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I’m going to start this out with the quote that I’ve said many times in the past but still have not set enough.
An invoice is not a contract.
An invoice has an implied meaning of a contract, but the problem with implied meanings is different parties interpret the expectations of an invoice in different ways. I’ve been guilty of confusing the two in the past. There are times in which I worked with a client and because I trusted the client this led me to send an invoice without having a proper agreement in place.
Looking back on my hesitation to provide a client agreement I can honestly say I was simply lazy. Admittedly it does take time and effort to draft up a contract because every project is different. The times in which I showed laziness and did not have a client agreement in place always caused more problems for me because there were so many inaccurate assumptions on both ends.
A proposal and client agreement are created to outline what the payment terms are. An invoice reminds the client to what they’ve already agreed to and inform them on how they can make a payment. With that being said, let’s dive deeper into the differences between an invoice and a contract.
What is a client agreement? (Contract)
Let’s take a step back and talk about what a contract or client agreement is. A client agreement discusses all of the particulars of a project between a creative professional and their client. The agreement covers things such as who owns the work, who is responsible for payment, when payment is due, any liability, the statement of work in many other factors.
I would venture to say that the client agreement details in the outlines the amount that has been agreed-upon whether it was agreed upon in a proposal or agreed-upon verbally whatever the case it needs to be written out in the clan agreement is the place to do that. If payment is due in full in these to be written down in the agreement and the date the amount is due needs to be written down. If the client is on a payment plan in these to be written down and outlined in the agreement. If certain percentages are due at certain milestones, and there’s a fee schedule in these to be written out.
What is an Invoice?
Now let’s talk about an invoice. An invoice is a notification or reminder that a payment is due based upon a previous agreement. An invoice should detail where payment can be submitted as well as provide information on the type of work that you are billing for. The invoice should outline, who is being billed, and what payment methods are acceptable. For a full layout of the essentials of an invoice check out Anatomy of an Invoice.
A mistake I made in the past was to send someone an invoice based on a verbal conversation alone. Doing this left the door open for a world of assumptions on both ends. This often leads to scope creep and an unlimited amount of revisions because items were not discussed agreed-upon in a written format. Be smart, be organized and overall be a professional. Take the extra time to do those things which will protect your time.