a working, trusting relationship with clients and staffing agencies. No ethical independent contractor is out to rip of their client, nor do they want to rip off themselves by undercharging or failing to take care of themselves with proper breaks. How do you manage breaks and time entry with your clients?

Keep Cash Flowing – Avoid Invoicing Mistakes That Keep You From Getting Paid

This post by Janet Berry-Johnson first appeared on the FreshBooks Blog on August 30th, 2016

Keep Cash Flowing: Avoid Invoicing Mistakes That Keep You from Getting PaidRunning a business is a balancing act. You’re focused on providing top-notch services, keeping clients happy, paying the bills, preparing for tax time and juggling a million other demands to keep your business moving. As if that wasn’t enough, you also need to keep up with invoicing to make sure you get paid. We agree—billing is a time-consuming chore but it’s one of the most crucial functions of any business. If you neglect to do it right, it will affect your cash flow.

Invoicing isn’t just a matter of catching typos and ensuring it’s sent to the right client. A mere error on your invoice can result in delayed payments, miscommunication and loss of client satisfaction. Communicating the terms and promptly sending invoices are some obvious ways to ensure your billing is accurate and complete. Here are a few other invoicing mistakes you perhaps haven’t considered.

You Didn’t Upload a Logo (Or Don’t Have One)

If you don’t include your logo on each and every invoice you send, you’re missing out on a simple branding opportunity. We live in a visual world. Even down to the minute details—like invoicing—there’s no exception. Many people spend hours of their days on website design and business cards, but spend very little time thinking about how their invoices represent their brand.

Consider this: your invoice is potentially your last contact with your client, so it should reflect the same branding and attention-to-detail as your website and printed materials. Take the time to create a beautiful, clear invoice—your clients will appreciate it!

You Forgot to Add a Due Date

Many invoicing templates include the generic wording “Payment due in 30 days” or “net 30.” Those phrases seem simple enough: if the invoice is issued on July 30th, payment is due on August 30th—right? Actually, to ensure you’re actually getting paid on time, consider communicating the due date a little clearer.

Consider the situation from an accounts-payable perspective. First, your client has to locate a date on the invoice. They probably receive many invoices each month. After they’ve located the due date, they need to establish the payment terms, which may or may not be located near the invoice date. Maybe the payment terms aren’t included on the invoice at all. Then, the client has to calculate the due date based on these two pieces of information.

When you consider how many invoices an accounts payable department processes every day, it’s easy to see how a wrong due date may be entered. To make matters worse, many accounts payable systems default to the current date as the invoice date. The current date will always be later than the actual invoice date, so unless your client takes the time to enter the information correctly, your invoice will be paid late.

The solution? Make it as easy as possible for your client by providing a clear due date on each invoice. Consider writing the due date clearly at the top, and including additional payment terms below.

Adding this information in a prominent location will make it less likely that your client will enter inaccurate information in their accounts payable software.

You Sent Your Client a “Surprise” Invoice

Some people love a surprise, while others not-so-much. But no one enjoys a surprise invoice—rather, a charge they didn’t expect.

If your client is asking for additional work or it’s taking longer than originally planned, notify them immediately. Never send a surprise invoice without informing your client ahead of time. Perhaps your client expected to pay for your time, but didn’t know you’d be billing for expenses. Or, maybe you initially thought the project would take five hours, but it took 10 instead. Whatever the issue may be, don’t keep your client in the dark. Contact your client, outline the changes and have a conversation. Chances are they’ll appreciate you were forthcoming and explained the billing charges to your invoice. Remember: transparency is key.

You Failed to Follow Up

Ask most entrepreneurs what their least favorite task of their business is and most will say “collections.” Following up on accounts receivable is an odious chore, yet one that is absolutely crucial to the health of your business.

No matter how accurate and detailed your invoices are, you will occasionally encounter a client who doesn’t pay on time. Once a payment is past due, you have to choose between getting paid or potentially irritating the client and damaging your relationship.

That’s why it’s important to have a procedure in place for following up on late payments and to adhere to that procedure consistently.

Some business owners prefer to call the client  with a friendly reminder, others wait a week or two past the deadline. Either way, your initial contact should be a friendly reminder. In most cases, this reminder is all it takes to have your invoice paid promptly. Perhaps your invoice was lost in the mail or was redirected to your client’s spam filter. The customer reads your email or takes your phone call, is apologetic and sends the payment that day.

If you have customers who are chronic late payers, perhaps they need a little financial motivation to pay on time. In that case, you can set up Late Payment Fees to charge after it is past due. You can even enable or disable late fees for specific clients if you’d rather not apply the policy to everyone.

If you do choose to initiate late fees, clearly communicate it immediately. Remember, as we explained above, surprises are never a good thing when it comes to invoicing! Ultimately, billing is about getting paid and nothing is more important to optimizing your company’s cash flow than your invoicing process. Good invoicing practices keep revenue flowing into your business. No matter how many you issue, if those invoices are not getting paid, you won’t have the cash you need to pay your employees or purchase the products and services your business needs to keep going.

About the Author

Janet Berry-Johnson is a CPA and a freelance writer with a background in accounting and insurance. Her writing has appeared in Forbes, Parachute by Mapquest, Capitalist Review, Guyvorce, BonBon Break and Kard Talk. Janet lives in Arizona with her husband and son and their rescue dog, Dexter. Outside of work and family time, she enjoys cooking, reading historical fiction, and binge-watching Real Housewives.

5 Accounting Tools for Independent Contractors

5 Invoicing and Accounting Tools Great for Independent ContractorsInvoicing and accounting are unavoidable tasks for all independent contractors.  Even if you have an accountant, you need to keep yourself organized on a regular basis to avoid headaches, keep costs down, and make sure you get paid. Perhaps the best way to do this is by finding an accounting software that works for you and your business.

In a recent article on Entrepreneur.com, Andrew Cravenho, CEO of CBAC Funding, analyzed five different accounting tools that would be perfect for helping independent contractors manage their books.  Below is a summary of his review.  Take a look through and let us know what you think in the comments.

1. FreshBooks

Forbes has called this tool “incredible, user friendly,” thanks to its ability to make accounting tasks fast, easy and secure. FreshBooks is a great tool for new entrepreneurs.

With Freshbooks, you can track time, create and send invoices and capture expenses in minutes. There are unique features, as well: FreshBooks allows you to see if a particular client has viewed your invoice. In addition, you can schedule recurring invoices, accept credit cards, track monthly expenses, generate estimates and capture billable hours using this tool.

The company claims that its customers have “doubled their revenue in the first 24 months,” using FreshBooks. Apart from providing award-winning support and webinars, the software even offers a find-an-accountant map.

This accounting software costs $19.95 per month, and offers a 30-day free trial for new customers.

2. QuickBooks

QuickBooks offers everything you expect in accounting software. From invoicing to bill management and payroll, it covers them all. Better yet, with this tool you can access reports like profit & loss and balance sheets. You can prepare tax/file forms, accept online payments and print out checks.

QuickBooks also can be integrated with various apps, including PayPal, LivePlan, Constant Contact and Square. Its Small Business Center is a great place to seek advice as well as to connect with your local Quickbooks expert.

This accounting software too offers a 30-day free trial and its monthly plan starts from $9.99. QuickBooks allows you to choose and pay for the features you need.

3. Wave

This cloud-based, integrated accounting software is specially designed for freelancers, entrepreneurs and small business owners. In fact, more than 1 million entrepreneurs and small business owners trust Wave to track their income and spending.

Wave provides easy-to-understand invoicing and accounting software, approved by certified accountants. Apart from invoicing, it offers payroll, payment and personal finance software to help you manage your money properly. Using Wave, you can create business reports such as sales tax reports and balance sheets. In addition, it allows you to keep your records by uploading money receipts into your account.

There is an online forum for Wave where you can find insightful articles, helpful tips and important data for small business owners. It can even help you find a certified accountant in your particular area.

The best part of this accounting tool is that it is 100 percent free.

4. Zoho Books

Small business owners especially will find this intuitive accounting software helpful. Zoho Books allows you to send out professional invoices, track your business expenses, accept online payments and automate banking processes such as scheduling for bills, and reminders.

Zoho also helps you calculate taxes and offers a time-tracking tool, which you can use to manage timesheets as well as track reimbursable hours. You can even send quotes and/or access customer data from anywhere, at any time. It can be integrated with payment gateways like PayPal, Square, Stripe, Authorize.Net and more.

Zoho Books offers a flat $24 plan per month and a 14-day free trial.

5. Invoicera.

Invoicera offers different features for small business owners, enterprises and freelancers. You can create customized invoices using this tool, as well as manage cash flow, control expenses and receive online payments.

We found Invoicera’s task management tool to be its most striking feature: Using it, you can track time spent on a particular project. Though the idea of a time-tracking tool is nothing new, what Invoicera does differently is allow you to assign and evaluate tasks in order to enhance productivity.

Freelancers or new entrepreneurs working with three or fewer clients may use this accounting tool for free. Premium monthly plans start from $19.95.

The 7 Legal Documents All Freelancers Need

This article originally appeared on the Freshbooks Blog on March 10th, 2015

Freelancing is often spoken of as the “Wild West” of the employment world. Freelancers “go rogue,” and they “ride off into the sunset” to enjoy their new lives of unparalleled freedom and opportunity.

But the problem with this common perception isn’t just that it’s usually wrong (just ask any working freelancer how long flying by the seat of your pants will keep you in business!). It’s also that this mentality prevents many new freelancers from seeking out the legal guidance and documentation needed to launch their businesses correctly – putting them at risk of future fines and litigation.

Whether you’re a total newbie or an experienced freelancer, making sure that you have the following documents on file – as applicable to your situation – will help keep your company safe:

Document #1 – Business license

Ironically, we’re starting an article on the legal documents all freelancers need with one that doesn’t actually apply to all businesses. But if your company is subject to permit or license requirements, it’s so important that you have them in place that we’ve decided to include these documents here anyways!

Business permits and licenses come in many different forms. In some areas, you may be required to have a general business license from your city or county to run a company. In other cases, your profession may dictate your licensing requirements – plumbers, contractors, estheticians and accountants are just a few of the freelance occupations that require a permit to demonstrate proficiency.

Whatever type of business you’re launching or wherever you live, check with the websites of your city, county or state to understand your permit and licensing requirements.

Woman looking at legal documentsDocument #2 – Business registration

You’ll also want to be sure you’ve registered your company according to your desired structure and the rules governing business registration in your area. Though there are many potential freelance business structures, most fall into the following categories:

  • Sole proprietorship. Registered on an individual basis, a sole proprietorship allows you to register a “doing business as” (DBA) name for your freelance service.
  • Partnership. If you’ll be working with a business partner, this business registration structure provides you some legal protection, but does come with additional tax reporting requirements.
  • Limited liability corporation (LLC). An LLC can be formed by a single person or multiple parties, but serves the purpose of protecting the owner’s personal property in the event of legal action without the effort involved in registering a full corporation.
  • C corporation. This common form of corporation isn’t often used by freelancers, as it requires extensive filing and taxation documentation, and can lead to double taxation of company earnings.

A small business attorney is the best person to advise you on choosing a business structure, while your city, county or state’s website will tell you how to register your new company.

Document #3 – Company bylaws or operating agreement

If you decide to structure your business as a C corporation, you’ll be required to have company bylaws on hand. If you go as an LLC, you’ll need to submit an operating agreement with your business registration (in most states). Templates for these documents are widely available online if you need help getting started.

But even if you don’t meet these filing requirements, it’s not a bad idea to outline your company’s structure, ownership and policies in some type of document. Even if it’s nothing formal, thinking through these important issues up-front can help you to identify and resolve potential complications before they become major challenges.

Document #4 – Project contract

Once your business is licensed and registered, your next priority should be the creation of a project contract. Too many freelancers operate on emailed assignments and “handshake promises,” but these mechanisms won’t protect you in court if something goes wrong with a client.

Your project contract doesn’t need to be packed with complicated legalese – it just needs to contain the following elements:

  • The scope of the project
  • Any important deadlines
  • How and when payments will be made
  • Who will retain ownership of the finished product
  • What marks the successful completion of the project (or, how will the project end if one party needs to cancel early)

Go into as much detail as possible when drafting your contract. For example, don’t just include the amount you’re billing for the project as stated, include any other charges you may assess, such as late payment fees or additional costs for project scope changes. It may seem time-consuming to put together a good project contract, but once you’ve done it the first time, you can use your new template again and again – protecting your business each time it’s used.

Document #5 – Invoice

You’ve probably already guessed that, at Freshbooks, we’re pretty big on invoices. Having an invoice increases the odds you’ll get paid compared with not issuing a formal invoice, though there are a few techniques you can use to up your chances of getting paid on time even further.

Based on our analysis of the tens of thousands of invoices paid through our system, we can confidently state that your invoice should include the following elements:

  • A polite, genuinely appreciative message. When analyzing invoices, we found that a kind message like “Please pay your invoice within fifteen days” or “Thank you for your business” increase the percentage of invoices that were paid by an average of 5%!
  • “Days” versus “net.” Minimizing confusion will keep your invoice at the top of your clients’ “to-pay” file, so state your payment expectations in days due (for example, “within 15 days”) rather than net terms (as in, “net 15”).
  • Include late payment interest charges. Ironically, we’ve found that including a late payment fee on your invoice results in your invoices being paid slower, but with a higher percentage payment rate. Use your judgment here. If you need the cash right away, skip the message, but if you can wait a while, include it to improve your odds of getting paid.

Document #6 – Non-disclosure (NDA) or confidentiality agreement

This recommendation won’t necessarily apply to all freelancers, but even if you don’t need to provide them to clients yourself, there’s a good chance you’ll encounter them and be asked to sign them as you work with customers.

Essentially, both of these agreements protect the privacy of any sensitive information that’s exchanged between your company and your customers. If, for example, a client had to provide you with their financials throughout the course of your work, you may be asked to sign a confidentiality agreement. Alternatively, if you bring on an independent contractor to help develop the game you’re building as a freelance coder, an NDA will prevent the contractor from sharing your idea with others.

Document #7 – Independent contractor agreement

Finally, if you find yourself in the position of working with independent contractors, consider putting a legally-binding agreement in place that captures the details of your arrangement in a central location. Much like your project contract, your independent contractor agreement should describe the nature of your work, how much money will be changing hands and what your expectations are in terms of deadlines, final ownership and more.

While you can find templates for many of these documents online, it’s still best to consult with a small business attorney to be sure your forms will stand up in court. Yes, doing so may be expensive, but your attorney fees will be small potatoes compared to what you’ll pay in fines and litigation fees if your company encounters any legal issues that your documents can’t resolve!

What other legal documents do you have in place to protect your business? Share your suggestions by leaving a comment below.


FreshBooks is the #1 cloud accounting solution designed for small business owners. They help everyone from the most fragile of businesses (many of them one person, first time owners) to the most vibrant businesses, collecting billions of dollars. FreshBooks is designed for service-based businesses. They uphold a longstanding tradition of providing extraordinary customer service and building a product that helps save customers time, pursue their passion and serve their customers.