Top 10 Invoicing Mistakes Freelancers and SMEs Make

Top 10 invoicing mistakes freelancers and SMEs make

1. Sending invoices too late

It’s the last week of the month. You have a few more projects to wrap up, and it feels like the whole world is demanding your attention. By the end of the week, you’ve managed to finish everything—finally, time for the weekend!

Oh, wait. You still need to create and send your invoices. And not just one—six! You don’t feel like dealing with that now, so you put it off until halfway through the next month.

But do you realize how much this delay is costing you? Neither do we. But we do know that it’s hurting your cash flow. Here’s why:

• Delayed payments. The payment term only starts from the invoice date. The later you send the invoice, the later you’ll receive your money.
• Lost late fees. If you charge a 15% late fee for overdue payments, you want that term to start as soon as possible.
• Clients get used to it. If customers notice that you always invoice late, they may start treating late payments as the norm.

The sooner you get paid, the healthier your cash flow will be. Want to make sure you never forget to send an invoice again? Use FlowQi’s Invoicing Tool to automatically generate and send invoices as soon as a project is completed.

Sign up for our Beta Program and try all our tools—designed specifically for SMEs and self-employed professionals—completely free.

2. Not using invoicing software

Surprisingly, many business owners still don’t use invoicing tools or software. Instead, they struggle with Word or Excel—when there are much easier solutions available. Using invoicing software can save you time, frustration, and energy.

Make things easier for yourself and take the step toward digitizing your business. It’s not difficult, it’s not expensive, and it’s certainly not impersonal. In fact, by automating your invoicing, you free up more time to focus on building customer relationships and loyalty.

3. Not following up on late payments

You’ve sent the invoice, but the payment isn’t coming in. Now what? As mentioned in point 1, you can send a reminder email to your customer. In that email, you can also specify that a 15% late fee will be applied if the payment isn’t received by a certain date.

Do you find it difficult to track and send reminders manually? Not sure how to phrase them? With our Invoicing Tool, you can schedule automated reminders and follow-ups—so you never have to chase payments again and get paid faster.

4. Not using a unique invoice number

Every invoice must have a unique invoice number—not just for your own records, but also to comply with tax regulations. It also makes life easier for your customers.

Use a logical numbering system, such as 2025001, 2025002, 2025003, etc., to keep things organized.

5. Incorrect or missing details

Always ensure your invoice includes the correct company details, VAT number, and Chamber of Commerce number. If any of these are missing, your customer might reject the invoice, delaying your payment.

Want to make sure every invoice is complete and error-free? Use FlowQi’s digital invoicing tools to automatically include all necessary details.

6. No clear description of services

By law, an invoice must include a clear description of the services provided. Vague descriptions can cause confusion and lead to payment delays.

Be specific—list the type of work, quantity, number of hours, and rates to ensure transparency for both you and your client.

This is an example of an invoice from a graphic designer (note that it includes the word “invoice”):

INVOICE

Sender:
[Name]
[Company name]
[Address]
[Zip code & city]
[E-mail address]
[Phone number]
[Chamber of Commerce number]
[Tax ID]

Invoice details:
Invoice number: 2025-001
Invoice date: February 1, 2025
Payment term: 14 days (by February 15, 2025)

Recipient:
[Customer name]
[Customer company name]
[Address]
[Zip code & city]

Payment details:
Please transfer the total amount to:
Bank name: [Your bank name]
Account number: [Your account number]
Routing number: [Your routing number]
In the name of: [Your company name]
Reference: Invoice number [2025-001]

7. Incorrect tax calculation

Tax mistakes are common on invoices—whether you’re dealing with VAT in Europe or sales tax in the US. It’s important to know which tax applies to your business and your clients, and to calculate it correctly.

In the US, this means sales tax. Here are some common mistakes:

• Charging the wrong sales tax rate for your state or city
• Forgetting to add sales tax when required
• Not showing the sales tax amount separately on the invoice
• Charging sales tax to clients who are tax-exempt

Always check the current sales tax rate for your location and your client’s location, and make sure to display the sales tax amount and total amount (including tax) clearly on your invoice—just like in the example above.

8. No payment term

Without a clear payment term (e.g., 14 or 30 days), your customer won’t know when payment is expected—or when you can charge a reminder fee. Be sure to include a payment deadline on your invoice. Here are a few examples:

• Payment term: 14 days. Please pay by [date].*
• I’m using a payment term of 14 days. Thank you for paying on time!*
• Payment is due within 14 days of the invoice date. Feel free to contact me with any questions.*

9. Forgetting to send the invoice

How does that happen? Well, it happens more often than you think. An invoice left in a draft folder or sent to the wrong person—oops! But this results in delays in your cash flow. Once again, automation is the key to preventing this.

10. Not backing up your invoices

If your records are only saved on your laptop and it crashes, you could lose everything. Store your invoices securely with FlowQi’s invoicing tool. This way, all your invoices are automatically saved, and you can always find them when you need them.

Prevent invoicing mistakes with FlowQi

Sign up for our Beta Program and try all our business software completely free today!