Module 06 of 09
Invoicing & getting paid
Getting paid sounds simple. But most cash flow problems trace back to invoicing habits — sending late, missing required fields, giving too many days to pay, or not following up on overdue balances. This module covers professional invoicing from start to collection.
What every invoice must include
An invoice is a legal request for payment. Missing required fields can delay payment or make it harder to collect if there's a dispute. Here's a complete professional invoice:
The key fields: your business name and contact info, client name and address, invoice number, invoice date, due date and payment terms, itemized description of work, amounts, and accepted payment methods.
In this Module
What goes on an invoice
Payment terms
Invoicing tools
Collecting late payments
Related Modules
Cash flow
Contracts
Pricing
Payment terms — what to use and why
Your payment terms determine how quickly you get paid. The most common options:
Due on receipt — Payment expected immediately upon delivery of the invoice. Common for market vendors, retail, and smaller service jobs. No ambiguity.
Net 14 — Payment due 14 days from invoice date. A reasonable default for service and trades businesses. Short enough to maintain cash flow, long enough to not feel pressuring.
Net 30 — Payment due 30 days from invoice date. Common in B2B and contract work, but creates a 30-day cash gap. Avoid unless the client specifically requires it or the contract demands it.
50% deposit + balance on completion — Deposit protects you against material costs and confirms the job. Balance collects on the day work is finished. Best practice for trades, renovation, and project-based service work.
DEFAULT RECOMMENDATION
Service businesses: Net 14. Trades and project work: 50% deposit + balance on completion. Never default to Net 30 unless required — shorter terms mean faster payment and better cash flow.
Tools for sending and tracking invoices
Wave
Free invoicing, payment tracking, and bookkeeping. Credit card processing available for a fee.
Free · waveapps.com
QuickBooks
Full invoicing, bookkeeping, and payment tracking. Most widely used by accountants.
$35–$75/month
Venmo / PayPal
Simple informal payments. Useful for small jobs. Not ideal for professional invoicing or large amounts.
Free + processing fees
Square Invoices
Send professional invoices, accept cards online. Integrates with Square POS if you use it.
Free + card procesing fee
Jobber
Designed for trades and field service — quotes, scheduling, invoicing, and payment in one tool.
$49–$249/month
FreshBooks
Strong invoicing features for service businesses. Time tracking, retainers, and client portals.
$19–$55/month
Collecting overdue invoices
Late payment is normal, not a crisis — if you follow up promptly. Most late payers aren't refusing to pay; they're disorganized. A systematic follow-up sequence collects most overdue invoices within 60 days:
Day 1 past due: Friendly reminder email. "Just checking — invoice #1042 for $394 was due June 30. Happy to help if you have any questions." No accusation. Most people pay within a day or two of a reminder.
Day 7–10 past due: Follow-up email plus a phone call. More direct: "I haven't heard back about invoice #1042 — want to make sure this didn't get lost. Can we get this resolved this week?" Offer to take a card over the phone.
Day 21–30 past due: Formal written notice. State the outstanding amount, the original due date, and a specific new deadline. Reference any late fee clause in your agreement or invoice terms.
Day 45–60 past due: Final demand letter before action. Consider small claims court (typically handles claims up to $10,000–$25,000 depending on state) or a collections service. For trades, a mechanic's lien may be available — see the Legal section for details.
DON’T WAIT TO FOLLOW UP
Invoices that aren't followed up on within 30 days of the due date collect at significantly lower rates. The longer you wait, the harder collection becomes. Set a calendar reminder for Day 1 past due and follow up automatically.