Send the invoice, and know the numbers behind it

An invoice is a payment instruction, not a receipt. Anything that forces the person in accounts payable to email you a question adds a week to your payment date, so a complete invoice carries seven things: a unique sequential invoice number, your legal or trading name with contact details, the client's name and billing address, the issue date and a due date, an itemised description of what was delivered, the tax treatment shown as its own line, and unambiguous payment instructions in the currency you expect to be paid in. If you are registered for sales tax, VAT or GST, your registration number belongs on the document too - in most jurisdictions the client cannot reclaim the tax without it.

Number invoices sequentially and never reuse or skip a number. Gaps are the first thing an auditor asks about, and duplicates make reconciliation impossible once you have more than a handful of clients. A scheme like INV-2026-0001 sorts correctly, survives a year boundary and tells you at a glance which tax year a document belongs to. On dates: the issue date starts the clock and the due date ends it. Net 30 is a habit inherited from large corporates. Freelancers and small studios are usually better served by Net 14 or Net 7, and writing the actual calendar date rather than the phrase removes the argument entirely.

Everything you type here stays in your browser. There is no account, no upload and no server-side copy: the form state is held in React and mirrored into localStorage so a refresh, a crashed tab or a closed laptop does not cost you the draft. Your logo is read with the FileReader API and stored as a base64 data URL in the same record. Clearing the draft removes that record; clearing your browser data removes it too, so download the PDF as soon as you are happy with it.

The PDF itself is drawn as vector content rather than screenshotted. Tools built on html2canvas or html2pdf.js rasterise the DOM, which is why they clip descenders, collapse flex layouts and produce a 3 MB image of a page that cannot be searched or copied. This generator composes the document from real text and rectangles, so the output is a few dozen kilobytes, stays crisp at 400% zoom, is selectable by the client's accounting software and imports cleanly into Xero, QuickBooks or FreeAgent.

Margin and markup describe the same gap between what a job costs you and what you charge for it - they just divide that gap by different numbers. Gross margin expresses profit as a share of the price the client pays. Markup expresses the same profit as a share of what the work cost you. That distinction is not academic: a 50% markup is only a 33.3% margin, and hitting a 50% margin requires a 100% markup. If you quoted on a 20% markup and then agreed to knock 20% off the price, you did not halve your profit - you removed it entirely and paid for the privilege of doing the work.

Cost, in the first field, means everything you would not have spent if this project had not existed: subcontractor and freelancer invoices, stock assets, a plugin or font licence bought for this build, print or fabrication, hardware resold to the client, and payment-processing fees on the amount you collect. Overheads is a separate field on purpose, and it is what makes the net figures meaningful: software subscriptions, rent, insurance, professional indemnity, accounting fees, equipment depreciation, and the unbillable hours you spend writing proposals and chasing payments. Gross margin tells you whether the job was priced correctly. Net margin tells you whether the business works.

Treat the output as a pricing floor rather than a score. Pure service work with no resale component commonly runs at 50-70% gross margin because the main input is your own time. Studios that pass through media spend, print or hardware sit far lower, since the pass-through inflates revenue and cost by the same amount and compresses the percentage without making the business any worse. Productised services land in between. The number that matters is the trend across your own quotes: if realised margin falls every time you win a competitive bid, your estimates are too optimistic rather than your rate too low.

Two habits keep the figure honest. First, price forward from the margin you need instead of marking up the cost you incurred - divide cost by (1 - target margin), never multiply by (1 + target margin). Second, re-run the calculation after delivery with the hours you actually spent. The gap between quoted margin and delivered margin is the single most useful number a small studio can track, because it is the one that tells you which kind of project to stop taking.

The most expensive piece of arithmetic in small-business bookkeeping is subtracting a tax rate from a gross figure. Take 20% off 1,200 and you get 960 - which is wrong. The 1,200 already contains the tax, so the net figure is 1,200 / 1.20 = 1,000 and the tax is 200, not 240. The error is 4% of the invoice, it points the wrong way for you, and it repeats on every receipt you process by hand. Tax exclusive means the rate is added on top of a net price. Tax inclusive means the rate is already inside the number you are looking at and has to be extracted with division.

Which mode you need depends on who is reading the price. Business-to-business quotes are conventionally exclusive: the client reclaims the tax, so the net figure is the one they compare against competitors. Consumer-facing prices are usually inclusive, because in most of the world it is the total a shopper pays that must be displayed. Expense claims and supplier receipts are always an extraction problem - you hold a gross total and need the tax component to reclaim it. Switching mode in this calculator keeps the rate and re-derives the other two numbers, so you can see both readings of the same price side by side.

The preset rates cover the bands most freelancers meet. 5% is the standard rate across much of the Gulf, the reduced UK VAT rate on domestic energy, and a common lower GST slab in India and Canada. 10% is GST in Australia and consumption tax in Japan. 18% is the middle standard slab of Indian GST. 20% is standard VAT in the UK and France. If your rate is not listed, Custom accepts any figure including fractional rates such as 7.5% or 13.5%.

On rounding: this calculator rounds the tax amount to two decimals once, against the base you enter. Accounting systems differ on whether they round per line or per invoice, which is why a total assembled by hand can disagree with software by a penny or two. Neither is wrong, but pick one and stay consistent, because your ledger and your invoices need to reconcile. Finally, none of this decides whether you should be charging tax at all - registration thresholds, place-of-supply rules, reverse charge on cross-border B2B services and zero-rated exports all change the answer.

Late payment interest comes in two shapes. Simple interest charges the same amount every day against the original balance: the daily rate multiplied by the principal, multiplied by the number of days. Compound interest adds each day's charge to the balance so tomorrow's interest is calculated on a slightly larger number. Over the timescales freelancers deal with - thirty to ninety days - the difference is small, usually under a percent of the total, but it matters that you can say which one your contract specifies. This estimator computes both from the same inputs so you can see the gap before you write the clause.

Rates are quoted in three different ways and mixing them up is where the real errors live. An annual percentage rate has to be divided by 365 to get a daily rate; a monthly rate such as the common 1.5% per month is divided by 30; a daily rate is used as entered. Choose the basis in the calculator and it converts for you. Some commercial contracts and older bank agreements use a 360-day year, which makes the daily rate marginally higher - if your agreement says 360, note that this tool uses 365.

Two other inputs change the answer. A grace period is the number of days after the due date during which no interest accrues, which is worth writing into a contract because it removes the argument about postal and bank delays. A flat administrative fee is charged once, on top of interest, to cover the cost of chasing - several jurisdictions provide for exactly this. The estimator subtracts the grace period from the days overdue before charging anything, so a seven-day grace on a forty-five-day delay bills thirty-eight days.

What you may charge is a legal question with local answers. The UK's Late Payment of Commercial Debts (Interest) Act 1998 provides a statutory rate of 8% above the Bank of England base rate plus fixed compensation of 40 to 100 pounds depending on the debt size. EU Directive 2011/7 sets a floor of eight percentage points above the reference rate with a minimum 40 euro of recovery costs. US practice is governed state by state, where 1 to 1.5% per month is common and usury caps apply. In every case the right to charge is far easier to enforce when the rate, the basis and the grace period were stated on the invoice and in the signed agreement before the work started.

In practice, interest is leverage rather than income. A workable escalation ladder is a polite reminder the day after the due date, a statement of account at day seven, a formal notice at day fourteen that quotes the clause and the accruing daily amount, and a pause on further work at day thirty. Most invoices settle at the point the client sees a number that grows every day.