EU companies are required to do bookkeeping. This means that if you are working on a freelance basis for an EU company you will have to send invoices to receive payments. Generally EU requirements tend to be more strict than what’s common in the US.

If you have no experience with invoices, Paypal has a nice template you can simply use without needing to use Paypal as a payment method: Paypal invoice template generator

For example, you live in Kenya and you write texts for an awesome financial website that is built by a company in Estonia. To do things properly, you will have to send an invoice. A paypal invoice could work, but if you use paypal you are likely loose a big chunk of your money to them. Instead, you will end up with a lot more Kenyan Shillings if you get your client to sign up with Transferwise and get paid to your Kenyan bank account or even to your MPESA.

Requirements for an EU invoice

  • Date of issue, e.g. July 29th 2019
  • Unique sequential number identifying the invoice, e.g. “Invoice 2345”
  • Supplier’s full name, e.g. “Nelson Mandela”
  • Supplier address, e.g. “First Road nr 6, Johannesburg, South Africa”
  • Customer’s full name & address, e.g. “SEO Crew OÜ, Sepapaja 6, 15551 Tallinn Estonia”
  • Description of quantity and type of goods supplied or type and extent of services rendered, e.g. a list of titles of delivered articles and the unit price for each article
  • Due date, this is the latest date you give the client for payment.

If you are inside the EU and have the handle VAT the following information also has to be provided.
– VAT rate applied
– VAT amount payable
– Breakdown of VAT amount payable by VAT rate or exemption
– Customer’s VAT identification number (if the customer is liable for the tax on the transaction)

Related questions

When to send an invoice?

When you send an invoice depends on the client. Some clients have strict requirements and payment periods. With other clients you have more freedom as a freelancer.

The first payment coming in from a client is the most important.

I helped an NGO in the Middle East, to convert their giant ASP website into Drupal. Started off full of energy. Then there was an unexpected requirement from their side about a tax document. This document took half a year to acquire. After that it took another 3 months for my first payment to arrive. Needless to say we lost a lot of time getting back into the project.
In another case a client ended up never paying. I didn’t have much recourse. My recommendation to freelancers is: try to send a first invoice pretty soon. And my recommendation to companies hiring freelancers: pay early. If you have the liquidity, pay any invoice as soon as you can, especially when you’re working with sole traders. Keeping your freelancers happy is a smart idea when building a business. — Kasper

What’s a good due date for an invoice?

Some clients will have their own requirements about due dates. Government institutions and big corporations tend to pay very late, sometimes 2 months after reception of the invoice. If you’re dealing with smaller businesses it’s generally okay to put 2 weeks.

If you are working for FiFi Finance you can put a due date of 1 week. We aim to pay the same or next day, but this doesn’t always work out if we’re afk for a day or we have to communicate about the work delivered. — Kasper

Further reading

  • https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/vat-invoicing-rules_en