How do I invoice clients as a sole proprietor in the US?

Invoicing as a US Sole Proprietor: The Big Picture

Invoicing is one of those business tasks that looks simple until you actually run a real workflow: different clients want different formats, some need purchase order numbers, others want itemized labor, and nearly everyone wants clarity about what they’re paying for and when. If you’re a sole proprietor in the United States, you don’t need a complex corporate billing department to invoice professionally, but you do need a consistent process that protects your cash flow, reduces misunderstandings, and makes tax time dramatically easier.

At its core, invoicing is a communication tool. You’re documenting what you delivered, the value of that work, and the payment terms you expect. A good invoice is easy to understand at a glance, has no missing details that could delay approval, and keeps you looking credible. A great invoice also supports your recordkeeping: it creates a clean paper trail you can reconcile against bank deposits, track for accounts receivable, and categorize for income reporting.

This guide walks you through how to invoice clients as a sole proprietor in the US, step by step. You’ll learn what to include on an invoice, how to structure payment terms, when to invoice, how to manage deposits and milestones, and how to handle late payments and disputes without damaging client relationships. You’ll also learn practical habits that keep your bookkeeping tidy and your business running smoothly.

What It Means to Invoice as a Sole Proprietor

A sole proprietor is an individual who owns and runs a business without forming a separate legal entity like an LLC or corporation. Many freelancers, consultants, tradespeople, creators, and small service providers operate this way—sometimes under their own name, sometimes under a “doing business as” name (DBA). The invoicing fundamentals are the same regardless of your niche: you’re requesting payment for goods or services, documenting the transaction, and maintaining records.

From an invoicing perspective, being a sole proprietor usually means:

• You invoice clients under your legal name or business name (if you use a DBA).

• You track income and expenses for taxes as a self-employed individual.

• You’re responsible for setting payment terms and following up on overdue invoices.

• You may need to handle sales tax on certain products or services depending on your state and what you sell.

• You should maintain consistent invoice numbering and recordkeeping.

You don’t need an employer identification number (EIN) to invoice, but some clients prefer it, especially business clients who maintain vendor records. You can still invoice with your Social Security Number (SSN) in most cases, but it’s usually better to avoid putting sensitive personal identifiers on invoices. Many sole proprietors obtain an EIN for administrative convenience and privacy.

Why Professional Invoices Matter (Even for Small Jobs)

Some sole proprietors start out billing informally—sending a text message or email like “Hey, it’s $300 for the project.” That might work with a friend or a one-time quick gig, but it breaks down fast as you grow. Professional invoices:

• Reduce payment delays by including everything the client’s accounts payable team needs.

• Lower disputes by clearly documenting scope, quantities, rates, and dates.

• Improve your brand by making you look organized and reliable.

• Support cash flow by pairing invoices with consistent due dates and reminders.

• Create accurate records for tax filings and financial tracking.

• Help you manage multiple clients, projects, and payment schedules without confusion.

Even if you’re a one-person business, invoicing is a core operational system. When you do it well, you spend less time chasing payments and more time doing paid work.

What to Include on an Invoice in the US

A strong invoice includes a standard set of fields. The goal is to make the invoice unmistakably clear: who is billing whom, what was delivered, how much is due, and how to pay. Here’s what you should typically include:

1) Your Business Information

Include:

• Your name (legal name) and/or your business name (DBA name if applicable)

• Your business address (or mailing address)

• Your phone number and email

• Your website (optional, but professional)

• Your tax ID (optional; many avoid including SSN and use an EIN if needed)

This information helps clients reach you if they have questions and ensures your invoice can be processed correctly.

2) The Client’s Information

Include:

• Client’s name or company name

• Billing address

• The name of the contact person (optional but helpful)

• Email address for accounts payable (if applicable)

Always invoice the exact entity that hired you. If a client has multiple departments or subsidiaries, confirming the correct billing name can prevent payment delays.

3) Invoice Number

Every invoice should have a unique invoice number. This is crucial for tracking, follow-ups, and recordkeeping. Many sole proprietors use a simple system like:

• 1001, 1002, 1003…

• 2026-001, 2026-002…

• INV-001, INV-002…

Choose a consistent format, don’t reuse numbers, and avoid gaps when possible (though gaps can happen for legitimate reasons, like voided invoices).

4) Invoice Date and Due Date

Include:

• Invoice date (the date you issue the invoice)

• Due date (the date payment is expected)

Make your terms unambiguous. “Net 30” can be interpreted differently; spelling out the due date avoids confusion.

5) Description of Services or Products

Line-item descriptions should be clear and specific. The goal is to remove any reason for the client to question what the charge covers. Depending on your work, include:

• Project name or reference

• Service description (e.g., “Website copywriting for product pages”)

• Dates of service (e.g., “Services performed Jan 10–Jan 24”)

• Quantity and rate (hours x hourly rate, units x unit price)

• Milestone stage (e.g., “Phase 2 deposit” or “Final payment”)

If you bill hourly, include hours and rate. If you bill fixed-fee, show the package or deliverable name. If you bill expenses, itemize them (with notes like “client-approved reimbursable expenses”).

6) Subtotal, Taxes, Discounts, and Total

Most invoices include:

• Subtotal (sum of line items)

• Discounts (if any)

• Sales tax (if applicable)

• Other fees (if applicable and agreed in advance)

• Total amount due

Sales tax rules vary by state and by what you sell. If you sell taxable goods or certain taxable services, you may need to collect and remit sales tax. If you’re not sure, consult your state’s tax guidance or a professional. If sales tax is not applicable, don’t add it.

7) Payment Instructions

Tell the client exactly how to pay. Include:

• Accepted payment methods (bank transfer, card, ACH, check, etc.)

• Where to send payment (a link, mailing address, or bank instructions)

• Any needed reference (invoice number, project code)

The easier you make payment, the faster you get paid.

8) Payment Terms and Policies

Your invoice should clearly state:

• Payment terms (Due on receipt, Net 7, Net 15, Net 30, etc.)

• Late fees (only if you already agreed to them in writing with the client)

• Accepted partial payments (if allowed)

• Deposit policy (if relevant)

• Refund/chargeback policy (if relevant)

Be careful with late fees: some clients won’t accept them, some states have limitations, and many companies require them to be disclosed in the contract or vendor agreement. If you use late fees, put them in your agreement and restate them on the invoice.

9) Notes and Supporting Details

Use an optional notes section for helpful context, such as:

• “Thank you for your business.”

• “Please include invoice number on payment.”

• “PO #12345”

• “Work completed per proposal dated…”

• “Payment schedule: 50% deposit paid, 50% due now.”

For some clients, including a purchase order number, vendor ID, or contract reference is essential. Ask for those details early.

Choosing the Right Payment Terms for Your Business

Payment terms aren’t just administrative; they shape your cash flow. As a sole proprietor, you’re likely paying for tools, rent, subscriptions, and taxes while waiting for clients to pay. Your terms should reflect both industry norms and your risk tolerance.

Common Payment Terms

• Due on receipt: The invoice is payable immediately. This can work for small projects, repeat clients, or when you deliver quickly.

• Net 7 / Net 15: Payment due 7 or 15 days after invoice date. Good for freelancers who want faster cash flow while still being reasonable for business clients.

• Net 30: Common for corporate clients. It can be okay if you have reserves, but it can strain a small business if overused.

• Net 45 / Net 60: Often requested by large organizations. Use caution; consider raising prices, requiring deposits, or negotiating partial payments.

How to Decide

Consider:

• Your industry: Creative services might tolerate Net 15, while enterprise procurement might push Net 30.

• Your client type: Individuals and small businesses often pay faster than large enterprises with formal approval chains.

• Project size: Larger projects usually justify deposits and milestone billing to reduce risk.

• Your leverage: If you’re in high demand, you can set stricter terms.

Whatever you pick, be consistent and communicate terms before work begins. The invoice should never be the first time the client sees your payment expectations.

When to Invoice: Timing Strategies That Help You Get Paid

Many new sole proprietors invoice only at the end of a project. That’s fine for short jobs, but it can leave you exposed on longer projects. Better invoicing timing can stabilize your income and prevent awkward conversations.

Common Invoicing Schedules

• Upfront deposit: Invoice a percentage before you start (e.g., 30%–50%).

• Milestone billing: Invoice at agreed project checkpoints (e.g., discovery complete, first draft delivered, final delivery).

• Monthly billing: Invoice monthly for ongoing work (retainers, maintenance, consulting).

• Completion billing: Invoice at final delivery for small, quick projects.

Retainers and Ongoing Work

If you provide ongoing services—social media management, bookkeeping, consulting, coaching, design support, maintenance—consider a retainer. A retainer invoice is typically issued at the start of a billing period. This approach improves predictability for you and creates a clear expectation for the client.

For retainers, include the period covered and what’s included (hours, deliverables, response times). If you bill overages, make that explicit and invoice additional amounts separately or on the next cycle.

How to Handle Deposits, Partial Payments, and Installments

Deposits and partial payments are common and smart for sole proprietors. They reduce risk, cover upfront time, and help you avoid financing the client’s project out of pocket.

Deposits

A deposit invoice is typically labeled clearly, such as “50% Deposit to Begin Work.” If you do this, make sure your agreement states:

• Deposit amount or percentage

• Whether it’s refundable or non-refundable

• What triggers project start

• How the remaining balance will be invoiced

On later invoices, reference the deposit and show how it’s applied to the total.

Installment Plans

Installments can make larger projects more accessible to clients. If you offer installment billing:

• Specify the schedule (dates or milestones)

• Specify what happens if a payment is late (pause work, late fee if agreed, rescheduling)

• Keep the invoice descriptions clear (“Installment 2 of 4”)

Installments require consistent follow-through. Send invoices on schedule, and don’t keep delivering indefinitely if payments fall behind.

Best Practices for Invoice Layout and Clarity

Invoices shouldn’t be cluttered. They should be clean, readable, and easy to approve. A few layout tips:

• Put the total due and due date in a prominent location.

• Use line items with short, specific descriptions.

• Avoid vague labels like “Services rendered” without detail.

• If there’s a lot of detail, keep the invoice summary short and attach a separate statement of work if needed.

• Use consistent formatting across all invoices.

• Make invoice numbers and client details easy to find.

Professional design matters, but clarity matters more. A simple, consistent template beats an overly styled invoice that hides key information.

How to Invoice for Different Types of Work

Sole proprietors work in many industries, and the “right” invoice structure depends on how you charge.

Hourly Billing

For hourly work, include:

• Hourly rate

• Hours worked (optionally broken down by task)

• Dates or period of work

Clients often appreciate a short summary of tasks, especially if they’re expense-conscious or have internal approval requirements.

Fixed-Price Projects

For fixed-fee work, include:

• Project name

• Deliverables or package name

• Any included revisions or scope notes

• Milestone label if applicable

This format is best when the client wants predictability and you want to avoid constant time tracking.

Product Sales

For product sales, include:

• Item name or SKU

• Quantity

• Unit price

• Shipping (if applicable)

• Sales tax (if applicable)

If you ship physical goods, include shipping details in notes or attach a packing slip if needed.

Reimbursable Expenses

If your agreement allows reimbursable expenses, itemize them and keep documentation. Some clients require receipts. Keep expense line items separate from labor to make approvals easier.

Handling Sales Tax and Other Taxes

Many sole proprietors worry about taxes on invoices. The key is distinguishing between income tax (your responsibility) and sales tax (a pass-through tax you may collect and remit).

Income Tax and Self-Employment Tax

You typically don’t add income tax to invoices for most service work. Instead, you track your income and expenses and handle tax payments through estimated taxes and annual filings. Self-employment tax is also handled through your tax return, not added to the invoice as a separate line item.

Sales Tax

Sales tax rules depend on your state and the nature of what you sell. Some states tax certain services, most tax tangible goods, and many have specific rules for digital products. If you are required to collect sales tax:

• Register with the state and obtain a sales tax permit

• Apply the correct rate based on your rules (and sometimes the customer’s location)

• Show sales tax as a separate line item

• Remit collected tax on schedule

If you are not required to collect sales tax, you generally don’t include it. If a client asks for sales tax on a non-taxable service, you can explain that your service is not subject to sales tax in your jurisdiction (if that’s true) and keep the invoice clean.

How to Request the Information You Need From Clients

Missing client details are a major reason invoices get delayed. Before you start work (or at least before you invoice), collect the basics:

• Correct billing name and address

• Accounts payable email (if different from your main contact)

• Purchase order number (if required)

• Vendor onboarding requirements (some clients need you in their system)

• Preferred payment method

• Any invoicing rules (net terms, required descriptions, formatting)

It’s perfectly professional to ask, “Do you have any invoicing requirements I should follow to ensure prompt payment?” Clients often appreciate that you’re proactive.

Delivering the Invoice: Email, Portals, and Client Preferences

How you send the invoice matters. Some clients pay only when invoices are submitted to a portal; others want a PDF attachment; some prefer a link they can pay online.

Emailing an Invoice

If you email invoices:

• Use a clear subject line (e.g., “Invoice 2026-014 for January Services”)

• Include the due date and total in the email body

• Attach a PDF or provide a secure payment link

• Send to the correct accounts payable contact

Client Portals

For larger clients, you may need to submit invoices through a portal. In those cases:

• Follow their required fields exactly

• Upload supporting documentation if requested

• Keep records of submission confirmations

• Note the portal submission date so you can track terms accurately

Payment Links and Online Payments

Giving clients a fast way to pay can significantly reduce turnaround time. Online payment options also reduce friction for clients who don’t want to mail checks or initiate bank transfers. If you accept cards or ACH, disclose any processing fees ahead of time if you plan to pass them along (many businesses choose to absorb fees and price accordingly).

Tracking Outstanding Invoices and Accounts Receivable

Invoicing isn’t finished when you send the invoice; it’s finished when you get paid and record the payment. Accounts receivable tracking is how you prevent invoices from slipping through the cracks.

At minimum, track:

• Invoice number

• Client name

• Invoice date

• Due date

• Amount due

• Amount paid

• Payment date

• Payment method and reference

• Status (sent, viewed, partially paid, paid, overdue)

Consistent tracking helps you spot patterns: which clients pay late, which projects are most profitable, and what your monthly cash flow looks like.

Late Payments: How to Follow Up Without Burning Bridges

Late payments happen, even with good clients. Your goal is to be firm, consistent, and professional. Many late payments are caused by simple issues: the invoice went to the wrong person, the client forgot, the invoice lacked a required PO number, or the client’s internal approvals took longer than expected.

A Simple Follow-Up Sequence

1) Friendly reminder (1–3 days before due date): A short note confirming the upcoming due date.

2) Due date reminder (on due date): Polite message with invoice number, amount, and payment link.

3) Overdue notice (3–7 days after due date): Clear statement that the invoice is overdue and request an ETA.

4) Final notice (14+ days after due date): More direct language, possibly pausing work if applicable.

When you follow up, always include:

• Invoice number

• Amount due

• Due date

• Payment method/link

• Any required reference (PO number, project code)

Work Pause Policy

For ongoing work, consider a policy like: “Work may pause if invoices are more than X days overdue.” This protects you from continuing to deliver services without payment. If you adopt this, include it in your service agreement and restate it on invoices or in onboarding materials.

Disputes and Adjustments: Credits, Revisions, and Scope Clarity

Sometimes a client questions an invoice. Handle disputes calmly and focus on documentation.

Common Dispute Causes

• Client expected a different price or payment schedule

• Scope creep (“Can you just add this one more thing?”) wasn’t documented

• Hourly work lacks detail or approval

• Client wants more revisions than included

• The invoice doesn’t match the agreed proposal

How to Prevent Disputes

• Use written estimates or proposals that specify price and deliverables

• Confirm changes in writing before doing extra work

• Keep invoices aligned with the proposal language

• Itemize clearly and reference project milestones

Credit Notes and Refunds

If you need to reduce an invoice amount after it’s issued, don’t just “edit history” without a record. Instead, issue a credit note (or a corrected invoice) that shows what changed and why. This keeps your records clean and prevents confusion later. If you refund a paid invoice, record the refund transaction and keep a note explaining the reason.

Recordkeeping and Tax-Time Readiness

Invoicing ties directly to your financial records. Good habits make tax season much easier and reduce the chance of missing income or misclassifying transactions.

Keep These Records

• Copies of all invoices sent

• Payment confirmations and receipts

• Contracts, proposals, and client emails that establish terms

• Receipts for business expenses

• Bank statements and transaction records

• Notes on refunds, credits, or disputes

Separate Business and Personal Finances

Even as a sole proprietor, it’s wise to separate business finances. Using a dedicated business bank account makes reconciliation easier and creates clearer documentation if you ever need to verify income and expenses. It also helps you understand what your business is actually earning.

Cash vs Accrual Considerations

Many sole proprietors track income on a cash basis (income is counted when received), but some use accrual (income counted when earned/invoiced). Your invoicing and bookkeeping process should align with how you track income for reporting and planning. If you’re not sure, a tax professional can help you choose the best method for your situation.

Setting Your Invoicing Process Up for Speed and Consistency

The easiest way to invoice clients consistently is to create a repeatable workflow. Here’s a practical process that works for most sole proprietors:

1) Confirm client billing details before work begins.

2) Agree on pricing and payment terms in writing.

3) Choose an invoicing schedule (deposit, milestones, monthly, or completion).

4) Create and send the invoice promptly at the agreed time.

5) Track invoice status and schedule reminders.

6) Record payment as soon as it arrives and issue a receipt if appropriate.

7) Reconcile payments with bank records regularly.

8) Store invoices and related documents in an organized way.

This process prevents most invoicing headaches. The biggest mistakes sole proprietors make are invoicing too late, forgetting to follow up, and not documenting changes to scope.

Common Invoicing Mistakes Sole Proprietors Should Avoid

Even experienced business owners can stumble on invoicing. Avoid these common issues:

• Not numbering invoices: It makes tracking and follow-ups harder.

• Using vague descriptions: It invites delays and disputes.

• Forgetting due dates: Clients may pay slower when terms are unclear.

• Invoicing inconsistently: Clients don’t know what to expect, and you lose control of cash flow.

• Accepting slow terms without a plan: Net 60 can be painful unless you have reserves or milestone billing.

• Not requesting a PO number when required: Corporate clients may reject invoices without it.

• Mixing personal and business income: It complicates taxes and bookkeeping.

• Letting overdue invoices slide: Silence signals that late payment is acceptable.

How to Make Invoices Client-Friendly (And Get Paid Faster)

Clients don’t wake up excited to process invoices. Make it easy:

• Send the invoice to the right person the first time.

• Use clear subject lines and file names (include invoice number).

• Provide multiple payment options when possible.

• Put the total and due date where they can’t be missed.

• Keep descriptions understandable to someone who wasn’t involved in the project daily.

• Add a short, polite note that reinforces professionalism.

Fast payment often comes down to convenience and clarity, not pressure.

Invoicing for International Clients From the US

If you invoice clients outside the US, the fundamentals remain the same, but you may need a few extra details:

• Currency: Specify whether you invoice in USD or another currency.

• Payment method: International bank transfers can be slow and may include fees; online payments may be easier.

• Address format: Include full addresses as provided.

• Tax language: If the client asks about VAT/GST, clarify that you are a US-based sole proprietor and whether any local tax applies (often it doesn’t for services, but rules vary).

For international work, your contract should specify payment currency, who pays transfer fees, and what counts as “paid” (for example, when funds clear in your account).

How Invoice24 Fits Into a Smooth Invoicing Workflow

When your invoicing tool has the right features, it becomes easy to stay consistent: generate professional invoices, keep numbering clean, track statuses, send reminders, accept payments, and store records. The best invoicing setup is the one you actually use every time—because it reduces friction and keeps your business organized.

A modern invoicing process should support how sole proprietors really operate: you’re balancing client work, admin tasks, and financial planning all at once. Having everything in one place—invoice creation, client details, payment tracking, and a clear view of what’s overdue—helps you spend less time on billing and more time on delivering great work.

A Practical Checklist You Can Use for Every Invoice

Before sending an invoice, quickly confirm:

• Correct client billing name and address

• Unique invoice number

• Invoice date and due date included

• Services/products clearly described with dates and quantities

• Subtotal and total correct

• Taxes included only if applicable

• Payment instructions included and easy to follow

• Payment terms match what you agreed

• PO number or reference included if required

• Your contact information is present

This checklist catches the small errors that cause big delays.

Final Thoughts: Make Invoicing a System, Not a Stress

As a sole proprietor, invoicing is one of your most important business systems. When done consistently, it supports your cash flow, improves your client experience, and gives you clean records for tax time. The goal is not to create the fanciest invoice on earth; it’s to create a reliable process that ensures you get paid for the value you deliver.

Start with the essentials: clear invoice details, consistent numbering, straightforward payment terms, and easy ways for clients to pay. Add structure as your business grows—deposits, milestone billing, reminders, and better tracking. Over time, invoicing becomes routine, and the routine becomes one of the foundations that helps your business feel stable and professional.

If you treat invoicing as part of your service—not an afterthought—you’ll spend less time chasing payments and more time building the kind of sole proprietorship that can grow, adapt, and thrive.