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Limited Company Invoices
As a contractor you will normally need to submit sales Invoices to a Client or Agent for work completed. It is your responsibility as the Director of your own contractor limited company to ensure that Invoices are correct and are submitted on time.What are Limited Company Sales Invoices?
A Limited Company Sales Invoice details the cost of services delivered by your Limited Company. As a freelance contractor you will normally be paid for work undertaken on an hourly or daily basis. The final invoice should include details of the total hours worked, the hourly or daily rate and the final chargeable sum. If you run a computer consultancy registered for Valued Added Tax you will be required to charge VAT on the Invoice at a rate of 17.5%.Preparing an Invoice
A Contractor Limited Company Sales Invoice should include the following Information:- Name of the Company
- Full Registered Address
- Incorporation Number
- VAT Registration Number (If registered for Value Added Tax)
- Telephone Number
- Invoice Date
- Invoice Number
- Period in which Hours/Days worked
- Total Hours or Days Worked
- Hourly or Daily Rate
- Sub Total
- VAT charged on the Invoice
- Final Total Including VAT
- Payment Terms
- Bank Account Details
You should print all invoices onto limited company letterhead paper where possible to help demonstrate that you are running a consultancy.
When should I submit an Invoice?
The frequency with which you submit Invoices depends upon the terms of the contract. Some clients and agents require weekly Invoices, some require monthly invoices. Check the Invoicing schedule and payments terms with the client or agent before beginning the contract.Quite often, if you work via an Agency, special payment terms may be agreed for the first month or two of the contract. For example if in need of money you may be able to arrange weekly or fortnightly payment terms for the first month of the contract and then switch to monthly. Most Agencies are flexible in this respect. If you work directly for a client this may not be possible and you may (depending upon the terms of the contract) have to wait 1-2 months for payment.
How should I submit an invoice?
You will normally submit invoices to clients or agents by email, fax or post.The majority of clients and agents now accept emailed or faxed copies of invoices without the need for hard copies to be sent. However, some still require hard copies to be received before payments can be made. If you deal with a client or agent that works in this way ensure that you contact them to check that the Invoice has arrived, you should not rely on the postal service.
If you send an Invoice by email or fax make sure that you store a copy of the sent item or print out a fax delivery sheet to confirm delivery. It may also be a good idea to call the client or agent to confirm delivery when issuing a first invoice of a new assignment.
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