15.11.2021

Invoice by level of trust

Invoicing your clients is a very important part of any client relationship. Failure to deliver correct, easy to pay, timely invoices can be a serious violation of expectations and cause issues in even the best relationships. In this post we'll show you how to do it right by answering the 3 basic questions: What, When and How.

How to invoice

Based on your level of trust with a client, you have the following 3 methods available:

• Trust Level 0: Credit card invoice
• Trust Level 1: Bank Transfer invoice
• Trust Level 2: Saved credit card subscription

Credit card invoice

Adding a credit card form to your invoices guarantee you immediate payment. Trust is relevant on the client-side only if you invoice up-front and not after having delivered your services. Be aware that up-front payments can still be disputed by your client if they feel that you have not honoured your part of the bargain.

If you want to send credit card invoices via ZimTik you'll need either a Basic or Professional license as well as a complete profile. Most importantly your IBAN/SWIFT information must be correct, so that the funds end up in your account.

Once your profile is complete, simply select Credit card as Payment Method in your create invoice dialog:

Bank Transfer invoice

As old as time itself, this is the original form of invoicing. You send your client an invoice which includes your payment/bank details and at a given due date, when they will transfer funds to you. Typically clients will negotiate the due date which can range from 2 days to "6 months from logging the invoice" which is the worst example I've seen yet. In the last case the trust is required on your side: You will have to wait 7 months for your money.

An example from the real world: I subcontracted for a danish IT company over a decade ago. They had agreed to the "6 months from logging the invoice" terms, since this was a large organization partly owned by the government - If you're unfamilar with the Danish Government then be aware that 7 months processing time for an invoice is almost a speed record. In the 7th month we received an email stating that out of a 100k invoice, about 100€ were incorrectly invoiced so they wanted a credit note, new invoice and then an additional 7 months to process.

Saved Credit card subscription

The highest level of trust also gives you the highest level of convenience. For clients with whom you have a strong relationship, they can store their Credit card with us and let you withdraw funds at any time. For freelancers who do a lot of work on retainer, this is the preferred way of collecting payment.

If you want to prime your customer, go to their profile page in ZimTik and generate a link to share with them:

When your client follows this link, they'll be given a chance to configure their subscription and register a credit card. The page will be branded with your name and logo:

You should recommend a maximum charge amount and frequency to your client, based on your history. If you need to invoice an amount higher than the maximum set by the client, the client will need to re-authorize their credit card for that specific amount. If you typically send a weekly invoice, you can recommend a maximum frequency of 6 invoices/month to be on the safe-side.

If your client requires no primer, you can choose the "Credit card subscription" payment method without the customer having configured their subscription. On the invoice itself, they will be presented with a form for the initial configuration.

What to invoice

By default all ZimTik-tasks are created with "Paid overtime". That means even if you've entered an estimate of 10hrs, we'll bill all 15hrs of work if that's how much you've logged. This is typically the most fair way of invoicing but your clients must be made aware of the terms before seeing the invoice.

We go into more specifics in this post, but typically you will either invoice a fixed price (which is your estimate + ~20%) or time/material, which is just your hourly rate multiplied by the number of hours put in. No method is better than the other, so always choose that which your client is most comfortable with.

Some clients prefer to maintain a deep insight into how time is spent. By default, each row on an invoice is the title of a task included on that invoice. By checking the "Show specifications" checkbox your client is also given access to all worklogs for each task.

Checking this box adds the same checkbox to your invoice, which will present your client with this view:

Where "Found importer" and "Did the import" is the actual workdone and "Import lipsticks" is the only task invoiced".

When to invoice

This is often negotiated on a per-client basis. For new clients we recommend at least partial up-front payment. If the client wants delayed payment because they are "getting an investment" or some such, take that as a Red Flag. If the client does not have funds ready for payment now, there is no guarantee that they will have it once you have completed your work, thus shifting the entire risk to you.

For larger projects that stretch over time, we recommend a 30/40/30 split, or 40/30/30 if you prefer. 30% paid up-front, 40% and some mid-way marker and 30% when the final acceptance test has been cleared. The wording on each stage is crucially important so that you don't end up in a situation, where minute changes deliver over a month also delay your payment a month.

For time/material consulting it is customary to invoice at the end of each month or task.

In all 3 areas of invoicing make an effort to set clear expectations. Few clients will complain about a 50k invoice, unless they were expecting a 10k invoice.

Happy freelancing!