[{"data":1,"prerenderedAt":1257},["ShallowReactive",2],{"page-\u002Fwhat-to-do-when-a-client-wont-pay":3,"related-\u002Fwhat-to-do-when-a-client-wont-pay":312},{"id":4,"title":5,"author":6,"body":7,"category":298,"date":299,"dek":300,"description":301,"extension":302,"featured":303,"meta":304,"navigation":305,"path":306,"readingTime":307,"seo":308,"sitemap":309,"stem":310,"__hash__":311},"content\u002Fwhat-to-do-when-a-client-wont-pay.md","What to Do When a Client Won't Pay (Step-by-Step)","Daniel Reed",{"type":8,"value":9,"toc":280},"minimark",[10,14,17,22,25,28,31,35,38,105,114,118,121,129,133,136,139,142,145,149,152,160,167,173,177,180,203,206,210,213,244,247,251,256,259,263,266,270,273,277],[11,12,13],"p",{},"What do you actually do when an invoice goes past due and the client stops responding?",[11,15,16],{},"The answer is almost never what the frustration in the moment suggests. A methodical, calm escalation — starting with the most charitable explanation and only turning up the heat when necessary — gets you paid faster and keeps more client relationships intact than an angry email ever does.",[18,19,21],"h2",{"id":20},"start-by-ruling-out-the-boring-explanations","Start by Ruling Out the Boring Explanations",[11,23,24],{},"An overdue invoice feels personal. Most of the time it isn't. Before you draft anything strongly worded, work through the mundane reasons first, because they're usually the real ones.",[11,26,27],{},"The invoice went to a spam folder. It landed with the wrong person and never reached accounts payable. It's missing a purchase order number, so the client's system rejected it silently. The approver is on holiday. The payment run happens on the 25th and your invoice arrived on the 26th. None of these are malice — they are admin friction, and a single polite message usually clears them.",[11,29,30],{},"Your first move is a nudge that assumes good faith and makes it trivially easy to pay: restate the invoice number, the amount, the due date, and attach the PDF again.",[18,32,34],{"id":33},"the-escalation-ladder","The Escalation Ladder",[11,36,37],{},"Chasing payment works best as a series of calm, predictable steps that get firmer over time. Climb one rung at a time and keep a written record of every one. The record does two things: it nudges the client (people pay faster when they can see a paper trail forming) and it's the evidence you'll need if this ever reaches mediation or court.",[39,40,41,57],"table",{},[42,43,44],"thead",{},[45,46,47,51,54],"tr",{},[48,49,50],"th",{},"Rung",[48,52,53],{},"Timing",[48,55,56],{},"Tone",[58,59,60,72,83,94],"tbody",{},[45,61,62,66,69],{},[63,64,65],"td",{},"1 — Friendly nudge",[63,67,68],{},"A day or two after the due date",[63,70,71],{},"Assume it slipped through the cracks",[45,73,74,77,80],{},[63,75,76],{},"2 — Firm reminder",[63,78,79],{},"~7 days overdue",[63,81,82],{},"State the new deadline; note that interest may apply",[45,84,85,88,91],{},[63,86,87],{},"3 — Final notice \u002F demand",[63,89,90],{},"~14–30 days overdue",[63,92,93],{},"Formal letter before action with a hard deadline",[45,95,96,99,102],{},[63,97,98],{},"4 — Outside help",[63,100,101],{},"After demand deadline passes",[63,103,104],{},"Mediation, debt recovery, or small claims",[11,106,107,108,113],{},"For the exact wording at each stage, we have a full set of ",[109,110,112],"a",{"href":111},"\u002Fpayment-reminder-email-templates","payment reminder email templates"," you can copy and adapt.",[18,115,117],{"id":116},"pick-up-the-phone","Pick Up the Phone",[11,119,120],{},"Somewhere between the firm reminder and the formal demand, call them. Email is easy to ignore; a polite, direct conversation is much harder to brush off, and it often surfaces the real blocker — \"we never got the PO\", \"our terms are actually 45 days\", \"cash is tight, can we split it\".",[11,122,123,124,128],{},"Keep the call friendly and solution-focused. Confirm the amount, ask if there's any issue with the work or the invoice, and agree a concrete payment date. Then follow up in writing the same day: \"Thanks for the call, confirming you'll pay £X by ",[125,126,127],"span",{},"date",".\" Now the verbal promise is documented.",[18,130,132],{"id":131},"the-formal-demand","The Formal Demand",[11,134,135],{},"If polite chasing fails, escalate to a formal written demand. In the UK this is often called a \"letter before action\" or \"letter before claim\" — it signals that court is the next step if payment doesn't arrive. It should be unemotional and specific.",[11,137,138],{},"A demand letter should state: the invoice number(s) and amount, the original due date, a short history of the reminders you sent, the total now due including any interest, a firm final deadline (commonly 7–14 days), and a clear statement of what happens next if they miss it.",[11,140,141],{},"Keep it factual. No insults, no capital letters, no threats you won't carry out. A calm letter that lists dates and amounts reads as someone who is organised and will follow through, which is exactly the impression that gets you paid.",[11,143,144],{},"Send it by a method you can prove — email plus, for larger sums, recorded post. Rules and terminology differ by country, so if real money is at stake, it's worth a quick check with a solicitor or your local small-business advice service before you send a formal demand.",[18,146,148],{"id":147},"interest-and-late-fees","Interest and Late Fees",[11,150,151],{},"Often you can charge interest on overdue B2B invoices, but the rules depend on where you are and what your contract says.",[11,153,154,155,159],{},"In the UK, the Late Payment of Commercial Debts (Interest) Act 1998 gives businesses a statutory right to charge interest on overdue commercial invoices (commonly cited as 8% plus the Bank of England base rate) plus a fixed sum in compensation that rises with the size of the debt, even if your contract is silent on the matter. Our ",[109,156,158],{"href":157},"\u002Fhow-to-charge-late-fees-on-overdue-invoices","late payment interest calculator"," can estimate what an overdue invoice has run up. The exact rates and fixed sums change over time and the rules have conditions, so confirm the current figures on GOV.UK before you apply them.",[11,161,162,163,166],{},"In the US, Australia, Canada and elsewhere, late fees are generally governed by your contract and by local rules that may cap the interest rate. The practical lesson is the same everywhere: put a late-payment clause in your terms and on your invoice from day one, so the right to charge isn't a surprise. Our guide on ",[109,164,165],{"href":157},"charging late fees on overdue invoices"," walks through the wording.",[168,169,170],"blockquote",{},[11,171,172],{},"This isn't legal advice. Interest rules, caps and the right to claim differ by country and can change. Check your local regulator or a solicitor before relying on a specific figure.",[18,174,176],{"id":175},"when-chasing-isnt-enough","When Chasing Isn't Enough",[11,178,179],{},"If the demand deadline passes without payment, you have a few routes, roughly in order of cost and aggression:",[181,182,183,191,197],"ul",{},[184,185,186,190],"li",{},[187,188,189],"strong",{},"Mediation"," — a neutral third party helps you reach a settlement. Cheaper, faster and less relationship-destroying than court. Many small claims processes encourage or require it first.",[184,192,193,196],{},[187,194,195],{},"Debt recovery agency"," — they chase on your behalf for a fee or a cut of what they collect. Useful when you don't have the time or stomach for it, less so for small sums.",[184,198,199,202],{},[187,200,201],{},"Small claims court"," — for modest amounts this is designed to be used without a lawyer. England and Wales handle most claims up to £10,000 on the small claims track via Money Claim Online; US small claims limits vary by state; other countries have their own equivalents and thresholds.",[11,204,205],{},"Weigh the sum against the effort. For a £200 invoice, a formal claim may cost more in time and fees than it returns, and \"write it off and never work with them again\" is a legitimate business decision. For £5,000, it's usually worth pursuing.",[18,207,209],{"id":208},"preventing-the-next-one","Preventing the Next One",[11,211,212],{},"Most non-payment is preventable at the quoting stage, not the chasing stage. A few habits dramatically cut your odds of being stiffed:",[181,214,215,226,232,238],{},[184,216,217,220,221,225],{},[187,218,219],{},"Take a deposit"," on larger jobs so you're never fully exposed — see ",[109,222,224],{"href":223},"\u002Fhow-to-ask-for-a-deposit-upfront-invoices","how to ask for a deposit",".",[184,227,228,231],{},[187,229,230],{},"Agree terms in writing"," before you start, including payment days and a late-fee clause.",[184,233,234,237],{},[187,235,236],{},"Invoice promptly and correctly"," — the right details, a PO number if they use them, a clear due date, and a clickable payment link.",[184,239,240,243],{},[187,241,242],{},"Stage the work"," for big projects: milestone invoices mean an early non-payer can be stopped before you've delivered everything.",[11,245,246],{},"A clean, complete invoice with a clear due date is your first line of defence. Build one in seconds with our free invoice generator, or start from a freelance invoice template.",[18,248,250],{"id":249},"frequently-asked-questions","Frequently Asked Questions",[252,253,255],"h3",{"id":254},"how-long-should-i-wait-before-chasing-an-unpaid-invoice","How long should I wait before chasing an unpaid invoice?",[11,257,258],{},"Send a friendly reminder a day or two after the due date passes. There's no benefit to waiting weeks — early, polite contact gets you paid faster and keeps the tone light.",[252,260,262],{"id":261},"can-i-charge-interest-on-a-late-invoice","Can I charge interest on a late invoice?",[11,264,265],{},"Often yes, particularly for business-to-business invoices, but it depends on your country and contract. UK businesses have a statutory right to claim interest and compensation on overdue commercial debts; elsewhere it's usually governed by your terms. Check the current rules for your jurisdiction before applying a figure.",[252,267,269],{"id":268},"what-is-a-letter-before-action","What is a letter before action?",[11,271,272],{},"A formal written demand, common in the UK, that warns the debtor you intend to take court action if they don't pay by a stated deadline. It sets out the amount, the history, and the consequences in plain, factual terms.",[252,274,276],{"id":275},"is-it-worth-taking-a-client-to-small-claims-court","Is it worth taking a client to small claims court?",[11,278,279],{},"Weigh the debt against the time, fees, and stress. For larger sums, small claims is designed to be usable without a lawyer and is often worthwhile. For very small amounts, writing it off and declining future work can be the better commercial call.",{"title":281,"searchDepth":282,"depth":282,"links":283},"",3,[284,286,287,288,289,290,291,292],{"id":20,"depth":285,"text":21},2,{"id":33,"depth":285,"text":34},{"id":116,"depth":285,"text":117},{"id":131,"depth":285,"text":132},{"id":147,"depth":285,"text":148},{"id":175,"depth":285,"text":176},{"id":208,"depth":285,"text":209},{"id":249,"depth":285,"text":250,"children":293},[294,295,296,297],{"id":254,"depth":282,"text":255},{"id":261,"depth":282,"text":262},{"id":268,"depth":282,"text":269},{"id":275,"depth":282,"text":276},"Getting Paid","2026-06-10",null,"A calm, escalating plan for an unpaid invoice: reminders, a formal demand, statutory late-payment interest, mediation, and small claims — without torching the relationship.","md",false,{},true,"\u002Fwhat-to-do-when-a-client-wont-pay","12 min read",{"title":5,"description":301},{"loc":306},"what-to-do-when-a-client-wont-pay","EXI_UwxptnXjNsm6FEDOpez0kfU4Mp5Lvy_8xKjEkpA",[313,744],{"id":314,"title":315,"author":6,"body":316,"category":734,"date":735,"dek":300,"description":736,"extension":302,"featured":303,"meta":737,"navigation":305,"path":738,"readingTime":739,"seo":740,"sitemap":741,"stem":742,"__hash__":743},"content\u002Fhow-to-bill-clients-for-expenses.md","How to Bill Clients for Expenses: Reimbursable Expenses on Invoices",{"type":8,"value":317,"toc":721},[318,322,325,333,336,340,343,354,357,377,380,384,387,393,399,406,409,413,416,421,552,558,561,569,573,583,587,602,612,625,629,637,641,654,665,669,676,679,683,718],[18,319,321],{"id":320},"what-counts-as-a-reimbursable-expense-and-what-doesnt","What counts as a reimbursable expense (and what doesn't)",[11,323,324],{},"A reimbursable expense is a cost you incur on a project that the client has agreed to pay back. You front the money, then recharge it. Classic examples: a train fare to a client site, a stock photo licence bought for their brochure, a domain and hosting plan set up in their name, or a specialist subcontractor you hired to finish part of the job.",[11,326,327,328,332],{},"What is ",[329,330,331],"em",{},"not"," reimbursable is your ordinary cost of being in business. Your laptop, your accounting software subscription, your home office internet, your professional insurance — those are overhead. You recover them through your rate, not by itemising them on a client invoice. The line matters because clients push back hard when they see costs they consider \"your problem\" appearing on a bill.",[11,334,335],{},"The cleanest test: would this cost exist if the project didn't? A flight booked specifically for one client's workshop fails the \"would exist anyway\" test, so it's reimbursable. Your Adobe subscription would exist regardless, so it's overhead.",[18,337,339],{"id":338},"agree-the-rules-before-you-spend-a-penny","Agree the rules before you spend a penny",[11,341,342],{},"Most expense disputes are really scope disputes that surfaced late. Kill them in the contract or proposal. A short clause is enough:",[168,344,345],{},[11,346,347],{},[329,348,349,350,353],{},"Expenses: The Client will reimburse pre-approved out-of-pocket costs incurred on this project, including travel, accommodation, third-party software licences, and subcontractor fees. Costs above $150 per item require written approval in advance. Expenses are billed at cost and supported by receipts. Mileage is charged at ",[125,351,352],{},"rate"," per mile.",[11,355,356],{},"Three things that clause does for you:",[181,358,359,365,371],{},[184,360,361,364],{},[187,362,363],{},"Sets an approval threshold."," Anything above the limit needs a yes in writing. Below it, you're covered to just spend and recharge.",[184,366,367,370],{},[187,368,369],{},"States the markup policy up front"," (here, \"at cost\" — no markup). Decide this deliberately; more on markup below.",[184,372,373,376],{},[187,374,375],{},"Requires receipts",", which signals you'll keep clean records and pre-empts the \"can you prove that?\" conversation.",[11,378,379],{},"Get the client to confirm expensive items by email before you commit. A one-line \"Booking the Tuesday flight at £142, confirming that's approved\" costs you nothing and turns a possible fight into a paper trail.",[18,381,383],{"id":382},"to-mark-up-or-not-to-mark-up","To mark up or not to mark up",[11,385,386],{},"There are two honest positions, and clients treat them very differently.",[11,388,389,392],{},[187,390,391],{},"Billing at cost (pass-through)."," You recharge exactly what you paid. A £142 flight becomes a £142 line. This is the norm for genuine third-party disbursements and it builds trust because there's nothing to argue about. The downside: you carry the cash-flow burden and admin for free.",[11,394,395,398],{},[187,396,397],{},"Adding a handling markup."," Some agencies add 10–20% to expenses to cover the time spent booking, coordinating, and financing the cost. This is legitimate as long as it's disclosed. What damages relationships is a hidden markup a client discovers by seeing the original receipt. If you mark up, either state the percentage in your contract or fold the handling into a separate \"coordination fee\" line rather than inflating the receipt total.",[11,400,401,402,405],{},"A middle path many freelancers use: pass genuine disbursements through at cost, but bill your own ",[329,403,404],{},"time"," spent managing a subcontractor or sourcing materials as normal billable hours. That keeps the expense honest and still pays you for the work.",[11,407,408],{},"For mileage, use your tax authority's standard rate as a defensible number rather than guessing. In the US the IRS sets an annual business mileage rate; the UK uses HMRC approved mileage allowance payments (commonly quoted as 45p per mile for the first 10,000 miles); Canada and Australia publish their own per-kilometre figures. These change, so check the current rate for your country each tax year.",[18,410,412],{"id":411},"how-to-list-expenses-on-the-invoice","How to list expenses on the invoice",[11,414,415],{},"Keep expenses visually distinct from your fees. Clients scan invoices, and burying a £600 subcontractor cost inside your service total invites suspicion. Two structures work well.",[11,417,418],{},[187,419,420],{},"Option A — a dedicated expenses block:",[39,422,423,439],{},[42,424,425],{},[45,426,427,430,433,436],{},[48,428,429],{},"Description",[48,431,432],{},"Qty",[48,434,435],{},"Rate",[48,437,438],{},"Amount",[58,440,441,455,468,481,493,505,520,536],{},[45,442,443,446,449,452],{},[63,444,445],{},"Web design services (June)",[63,447,448],{},"22 hrs",[63,450,451],{},"$85",[63,453,454],{},"$1,870.00",[45,456,457,462,464,466],{},[63,458,459],{},[187,460,461],{},"Reimbursable expenses",[63,463],{},[63,465],{},[63,467],{},[45,469,470,473,476,479],{},[63,471,472],{},"Stock photography licence (invoice #A-2231)",[63,474,475],{},"1",[63,477,478],{},"$79.00",[63,480,478],{},[45,482,483,486,488,491],{},[63,484,485],{},"Return train fare, London↔Bristol (12 Jun)",[63,487,475],{},[63,489,490],{},"$64.00",[63,492,490],{},[45,494,495,498,500,503],{},[63,496,497],{},"Subcontractor: copywriting (J. Okafor)",[63,499,475],{},[63,501,502],{},"$450.00",[63,504,502],{},[45,506,507,512,514,516],{},[63,508,509],{},[187,510,511],{},"Subtotal — services",[63,513],{},[63,515],{},[63,517,518],{},[187,519,454],{},[45,521,522,527,529,531],{},[63,523,524],{},[187,525,526],{},"Subtotal — expenses",[63,528],{},[63,530],{},[63,532,533],{},[187,534,535],{},"$593.00",[45,537,538,543,545,547],{},[63,539,540],{},[187,541,542],{},"Total",[63,544],{},[63,546],{},[63,548,549],{},[187,550,551],{},"$2,463.00",[11,553,554,557],{},[187,555,556],{},"Option B — a separate expenses invoice"," entirely, cross-referenced to the project. Useful when expenses are large or arrive on a different timeline than your fees, and when a client's accounts team codes reimbursements to a different budget.",[11,559,560],{},"Either way, name the specific supplier, date, and purpose on each line. \"Travel — $64\" is weak. \"Return train fare, London↔Bristol, 12 Jun client workshop — $64\" gets approved without a follow-up email. Attach the underlying receipts as a PDF; don't wait to be asked.",[11,562,563,564,568],{},"If you're building invoices by hand, the layout principles in ",[109,565,567],{"href":566},"\u002Fhow-to-make-an-invoice-in-excel-word-google-docs","how to make an invoice in Excel, Word or Google Docs"," apply here too — a clean expenses subtotal is just another block.",[18,570,572],{"id":571},"the-vat-and-sales-tax-part-people-get-wrong","The VAT and sales-tax part people get wrong",[11,574,575,576,579,580,225],{},"This is where recharging expenses gets genuinely technical, and the rules differ by tax and by country. Two concepts get confused constantly: ",[187,577,578],{},"recharges"," and ",[187,581,582],{},"disbursements",[252,584,586],{"id":585},"recharges-vs-disbursements-vat-registered-businesses","Recharges vs disbursements (VAT-registered businesses)",[11,588,589,590,593,594,597,598,601],{},"A ",[187,591,592],{},"recharge"," is a cost you incurred ",[329,595,596],{},"for your own business"," in order to deliver the service, which you then pass on. Your train fare to a client meeting is your cost — you bought the ticket, you travelled. When you recharge it, it becomes part of the consideration for your service, so in the UK and similar VAT systems you generally add VAT to it at your service rate, ",[329,599,600],{},"even if the original ticket was zero-rated or VAT-exempt",". That surprises people: a zero-rated train fare recharged to a client typically gets 20% VAT added because it's now part of your taxable supply.",[11,603,589,604,607,608,611],{},[187,605,606],{},"disbursement"," is a cost you paid ",[329,609,610],{},"as the client's agent"," — the goods or services were supplied to the client, not to you, and you merely handled the payment. A statutory fee (say, a companies-registry filing fee paid on the client's behalf) can qualify. Disbursements are passed on at exact cost with no VAT added by you, but they must meet strict conditions: the client received the supply, you were acting as their agent, and you show the cost separately. Getting this wrong means under- or over-charging VAT.",[11,613,614,615,619,620,624],{},"Practical takeaway for UK and EU-style VAT: most of what freelancers call \"expenses\" are actually recharges, not disbursements, so you add VAT. Read ",[109,616,618],{"href":617},"\u002Fuk-vat-invoices-explained","UK VAT invoices explained"," and, if you're near the threshold, ",[109,621,623],{"href":622},"\u002Fdo-i-need-to-register-for-vat","do I need to register for VAT",". Rules vary — confirm your specific situation with HMRC or an accountant.",[252,626,628],{"id":627},"us-sales-tax","US sales tax",[11,630,631,632,636],{},"Whether a reimbursed expense is taxable depends on the state and on whether the underlying item was taxable and how it's characterised. Reimbursed costs that are part of a bundled taxable service can be taxable; a separately stated pass-through of a non-taxable item may not be. There's no single national rule. The overview in ",[109,633,635],{"href":634},"\u002Fus-sales-tax-on-invoices","US sales tax on invoices"," is a starting point, but check your state.",[252,638,640],{"id":639},"canada-and-australia","Canada and Australia",[11,642,643,644,648,649,653],{},"For GST\u002FHST in Canada, recharged expenses generally follow the tax treatment of your overall supply; see ",[109,645,647],{"href":646},"\u002Fcanada-gst-hst-invoice-requirements","Canada GST\u002FHST invoice requirements",". In Australia, GST on reimbursements versus true disbursements follows a similar agent-vs-principal logic to the UK; a valid ",[109,650,652],{"href":651},"\u002Fwhat-is-a-tax-invoice-australia","tax invoice"," still needs the right GST breakdown.",[11,655,656,657,660,661,664],{},"One more trap: ",[187,658,659],{},"don't double-count VAT\u002FGST you've already reclaimed."," If you're VAT-registered and reclaimed the input tax on that £79 stock photo, you recharge the £79 net (pre-VAT) figure and add your own VAT on top. Recharging the VAT-inclusive amount ",[329,662,663],{},"and"," adding VAT again overcharges the client.",[18,666,668],{"id":667},"keep-the-receipts-and-keep-them-findable","Keep the receipts, and keep them findable",[11,670,671,672,225],{},"Every recharged cost needs a supporting document you can produce on demand: the supplier invoice, the ticket, the mileage log. Tax authorities can ask you to justify both the expense you claimed and the amount you recharged. Retention periods vary (commonly several years), so store them with the project. The practical mechanics are covered in ",[109,673,675],{"href":674},"\u002Fhow-long-to-keep-invoices-and-receipts","how long to keep invoices and receipts",[11,677,678],{},"A simple system: create a folder per project, drop every receipt in as you incur it, and log the date, supplier, amount, and whether tax was charged in a spreadsheet. When invoice day arrives the expenses block writes itself.",[18,680,682],{"id":681},"handling-the-awkward-cases","Handling the awkward cases",[181,684,685,691,701,712],{},[184,686,687,690],{},[187,688,689],{},"The client rejects an expense after the fact."," If it was under your approval threshold and inside the contract's categories, point to the clause. If it was over the threshold and you didn't get sign-off, you may have to eat it — which is exactly why the threshold exists.",[184,692,693,696,697,700],{},[187,694,695],{},"A subcontractor you're recharging."," You're the principal: you hired them, you pay them, you recharge the client. Their invoice is addressed to ",[329,698,699],{},"you",", and you issue your own invoice to the client. Don't just forward the sub's invoice.",[184,702,703,706,707,711],{},[187,704,705],{},"Foreign-currency expenses on an overseas project."," Convert at the rate on the date you paid, note the rate, and be consistent. ",[109,708,710],{"href":709},"\u002Fhow-to-invoice-international-clients","Invoicing international clients"," covers the currency and payment side.",[184,713,714,717],{},[187,715,716],{},"Expenses that arrive after final payment."," Bill them promptly on a short-dated invoice rather than sitting on them. A late \"oh, and there's also £200 of expenses\" three months on reads as disorganised and gets queried.",[11,719,720],{},"Recharging expenses well is mostly about being boringly transparent: agree the rules in writing, spend inside the agreed limits, itemise clearly, attach the receipts, and apply the right tax treatment for your jurisdiction. Do that and expenses stop being a source of friction and become just another clean line on the invoice.",{"title":281,"searchDepth":282,"depth":282,"links":722},[723,724,725,726,727,732,733],{"id":320,"depth":285,"text":321},{"id":338,"depth":285,"text":339},{"id":382,"depth":285,"text":383},{"id":411,"depth":285,"text":412},{"id":571,"depth":285,"text":572,"children":728},[729,730,731],{"id":585,"depth":282,"text":586},{"id":627,"depth":282,"text":628},{"id":639,"depth":282,"text":640},{"id":667,"depth":285,"text":668},{"id":681,"depth":285,"text":682},"Invoicing Basics","2026-07-29","How to recharge travel, materials, software and subcontractor costs to clients, whether to add markup, and how VAT and sales-tax rules apply.",{},"\u002Fhow-to-bill-clients-for-expenses","8 min read",{"title":315,"description":736},{"loc":738},"how-to-bill-clients-for-expenses","RpKUmFUK7kvh-_hOs2fJkgj3NKtNotmV5Fped0xpX-s",{"id":745,"title":746,"author":6,"body":747,"category":734,"date":1249,"dek":300,"description":1250,"extension":302,"featured":303,"meta":1251,"navigation":305,"path":1252,"readingTime":739,"seo":1253,"sitemap":1254,"stem":1255,"__hash__":1256},"content\u002Fwhat-is-progress-billing.md","What Is Progress Billing? How to Invoice a Project in Stages",{"type":8,"value":748,"toc":1239},[749,753,756,759,771,775,778,799,806,812,818,821,825,828,831,969,980,984,987,1004,1007,1010,1069,1072,1080,1084,1087,1093,1108,1114,1119,1122,1128,1134,1138,1141,1146,1154,1159,1179,1182,1186,1189,1226,1230,1233,1236],[18,750,752],{"id":751},"getting-paid-before-the-project-ends","Getting paid before the project ends",[11,754,755],{},"A web build quoted at $18,000 takes four months. If you invoice once at the end, you're effectively lending the client the cost of a third of a year's work, absorbing every scope change and stall, and betting your cash flow on a single payment that may arrive 30 days after the final sign-off. That's month five before a dollar lands.",[11,757,758],{},"Progress billing fixes this. Instead of one invoice, you break the project into stages and bill for each as you complete it. The client pays as value is delivered; you fund the work as you go. It's the standard model in construction, engineering, and large creative or software projects, and it scales down neatly to a solo freelancer running a $6,000 branding job.",[11,760,761,762,765,766,770],{},"This is different from a one-off ",[109,763,764],{"href":223},"deposit invoice"," or a fixed monthly ",[109,767,769],{"href":768},"\u002Frecurring-and-retainer-invoices","retainer",". A deposit is a single upfront payment. A retainer bills a recurring fee regardless of specific deliverables. Progress billing charges incrementally against measurable chunks of one large project as they're finished.",[18,772,774],{"id":773},"how-progress-billing-actually-works","How progress billing actually works",[11,776,777],{},"Every progress-billed project rests on three decisions you make before you start:",[779,780,781,787,793],"ol",{},[184,782,783,786],{},[187,784,785],{},"The total contract value."," The agreed price for the whole job (or a clear rate structure if it's time-and-materials).",[184,788,789,792],{},[187,790,791],{},"The billing triggers."," What event releases each invoice, a calendar date, a completed milestone, or a percentage of work done.",[184,794,795,798],{},[187,796,797],{},"The schedule of values."," A line-by-line breakdown showing how the total is split across stages.",[11,800,801,802,805],{},"Two broad methods exist for deciding ",[329,803,804],{},"when"," to bill:",[11,807,808,811],{},[187,809,810],{},"Milestone billing."," You invoice when a defined deliverable is complete: \"homepage design approved,\" \"database migration signed off.\" Best when the work has clear, discrete stages. Clients like it because they're paying for something they can see.",[11,813,814,817],{},[187,815,816],{},"Percentage-of-completion billing."," You invoice based on how much of the total work is finished, often assessed monthly. A builder might bill for 40% of a job at the end of month two. This suits long, continuous work where deliverables blur together. It requires an honest, defensible way to estimate \"percent complete,\" which is where disputes usually start.",[11,819,820],{},"Most small-business projects use milestones. They're concrete and hard to argue with.",[18,822,824],{"id":823},"building-a-schedule-of-values","Building a schedule of values",[11,826,827],{},"The schedule of values is the backbone. It's a table, agreed in the contract, that both parties reference for the life of the project. Keep the number of stages sensible: too few and you're back to lump-sum risk, too many and you drown in admin.",[11,829,830],{},"Here's a schedule for that $18,000 website, split into five stages plus a deposit:",[39,832,833,850],{},[42,834,835],{},[45,836,837,840,842,845,847],{},[48,838,839],{},"Stage",[48,841,429],{},[48,843,844],{},"% of total",[48,846,438],{},[48,848,849],{},"Trigger",[58,851,852,869,885,900,917,932,949],{},[45,853,854,857,860,863,866],{},[63,855,856],{},"0",[63,858,859],{},"Mobilisation deposit",[63,861,862],{},"20%",[63,864,865],{},"$3,600",[63,867,868],{},"On contract signing",[45,870,871,873,876,879,882],{},[63,872,475],{},[63,874,875],{},"Discovery & sitemap approved",[63,877,878],{},"15%",[63,880,881],{},"$2,700",[63,883,884],{},"Client sign-off on IA",[45,886,887,890,893,895,897],{},[63,888,889],{},"2",[63,891,892],{},"Design mockups approved",[63,894,862],{},[63,896,865],{},[63,898,899],{},"Client sign-off on designs",[45,901,902,905,908,911,914],{},[63,903,904],{},"3",[63,906,907],{},"Development complete (staging)",[63,909,910],{},"25%",[63,912,913],{},"$4,500",[63,915,916],{},"Site live on staging server",[45,918,919,922,925,927,929],{},[63,920,921],{},"4",[63,923,924],{},"Testing, revisions, launch",[63,926,878],{},[63,928,881],{},[63,930,931],{},"Site live on production",[45,933,934,937,940,943,946],{},[63,935,936],{},"5",[63,938,939],{},"Retention release",[63,941,942],{},"5%",[63,944,945],{},"$900",[63,947,948],{},"30 days after launch, no defects",[45,950,951,953,957,962,967],{},[63,952],{},[63,954,955],{},[187,956,542],{},[63,958,959],{},[187,960,961],{},"100%",[63,963,964],{},[187,965,966],{},"$18,000",[63,968],{},[11,970,971,972,975,976,979],{},"Notice stage 5. That's ",[187,973,974],{},"retainage"," (also called retention), a slice of the total held back until after final delivery to guarantee you fix defects. It's ingrained in construction, where 5–10% is typical, and it's increasingly reasonable for larger creative and software work. As the contractor being billed ",[329,977,978],{},"against",", you want retainage low and released quickly; as the party doing the work, you accept it because it reassures a nervous client. State the release condition precisely: \"5% retained, payable 30 days after production launch provided no critical defects remain open.\"",[18,981,983],{"id":982},"what-goes-on-each-progress-invoice","What goes on each progress invoice",[11,985,986],{},"A progress invoice looks like a normal invoice with a few extra fields that show where this payment sits in the bigger picture. Every one should show:",[181,988,989,992,995,998,1001],{},[184,990,991],{},"The overall contract value",[184,993,994],{},"This stage's amount (the \"current claim\")",[184,996,997],{},"Total billed to date, including this invoice",[184,999,1000],{},"Total remaining after this invoice",[184,1002,1003],{},"Any retainage held",[11,1005,1006],{},"That running tally prevents the most common progress-billing argument: the client losing track of what they've already paid.",[11,1008,1009],{},"Here's how a stage 2 invoice might read:",[168,1011,1012,1018,1059,1066],{},[11,1013,1014,1017],{},[187,1015,1016],{},"Invoice #2026-034","\nProject: Website redesign — Contract value $18,000",[39,1019,1020,1029],{},[42,1021,1022],{},[45,1023,1024,1027],{},[48,1025,1026],{},"Line item",[48,1028,438],{},[58,1030,1031,1039,1047],{},[45,1032,1033,1036],{},[63,1034,1035],{},"Stage 2: Design mockups approved (20% of contract)",[63,1037,1038],{},"$3,600.00",[45,1040,1041,1044],{},[63,1042,1043],{},"Less retainage (5% of this claim)",[63,1045,1046],{},"–$180.00",[45,1048,1049,1054],{},[63,1050,1051],{},[187,1052,1053],{},"Amount due this invoice",[63,1055,1056],{},[187,1057,1058],{},"$3,420.00",[11,1060,1061,1062,1065],{},"Contract value: $18,000.00\nPreviously billed (stages 0–1): $6,300.00\nThis claim: $3,600.00\n",[187,1063,1064],{},"Billed to date: $9,900.00 (55%)","\nRetainage held to date: $495.00\nRemaining to bill: $8,100.00",[11,1067,1068],{},"Payment terms: Net 14. Work on stage 3 begins on receipt.",[11,1070,1071],{},"Whether you deduct retainage from each claim or hold it all in a final stage is a style choice; both are fine as long as the contract and the invoice math agree. Deducting a little from each claim (as above) is cleaner because the client always sees the running retention figure.",[11,1073,1074,1075,1079],{},"Number your invoices in a consistent sequence so the project's billing history is auditable. If you juggle several clients, see ",[109,1076,1078],{"href":1077},"\u002Finvoice-numbering-best-practices","invoice numbering best practices"," for a scheme that won't collapse under multiple projects.",[18,1081,1083],{"id":1082},"contract-wording-that-protects-you","Contract wording that protects you",[11,1085,1086],{},"Progress billing lives or dies by what's written before work starts. The schedule of values belongs in the signed contract or statement of work, not buried in an email. Include clauses covering:",[11,1088,1089,1092],{},[187,1090,1091],{},"The trigger definition."," Vague triggers cause disputes. \"Design phase complete\" invites argument; \"Client provides written approval of homepage and two interior page mockups via email or project tool\" does not.",[11,1094,1095,1098,1099,1103,1104,1107],{},[187,1096,1097],{},"Payment terms per stage."," Short terms suit staged work. Net 7 to Net 14 is common; some freelancers use ",[109,1100,1102],{"href":1101},"\u002Fdue-on-receipt-payment-terms","due on receipt"," for deposits and early stages. Whatever you pick, spell out your ",[109,1105,1106],{"href":157},"late fee"," policy too.",[11,1109,1110,1113],{},[187,1111,1112],{},"A stop-work clause."," The single most valuable line in a progress-billing contract:",[168,1115,1116],{},[11,1117,1118],{},"\"Work on the subsequent stage will not commence until payment for the preceding stage has been received in full. Timelines extend automatically by any period of delayed payment.\"",[11,1120,1121],{},"This turns your invoice into a gate. No payment, no progress. It's the natural leverage staged billing gives you, and it beats chasing an $18,000 balance at the end.",[11,1123,1124,1127],{},[187,1125,1126],{},"Scope-change handling."," When the client adds work mid-project, don't quietly absorb it into an existing stage. Issue a change order that adjusts the contract value and, if needed, adds a stage. Revised schedule of values, signed, then carry on.",[11,1129,1130,1133],{},[187,1131,1132],{},"Deposit and retainage terms."," State the deposit amount, whether it's refundable, and how it's applied (usually credited against stage 0 or spread across the first stages). State the retainage percentage and its precise release condition.",[18,1135,1137],{"id":1136},"a-worked-cash-flow-comparison","A worked cash-flow comparison",[11,1139,1140],{},"The point of all this is timing. Same $18,000 project, two approaches:",[11,1142,1143],{},[187,1144,1145],{},"Lump-sum, Net 30, invoiced at completion (month 4):",[181,1147,1148,1151],{},[184,1149,1150],{},"Cash in: $0 until roughly day 150",[184,1152,1153],{},"You self-fund four months of work",[11,1155,1156],{},[187,1157,1158],{},"Progress-billed against the schedule above:",[181,1160,1161,1164,1167,1170,1173,1176],{},[184,1162,1163],{},"Month 0: $3,600 deposit",[184,1165,1166],{},"Month 1: $2,700 (stage 1)",[184,1168,1169],{},"Month 2: $3,420 (stage 2, net of retainage)",[184,1171,1172],{},"Month 3: $4,275 (stage 3, net of retainage)",[184,1174,1175],{},"Month 4: $2,565 (stage 4, net of retainage)",[184,1177,1178],{},"Month 5: $2,340 (stage 5 + accumulated retainage $900)",[11,1180,1181],{},"By the end of month 2 you've collected $9,720 on a project you're only a bit over halfway through delivering. That's the difference between a healthy freelance business and one perpetually one late invoice away from trouble.",[18,1183,1185],{"id":1184},"tax-and-record-keeping-notes","Tax and record-keeping notes",[11,1187,1188],{},"A few things to get right, and rules vary by jurisdiction, so confirm with your tax authority or an accountant:",[181,1190,1191,1211,1217],{},[184,1192,1193,1196,1197,1199,1200,1202,1203,1206,1207,1210],{},[187,1194,1195],{},"When to recognise income and charge sales tax\u002FVAT"," usually depends on when each invoice is issued or paid, not on when the whole project finishes. If you're VAT-registered in the UK, each progress invoice is generally a tax point in its own right; see ",[109,1198,618],{"href":617},". US sales tax on services varies by state, covered in ",[109,1201,635],{"href":634},". Canadian GST\u002FHST has its own ",[109,1204,1205],{"href":646},"invoice requirements",", and Australian ",[109,1208,1209],{"href":651},"tax invoices"," have set fields.",[184,1212,1213,1216],{},[187,1214,1215],{},"Deposits can be treated differently from progress claims"," for tax purposes in some jurisdictions. Don't assume they're the same.",[184,1218,1219,1222,1223,1225],{},[187,1220,1221],{},"Keep every progress invoice, change order, and sign-off email"," for the whole project and beyond. Guidance on ",[109,1224,675],{"href":674}," applies here.",[18,1227,1229],{"id":1228},"when-progress-billing-isnt-worth-it","When progress billing isn't worth it",[11,1231,1232],{},"Skip it for anything short or small. A $900 logo delivered in a week doesn't need five invoices, take a deposit and bill the balance. Progress billing carries admin overhead: more invoices, more approvals, more tracking. The break-even point is roughly a project long enough or large enough that carrying the full cost to completion would strain your cash or your nerves.",[11,1234,1235],{},"It also demands a client who signs a proper contract and approves stages promptly. If sign-offs are the bottleneck, add a clause deeming a stage approved if the client doesn't respond within, say, five business days. Otherwise your carefully staged cash flow stalls on someone else's inbox.",[11,1237,1238],{},"Structure the stages, define the triggers in writing, and let each paid invoice unlock the next slice of work. The project funds itself, and you never carry more risk than the current stage.",{"title":281,"searchDepth":282,"depth":282,"links":1240},[1241,1242,1243,1244,1245,1246,1247,1248],{"id":751,"depth":285,"text":752},{"id":773,"depth":285,"text":774},{"id":823,"depth":285,"text":824},{"id":982,"depth":285,"text":983},{"id":1082,"depth":285,"text":1083},{"id":1136,"depth":285,"text":1137},{"id":1184,"depth":285,"text":1185},{"id":1228,"depth":285,"text":1229},"2026-07-27","A practical guide to milestone and staged invoicing for freelancers and contractors, covering deposits, progress claims, retainage, and sample wording.",{},"\u002Fwhat-is-progress-billing",{"title":746,"description":1250},{"loc":1252},"what-is-progress-billing","1f7Wj81KqhhKD9NyCFT0w5kd8bObLSynWMtfQE4jWeY",1785314448533]