Client Billing: The Step-by-Step Guide on How to Bill Clients
Getting paid shouldn’t feel harder than the work itself but for many freelancers and small businesses, the customer billing process often turns into a headache. Missed details, unclear terms, or late invoices can create frustration and cash flow problems.
The good news? Client billing doesn’t have to be stressful. In this guide, you’ll learn how to bill clients accurately, get to know different client billing methods, and how to handle common billing challenges. By the end, you’ll have a step-by-step invoicing process you can rely on.
EARLY’s easy and smart experience, paired with its powerful reporting functionality, makes billing time a delight
What is client billing?
Client billing is the process of charging for your time, work, or services. It usually involves recording what you’ve done, creating an invoice, and sending it to the client so you can get paid.
Why does it matter? Because accurate billing and invoicing:
- Builds trust – sending professional invoices with clear, transparent details reflects your professionalism and helps clients feel confident in your services.
- Protects your cash flow – reduces delays and avoids payment disputes.
- Saves time and stress – a simple system means less back-and-forth with customers.
📊 Did you know? According to Remote’s Contractor Management Report, 85% of freelancers have their invoices paid late at least some of the time. One way to reduce this risk is by using a clear billing process – when clients know exactly what they’re being charged for, when payments are due, and what happens if they’re late, there’s less room for misunderstanding or delay.
What is the client billing process?
Now that you know what client billing is and why it matters, let’s look at the process behind it. The client billing process is the step-by-step flow that turns your work into payment. Establishing efficient billing workflows helps ensure accuracy and timely payments. In practice, it means you:
- Track billable time and expenses.
- Agree on payment terms with the client.
- Create a complete, easy-to-read invoice.
- Send it promptly and follow up if needed.
- Reconcile payments to keep your records accurate.
The next section will walk you through each of these steps in detail.
Tip: Read our article about project billing.
How does client billing work? Step by step
A consistent invoicing process is what separates smooth client billing from chaotic, late-night invoice scrambles. Leveraging technology and automation can streamline billing processes and reduce errors. Here’s how to bill a client in 4 easy steps:
Step 1: Track your time and expenses
You can’t bill accurately if you don’t record your work. Relying on memory often means missed hours, forgotten revisions, or undercharging.
Best practice: Track your time daily. That includes calls, emails, edits, and any small tasks that still take time.
👉 Tools like EARLY make this easy by letting you capture billable hours in real time. When it’s time to invoice, you have a reliable record of your work – no guesswork.
With EARLY, you can access accurate reports with just one click
Step 2: Set clear payment terms upfront
Many billing disputes come down to unclear agreements. To avoid this, agree on the basics before you start working. Your payment terms should cover:
- Invoice schedule (weekly, monthly, after milestones).
- Payment due dates (e.g., net 14 or net 30).
- Accepted payment methods (bank transfer, PayPal, Stripe, etc.). Consider offering more than one payment option to increase client convenience.
- Late fees or interest for overdue payments.
- Deposits (common for large projects).
Why it matters: Clear terms protect your revenue and set professional boundaries. They also make clients take your work more seriously.
Step 3: Create a professional invoice
Invoices don’t need to be fancy, but they must be complete. Here is what you always need to include:
- Your business name and contact details.
- Client details.
- Invoice number and date.
- Services provided with hours or quantities.
- Project details (such as hours tracked or P.O. numbers).
- Rates and total amount due.
- Billing amount.
- Payment terms and due date.
- Bank account information for payments.
💡 Tip: Use simple language. An invoice that’s easy to read gets paid faster.
Don’t want to build invoices from scratch? Use your own invoice template or switch to invoicing software like FreshBooks, QuickBooks, or Wave. They automate creating invoices, store your invoice templates, and help manage client billing. These tools can also pull in billable hours (from tools like EARLY) or expenses, reducing errors and saving time.
“I’m 107% happier. Last week I clocked up the 2nd highest amount of billable hours I’ve ever recorded.”
Step 4: Send invoices promptly (and follow up)
The sooner you send your invoice, the sooner you get paid. Waiting weeks after finishing a project only delays payment.
📌 Best practice: Send invoices the same day the project milestone is completed or at the end of the billing cycle (weekly or monthly).
Following up is just as important. Even well-intentioned clients sometimes miss deadlines, so don’t hesitate to send a reminder:
- 👉 Example reminder (polite, first follow-up):
“Hi [Name], I hope you’re doing well. Just a quick reminder that Invoice #1034 (due July 15) hasn’t been marked as paid yet. Could you let me know when I can expect the payment?”
- 👉 If still unpaid, send a firmer second follow-up with a specific deadline:
“Hi [Name], I wanted to follow up again on Invoice #1034. As per our agreement, payment was due on July 15. Could you please confirm that the payment will be processed by [new date]?”
If late payments keep happening, consider adding late fees to future contracts. This sets clear expectations and encourages timely payments.
Different client billing methods: How to bill a client?
Sending invoices promptly is only half the story. The other half is choosing the right billing method: hourly billing, fixed fee, or other. Let’s look at the most common options.
Keep in mind: There’s no single “best” billing method. It depends on your type of work, your client relationships, and your business goals.
💡 Tip: Many professionals use a hybrid approach – for example, charging a flat project fee for the main deliverables, plus an hourly rate for extra revisions or out-of-scope requests.
Here are the most common methods, with pros, cons, and real-world examples:
Hourly billing:
You agree on an hourly rate with your client and charge them for the exact time you spend working. You usually track your time with a time tracking tool like EARLY.
- Pros: Flexible for projects with unclear or variable scope, easy for clients to understand.
- Cons: Clients may worry about “runaway” costs; requires detailed time tracking.
- Best for: Consulting, legal work, development projects with changing requirements.
💡 Tip: Not sure how to calculate your hourly rate? 👈 This article is a must-read!
Flat fee (per project)
You and the client agree on a fixed total price for the entire project, no matter how many hours it takes you to complete it.
- Pros: Predictable cost for clients, easier to sell.
- Cons: Risk of underestimating time; scope creep can eat into your profits.
- Best for: Design projects, websites, writing assignments where deliverables are well defined.
Value-based pricing
You set your price based on the value your work creates for the client (e.g., revenue, visibility, conversions), not just time spent.
- Pros: Ties your price to the results delivered (e.g., revenue, visibility, conversions). Can significantly increase earnings.
- Cons: Requires strong client trust and proof of value; not every service is measurable in outcomes.
- Best for: Marketing campaigns, high-level strategy, design work tied to ROI.
Retainer billing
Retainer agreements are formal arrangements where the client pays you a regular recurring fee (often monthly) for ongoing services, ensuring your availability for a set amount of work or hours each period. These agreements typically involve recurring payments, which help establish trust and a systematic billing process.
- Pros: Stable, recurring income; creates a predictable income stream for your business; builds long-term client relationships.
- Cons: Harder to secure upfront; may lock you into long-term commitments.
- Best for: Agencies, consultants, or freelancers providing ongoing services and looking to build long-term client relationships.
Subscription
The client pays a recurring subscription fee to access a defined package of services or deliverables (e.g., X blog posts per month, ongoing support).
- Pros: Predictable, scalable income; great for repeatable services.
- Cons: Doesn’t work well for one-off or highly customized projects; needs clear boundaries.
- Best for: SaaS, coaching, managed services, or packaged creative work.
Our selection of the best billing software
Billing doesn’t have to eat up hours of your week. The right software can help you create invoices in minutes, send automated reminders, and track payments without endless spreadsheets. On top of that, billing tools reduce errors, keep your financial records in order, and free you up to focus on actual client work.
Here are some of the most popular options worth considering:
- QuickBooks – A full-featured accounting and billing platform, perfect for small and medium businesses. It streamlines invoicing, tax prep, and expense tracking, with extensive integrations.
- FreshBooks – User-friendly and intuitive, designed for freelancers and service providers who want simple invoicing, built-in time tracking, and payment options like Stripe or PayPal.
- Zoho Invoice – Free for small businesses, offering customizable invoices, time tracking, and payment reminders. Ideal if you’re just starting out.
- Xero – A solid choice for businesses needing detailed reporting and multi-currency support. It integrates smoothly with banks and payment gateways.
- Wave – Completely free invoicing and accounting software, making it a great budget-friendly solution for startups and solo entrepreneurs.
Each of these tools helps reduce manual work while making your billing process faster, more accurate, and more professional. And if you want to maximize the benefits, pair your billing software with a time tracker like EARLY. By capturing every billable hour automatically, EARLY ensures your invoices are precise and transparent.
“Thanks to the transparent and accurate work-logs, we have been able to objectively bill up to 25% more time on different projects.”
Common billing challenges (and how to handle them)
Even with a clear invoicing process, client billing doesn’t always go smoothly. Here are the most common challenges – and practical ways to handle them.
1. Late payments
It’s the #1 frustration for freelancers and agencies: clients miss deadlines. Sometimes it’s oversight, sometimes it’s cash flow issues on their side.
How to handle it:
- Monitor outstanding invoices to act once the payment deadline has passed.
- Send a polite reminder as soon as the due date passes.
- If there’s still no response, follow up with a firmer message that includes a new deadline.
- For chronic late payers, build late fees into your contracts.
👉 Example wording for a reminder:
“Hi [Name], just a quick note that Invoice #2124 was due on July 10. Could you let me know when I can expect the payment?”
2. Scope creep
Clients ask for “just one more thing,” and before you know it, you’ve worked hours beyond the agreed scope.
How to handle it:
- Pause and confirm: “I’d be happy to take this on. Since it’s beyond the original agreement, I’ll update the estimate and invoice.”
- Always update your invoice or contract before doing extra work.
3. Disputes over charges
Even with a clear agreement, clients may push back on an invoice — questioning the number of hours logged, the scope of work covered, or unexpected costs.
How to handle it:
- Be transparent from the start – share your hourly rate, billing method, and scope in writing before the project begins.
- Use a time tracking tool to log billable hours transparently.
- Break invoices into line items so clients see exactly what they’re paying for.
- Stay calm and professional – disputes often come from lack of clarity, not bad faith.
4. International clients
Working with clients from all around the world adds complexity. Differences in currencies, tax regulations, and payment systems can create confusion or delay your cashflow if not handled properly from the start.
How to handle it:
- Agree on a currency before you start.
- Use trusted platforms like Wise, PayPal, or Stripe to simplify payments.
- Check tax rules (e.g., VAT in the EU) to avoid compliance issues.
5. Unresponsive clients
Few things are more frustrating than doing the work and then hearing nothing back. Sometimes clients are just busy – other times, they’re quietly avoiding payment.
How to handle it:
- Keep a paper trail of all communication and invoices.
- Follow up multiple times with increasing firmness.
- If the amount is large, consider involving collections or legal action.
💡 Pro tip: The best defense against billing challenges is a solid contract. Outline scope, payment terms, and consequences for late payment upfront. It’s much easier to resolve problems when expectations are documented.
How to optimize your billing process: Best billing practices
- Always include at least two ways to pay. Providing flexible payment options and different payment methods (electronic funds transfer, bank transfer, card, PayPal, etc.) meets client preferences, reduces payment friction, and helps you get paid faster.
- Go digital. Use automated billing and invoicing tools to streamline the process of generating invoices and accepting payments online. Online payment portals make transactions smooth, professional, and trackable.
- Set up automatic reminders. Don’t chase invoices manually. Schedule reminders to go out 3 days before the due date, on the due date, and 7 days after if unpaid.
- Automate where you can. Automated billing can save time by handling recurring invoices and can also support payment plans for clients who need more flexibility, freeing you up to focus on higher-value work.
- Comply with legal and regulatory requirements. Always include mandatory details such as your business name, address, tax ID, invoice number, dates, payment terms, and taxes. This ensures regulatory compliance and prevents rejected invoices.
FAQ
How can time tracking help you with client billing?
Time tracking gives you a transparent record of your billable hours. This helps you create accurate invoices without guessing, show clients exactly what they’re paying for and avoid disputes about time spent on tasks. Using a time tracking tool like EARLY makes the billing process automatic, ensuring that every meeting, call, or revision is logged and ready for invoicing. Integrating time tracking with project management tools can further streamline client billing by connecting tracked hours directly to project tasks and budgets.
What is the time limit for issuing an invoice?
The time limit depends on local regulations. In some countries, invoices must be issued within 15–30 days of completing the work. Even if there’s no legal requirement, sending your invoice right away is always best practice. It shows professionalism and helps you get paid faster.
How to ask a client for more money?
The first thing you can do is review the contract or agreement you have with that client and confirm that it is in line with the desired parameters. If not, you must be clear and specific when requesting more money from your client to ensure they understand why you wish to ask for more. Remember to be flexible and open to negotiation so everyone stays happy, and always maintain a professional tone.
How to ask a client for more money?
You can either send a friendly reminder email or a message to the client reminding them that payment is due. Don’t forget to be clear and specific about the amount owed, the due date, and the payment methods accepted.
If the client has any questions or concerns about the payment process, offer help and provide a deadline for payment to encourage the client to act asap.
Should I bill upfront or after delivery?
It depends on the project and the client. For large or first-time projects, ask for a deposit to protect yourself. For ongoing clients, a regular schedule (such as monthly) usually keeps cash flow steady.
What if a client refuses to pay?
Start by sending reminders and pointing them back to your contract. If that doesn’t work, escalate with late fees or involve legal help. For larger sums, collections agencies can be an option of last resort.
Hourly or project-based billing: which is better?
Both have advantages. Hourly billing gives you flexibility for changing projects, while project-based billing offers predictability for both you and the client. Many freelancers combine the two to balance risk and reward.
How do I handle international clients?
Working across borders adds extra steps, but it’s manageable. Agree on a currency before starting, check if any taxes like VAT apply, and use reliable payment platforms like Wise or PayPal. This keeps the billing process smooth for both sides.
What if a client keeps asking for “just one more thing”?
This is scope creep, and it’s common. Politely remind the client that the request goes beyond the original agreement, and confirm the extra cost before doing the work. Setting this boundary early prevents bigger issues later.
How to bill a client for the first time?
Billing a client for the first time may feel intimidating, but the process is straightforward if you keep it clear and professional. Start by agreeing on the basics upfront—your rate, payment terms, and preferred payment method. Once that’s set, create a professional invoice using invoicing software like QuickBooks, FreshBooks, or Zoho Invoice.
Your first invoice should include your business and client details, a unique invoice number, the invoice and due date, a description of the work or hours billed, and the total amount due with clear payment instructions.
If you charge hourly, use a time tracker like EARLY to record your billable hours accurately. This adds transparency and builds trust with the client. Finally, send the invoice promptly and, if needed, set up automated reminders to follow up on late payments.
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