Reviewed September 2026.
Set clear terms before work starts, send invoices the same day a milestone ends, and run a short collections ladder. If someone emails you a fake bill to pay, that is a different problem: How to spot fake shipping and invoice scams.
Put terms in the proposal, not the chase email
| Term | Practical default for many freelancers |
|---|---|
| Deposit | 30-50% before work starts on projects over ~$1,000 |
| Net due | Net 15 or Net 30 (state the calendar days) |
| Accepted pay methods | ACH, card via Stripe/PayPal, or check to business name |
| Late fee | Example: 1.5%/month on overdue balance if allowed in your state/contract |
| Kill fee / pause | What happens if the client freezes the project mid-stream |
| Your W-9 | Send your completed Form W-9 when the client asks (they need your TIN to issue a 1099-NEC) |
Route deposits to hustle checking only (Start without mixing personal money). Irregular clears: Budgeting for irregular income.
Invoice contents that reduce “who do I pay?” delays
- Your legal name or LLC name, address, email, phone.
- Client legal name and billing email (not only a Slack handle).
- Invoice number, issue date, due date.
- Line items with quantities and rates (example: 12 hours × $95).
- Prior deposit applied as a credit line.
- Payment link or ACH instructions on the PDF.
- Late-fee and dispute contact in one short footer.
Tools: HoneyBook, FreshBooks, Wave, QuickBooks, Stripe Invoicing, or a numbered PDF + PayPal link. If invoice volume outgrows your sheet, see When should I hire a bookkeeper vs DIY spreadsheets. Entity name on the invoice may follow an LLC decision. Pick one numbering sequence for the year (2026-014).
Collections ladder (calendar days after due date)
| Day | Action |
|---|---|
| Due date | Auto-reminder from software if available |
| +3 days | Polite email: invoice #, amount, pay link, ask if AP needs a PO |
| +10 days | Call or second email; offer to resend W-9 / ACH form |
| +21 days | Pause new work; written notice that delivery resumes when balance clears |
| +45 days | Formal demand letter; consider small-claims math vs relationship |
Keep tone factual. Save every reminder. For tax season, remember paid income still needs tracking even when a 1099 is late (W-2 vs 1099 tax basics; year-round cash: Side hustle money basics).
Worked example
Devon’s brand project is $4,800. Contract: 40% deposit ($1,920) Net 15 on the balance. Devon invoices the $2,880 balance the day final files deliver. On day +3 overdue, Devon resends the Stripe link. Client pays day +6. Devon’s SE-TAX transfer still runs on the deposit and on the final payment. Without the deposit, Devon would have floated three weeks of work.
Checklist
- Write Net days + deposit % into every proposal over your threshold.
- Number invoices; send same day as the milestone.
- Send your W-9 when asked; confirm payment method before kickoff.
- Run the +3 / +10 / +21 ladder without skipping.
- Pause new scope when invoices age past your written limit.
Educational only. Not legal or collections advice. Late-fee rules and contract enforceability vary by state. Scam invoices you receive are a different problem; see the fake-invoice guide linked above.