I am a student and a part time freelancer. My income is not even considered taxable at this point. Most of the time, I work at crowd sourcing sites like oDesk and some time I work directly for client and payment is made using PayPal. So, Why should I create a invoice at the end of job and not just ask for payment directly? What are its advantages?
It's not about advantages, it is about law and also about your clients.
- In some countries, it is illegal to work without invoicing (France for instance).
- If you work as a contractor for a company, it is likely that the company will need an invoice for its accounting. Otherwise it will not be possible to justify the expense to the tax authority, and then it will be mandatory to pay taxes on the money that is long gone.
An invoice clarifies, in a single document, what's been paid for. And for your future work that doesn't come to you by way of odesk or similar, it states:
- The date of the invoice
- The parties involved
- The payment terms (if you don't know what this means, you'd better ask somebody -- but this is usually agreed upon out before starting work.)
- The date payment is due.
- The invoice number.
When you have to contact a client and ask, 'hey, where's my money,' if the client can find invoice # xyz123 that has all of the above on it, there's really nothing to debate about as to whether you should have a check in your hand or not.
Don't be lazy-minded. This is how it's done if you're going to play with the big boys.
I know from experience that clients like to have official invoices for their own records. That way if they need more design work in the future they can go back through the invoices of designers they have worked with in the past, compare rates, projects, expenses, etc and can make an easier decision than going through countless emails.
The invoices I make are not complex. Just look online for simple forms. They usually include your contact information, the project's name, the agreed payment, hours worked, and sometimes I attach a small screenshot of the finished design.
Hope that helps!