As a freelance computer programmer or web developer, you must know how to manage the invoicing process. Indeed, managing invoicing is one of your essential tasks, and it is not limited to issuing invoices. To correctly manage your billing, you must:
- Apply a suitable invoicing method,
- Adequately value the price of your services,
- Respect the formalities linked to the invoice.
A practical guide answers the question: how should a freelance computer programmer or web developer invoice?
The Different Methods Of Billing A Web Developer
As a business manager, you can freely determine the invoicing method to apply. You, therefore, have several possibilities:
- Bill your services based on time spent,
- Invoice your services according to a fixed price,
- Or invoice your services based on the result obtained.
Most computer programmers calculate the price of their services based on time spent or daily rate. You can also, for specific development projects, mix two solutions. This involves, for example, providing an upwardly adjustable package in the event of exceeding the number of hours defined in advance or when additional services are requested from you.
This solution is highly recommended in practice, especially if you need help estimating the time needed to carry out certain services billed on a fixed price basis. A quote could serve as a reference. Finally, billing based on results represents the solution least adopted by web developers in practice. Indexed on the final result, it has an uncertain nature. You should only consider this type of remuneration when you are sure of obtaining sufficient results. Furthermore, an agreement must provide for all the characteristics of the collaboration and the calculation of invoicing.
Valuation Of The Price Of The Services Of A Computer Programmer
To invoice your services, whatever method you choose, you must set a price. You have to:
- Value the price of an hour of work (if you opt for billing based on time spent),
- Estimate the time spent on different tasks and multiply it by the rate of an hour of work (if you charge flat rates),
- Or determine a predictable profit (if you opt for remuneration for results).
The rate you choose must allow you to pay yourself correctly. In addition, its amount must be sufficient to pay:
- Social security charges are calculated on the amount of your salary,
- Your other expenses (operating expenses and overheads).
Here is a simple calculation method to determine the cost price of your services (and therefore, indirectly, the rate excluding taxes to be invoiced per hour of work):
- Identify all of your company’s expenses and estimate their amount,
- Calculate the number of days worked over the year (or the number of hours),
- Remove from the figure obtained the non-billable days and hours (training, prospecting, etc.),
- Divide the total amount of your charges by the number of billable hours (or days) worked.
The number you will obtain corresponds to the minimum amount to bill to cover your annual expenses while receiving the desired remuneration. Your profit would, under these conditions, be zero.
We advise you to assess this amount: is it reasonable and consistent with the market? How can it contrast with your rivals’ costs?
The Rules Governing The Invoicing Of A Programmer/Developer
Invoicing Software
Contrary to popular belief, using invoicing software is not mandatory for a web developer. Therefore, you can very quickly prepare your invoices on an Excel spreadsheet or a pre-filled paper slip. However, invoicing software has many advantages. It notably reduces the risk of error (forgetting mandatory information, for example). In addition, it can offer interesting additional features: monitoring of collections, reminders of late customers, generation of dashboards, etc.
Information Prescribed By Law
That said, here are the mandatory information to appear on your invoices:
- Date of issue of the invoice (in principle, the date of execution of your services);
- Date of completion of the invoiced service (if different from the invoice date);
- Document number ( numbering based on a continuous chronological sequence);
- Legal information on the service provider (name, address, registration number, capital, etc.);
- Legal information on the beneficiary of the service (name, address, registration number, capital, etc.);
- Your company’s VAT identification number,
- Information on each service (designation/nature, unit price excluding taxes, quantity, etc.);
- Details of all price increases or reductions (discounts, rebates and rebates);
- Total amount excluding taxes of the invoice, applicable VAT rate and amount including all taxes (TTC);
- Notable mentions in the event of VAT exemption (essential franchise, for example);
- Information relating to the payment of the invoice (payment deadline, discount rate for early payment, late payment penalty rate and amount of fixed compensation for late payment);
- Special mention indicating that your company accepts payments by check and bank card (if you belong to an approved management association).
Also Read: How To Easily Create A Digital Invoice