The Difference Between US and UK Invoices

One of the most important things that most freelancers need to do is to get familiar with invoices.

Because your invoice is the only legal way that you can get money into your business, it’s important that you be aware of what an invoice is, how to make one, and what you need to include in it.

However, invoicing can be quite confusing by itself. It can get even more confusing if you try to figure out how to do invoices in different countries, such as the US and UK.

Bernard Meyer, Head of Marketing at InvoiceBerry—the online invoicing software made for freelancers and small businesses—gives us a look at these two regions and discusses their main differences.

What is an invoice?

An invoice is basically a document that the supplier (seller) sends to the buyer after the goods or services have been delivered. It is legally binding if both parties have agreed to the terms of the sale.

Because of this, an invoice is also a non-negotiable document.

To the seller, the invoice is known as a sales invoice, while the buyer calls it a purchase invoice. These are the same invoice, and the difference is only in the name.

The sales invoice goes to your account payable (money that you owe) and the purchase invoice goes to your account receivable (money that you’re owed).

A US Invoice

The US is, fortunately or unfortunately, quite relaxed when it comes to rules and regulations on invoicing. For the most part, if you are a B2C selling to US customers, you probably won’t need to send out an invoice at all.

Most businesses in the US simply issue receipts to their customers.

Receipts are different from invoices in that they aren’t usually itemised. However, the most important distinction is that they are a record of payment that has already been submitted. An invoice is for payment that still needs to be completed.

However, if you are providing services to a business, then you’ll need an invoice. This is because businesses have accounting departments that will not be able to make payment without a proper invoice.

For this, you’ll need the following items in your invoice:

  • the name and contact info of the seller
  • the name and contact info of the buyer
  • the word invoice prominently displayed
  • a unique invoice number and the date of the invoice
  • a description of the product/service, including the unit price and quantity
  • the date that the product/service was provided
  • the total amount being charged
  • and lastly the due date for the payment

Instead of having to create your own invoice from scratch, you can download one of the many US invoicing templates here.

Lastly, you may or may not need to add sales taxes to your invoices. This depends largely on the state or local government that you’re in, but it also depends on exactly what services you’re offering.

Some states may only require you to add sales tax if you’re a registered business. Others may require it if the invoice exceeds a certain amount.

Because of the size and the political composition of the US, it’s difficult to determine who needs to add sales tax or when. It is best to look at your own region in the US to determine if you’ll need to apply sales tax.

The UK Invoice

Invoices for the UK are a bit more consistent and regulated than the US counterparts. The largest difference is in the VAT required for UK businesses.

Generally, you only need to apply VAT if you are a VAT-registered business.

According to HMRC, you have to register for VAT if your VAT taxable turnover (everything that isn’t VAT exempt) is more than £83,000 in any 12-month period.

If you are not, there’s no need to apply it and you will only need to add the same parts to your invoice as listed above.

However, sole traders will have to include:

  • the sole trader’s name or a business name the trader is using
  • if using a business name, an address where legal documents can be delivered

Limited companies will have to include:

  • the full company name as it appears on the certificate of incorporation
  • (if adding any names of directors on invoices) the names of all the directors

If you are VAT registered, you will need to use a VAT invoice, which is an invoice that also includes your VAT registration number.

Selling Between the US and UK

One complicated question is whether you need to apply VAT or sales tax to goods or services sold across the Atlantic.

If you are a US business, you may know what the answer is: it depends. It depends on your state and local government requirements.

For UK citizens selling goods to the US or importing goods from the US, it’s much more cut-and-dry.

Most goods exported to the US from the UK don’t need to have VAT added as long as the proper export documentation is kept.

For goods imported from the US, the UK VAT is usually paid on import.

However, for services performed in the US, there are many different requirements. This is a particularly complex set of rules. For a list of services that require special and general rules, you can visit this informative page here.

These are general differences between US and UK invoices. However, the most important takeaway is to contact your local government authorities to determine what your requirements are.

If you think we’ve missed some important information here, or just to say hi, leave us a comment and let us know!

Freelance Resume – Do I need one?

When setting out as a freelance one thing which is often overlooked is a resume (or Curriculum Vitae, for the Brits!). Those of you going from working full time will more than likely already have a resume from previous job applications but even these will need some fine tuning if you want to attract good clients to your freelance business. As a freelance, your business is all about you as a person and your experience – and they best way to show this off is through a resume.

Work Experience

You’ll want to show that you have a good amount of experience in your field, so keep all your previous work experience from industry related jobs on your resume, but don’t bother with the Summer job you had at a burger restaurant. Having gaps on your resume as freelance won’t be a problem.


Education is an important part of any resume, but again keep it relative, and think about what kind of skill set your clients will be looking for. Higher level qualifications such as Degrees should be included from any subject, but stick to only relevant under-graduate level qualifications.

Work Examples

The most important part of a Freelancers resume is examples of your previous work. You will probably already have a website detailing your work, but also include the best examples on your CV. It may be that a marketing manager finds your website via a search engine but needs to get approval from their boss before hiring you, so will print a selection of resumes to show them before they make a decision. I would stick to four or five of the best examples of your work, and don’t be afraid to use images on colour if relevant.

A few additional benefits of having an online resume:

  • Search engines will pick up on word document of PDF files and will give you additional exposure to your clients
  • They can be downloaded by clients and kept for future reference
  • They show education and relevant previous work experience which is often overlooked when creating a portfolio website

Choosing The Right Name for Your Freelance Business

One of the hardest things to decide when starting out freelancing is what to call yourself. The biggest decision will be if you want to use your own name or setup a trading name. This article will explore the advantages and disadvantages of each, and provide tips on finding a good domain name for your business.

Using your own name

The first and most obvious option when freelancing is to use your own name. A web presence is a necessity for almost everyone who wants to be a successful freelancer, and critical for those in the online design or development industry – so first of all check that you can get a good domain name for yourself. If your name is John Smith you should be looking for domains along the lines of, so that you can be easily found.

If you are looking to be a bit more creative try playing around with country specific domain names – for example Matt Mullenweg (Founding developer of WordPress) uses for his personal website. A freelance writer friend Alastaire Allday uses for his freelance copywriting business ‘Alastaire Allday – Creative Communication’.

You could also try getting your industry name into your domain name and business title – for example a lot of photographers opt to use something along the lines of – this instantly tells your visitors what you do and will help your search engine rankings.

There are a few things to avoid when choosing a good domain name:

  • Avoid hyphenation unless there is no alternative – these make saying your domain name tricky and lead to confusion.
  • Avoid second-level domain extensions such as “” – stick with the extensions your customers will be most familiar with and get the .com if available.
  • Avoid hard to spell words or names – for example if you spell your first name in an unusual way it might be best to stick with your initial and surname so you don’t have to spell out your domain name
  • Make sure your chosen domain name can not be mis-read – the popular could have an entirely different meaning without the hyphen! (Perhaps there is a good reason to hyphenate your domain after all!).

Remember that your will probably be using your domain name as part of your email address too – if your customers can’t easily remember or spell your domain – you could miss a new lead or upset your existing clients if you don’t receive their emails.

Before deciding to use your own name for business, have a search on Google for your own name – there may well be others with the same name as you in your industry – which could cause confusion for both your clients and theirs.

Using a trading name

Many freelancers opt to use a trading name rather than their own name, and there are some good reasons for this – It will make you look like a larger business, and some businesses prefer not to use freelancers, so you may be able to get work in from larger companies. This is specific to your area of work, so do some research within your industry. Look at what others are doing and talk to your potential customers before making a firm decision.

Another advantage of using a trading name is that you may one day want to expand the business into a Limited company, or sell the business on to peruse other ventures. While both of these are possible if you use your own name – using a trading name makes the business seem less personal to your and will make it more attractive to purchasers as they will not have to rebrand.

Consider the following when choosing a trading name for your business:

  • Ensure that a good domain name is available
  • Check to see if anyone else is already using the name you have chosen – a Google search would be a good place to start, or your government should have a list of registered companies (e.g. Companies House if you are in the UK)
  • Although this is not so common on the internet, a lot of offline directories will list companies in alphabetical order – ‘A1 Photography’ will usually be seen before ‘ZX80 Computer Services’
  • Consider appending a description of your services to your company name – look for something which will describe what you do such as ‘XZY Creative’ if you are a designer, or ‘ABC Photographic’ for you photography studio.
  • Location – If your business is location specific and you want to attract clients from your area you may want to include your location in your name – e.g. ‘London Photography’ or ‘New York Design’. Think about what your clients may be searching for when looking for your business, so if you live in a small village go for the name of the nearest large town or City.

Be consistent

Your company name, whatever your choose it to be, will form part of your brand identity – so make sure that whenever it is used it is consistently capitalised and spaced. Also consider how it will look as part of your domain name and if it could be used to form part of your logo.

Think you’ve come up with a good name?

Post up in the comments section and let others know who you are, just make sure you’ve registered the .com before telling too many people about your new idea!

Thinking of Going Freelanace?

Welcome to Going Freelance – A resource site to for freelancers discussing issues relating to freelancing across all industries.

If you are thinking of going freelance or have just started out freelancing check out the articles and resources on this site. We will cover everything from invoicing and accounting to self-motivation and how to best spend your cash!

Before making the switch from 9-5 to freelancing you should ask yourself the following questions:

1. Am I passionate about my work?

If you don’t have a passion for the work you will be doing, you won’t make it freelancing. When freelancing there is no one checking up on you so it’s easy to take time off to enjoy your hobbies or have an extra hour lay in. If you don’t enjoy the work you are doing you won’t be motivated to do it, and won’t be able to run a successful freelance business.

2. Am I willing to work long hours?

A common misconception people have is that working from home will allow them to have lots of time off or not work as hard. This for the most part isn’t true. There are many perks to working for yourself, but there are also lots of times when you will need to stay up all night working on a project for little or no immediate financial return. If you’re not willing to put in the hours you may find that you can’t sustain your business and personal financial needs.

3. Am I good enough at what I do?

There are going to be a lot of competitors when you start out, all of whom will have more experience than you so you will have to gain clients by either being very good at what you do and getting noticed, or undercutting your competitors on price while you built up a client base and reputation.

4. Can I manage the finances?

A big part of working for your self is learning to copy with a massively variable income. There will be months where you invoice out very little and end up with a bill to pay which means you have nothing left to pay yourself, but there will also be months when you finish a large project and take a deposit for a couple of new projects and have more money than you know what to do with! It’s important that you plan and budget your finances and keep something put by for those periods when you are working your hardest but invoicing out relatively little.

Christmas is often a time where you are working hardest to get projects ready for launch in ‘the new year’ and is also a time where most clients feel they don’t have to pay on time as “it’s Christmas”. If you haven’t been putting something aside during the year you may not have the cash spare for all the Christmas related expenses. You also won’t be getting the nice Christmas bonus you may have been used to receiving when working for someone else.

5. What am I bad at?

This may seem a strange one, but it’s important when freelancing to be able to recognise your faults so that you can improve yourself by learning new skills, or outsource some of your workload to others. For example if you know your spelling isn’t great always make sure your run your emails and promotional materials through a spell checker! Or if you’re a top notch designer and a client asks you to produce a leaflet including copy – know when to hire the services of a professional copywriter rather than attempting it yourself. Don’t forget to charge enough to cover your time managing the outsourcing too!

If you’re already freelancing, what kind of questions did you ask yourself before you made the switch?