Invoicing Clients in Crypto: A How-to Guide for Freelancers

November 5, 2021

Are you a business, or freelancer considering accepting crypto payments? This article will tell you everything you need to start invoicing in crypto.

We’ll look at why you’d want to accept crypto payments, how to receive them, how to send a crypto invoice, and some important things to be aware of.

By the end of this article, you should have all the processes and tools in place to start accepting crypto payments.

Why accept crypto payments?

There are good reasons to accept crypto payment. Chances are, you have already had clients who have asked to pay in crypto. 

For one, you can get paid almost instantly, from clients anywhere in the world without high foreign exchange conversion fees, or bank wire fees. While some cryptocurrencies can incur transaction fees, they are generally far lower than what banks, or card processing companies typically charge.

Another important reason to accept crypto payments is the growing number of crypto-native clients. There are a lot of crypto-native companies looking to hire freelancers, and service providers. These companies often have big budgets and will pay you a premium. However, they prefer to work with companies and freelancers willing to accept payment in cryptocurrencies.

Last but not least is that crypto provides you with superior returns on your liquid cash holdings. Margin lending, staking, and other yield-farming options allow you to generate interest rates of 2-3 times what bank deposit rates offer for holding your business’ cash reserves. 

Simplify crypto payments for your business today

How to accept crypto payments

All you need to get started is a crypto wallet. Your wallet will have a unique deposit address you can share with your clients. Different cryptocurrencies use different wallets. The best wallet is going to depend on the crypto you want to be paid in. To learn more about which type of wallets to use, check out this handy comparison of the best crypto wallets available.

Having full control of your own wallet is the safest way to accept crypto payments. However, if you’re new to crypto,  you can start by using an exchange wallet such as Binance or Coinbase for convenience. This lets you generate deposit addresses for any popular cryptocurrency. Once the crypto is in your account, it’s simple to cash out, or trade for other crypto assets.

How to send a crypto invoice

Once you have a deposit address on an exchange or a crypto wallet, you can invoice your client with the wallet address listed, in place of where bank details might normally be. 

The most basic method is by email. 

1. Copy and paste your wallet’s deposit address into your invoice

2. Send the invoice to your client along with the amount owed 

3. Your client opens their wallet

4. They copy and paste your deposit address and send the amount owed

5. Once they reply your email to confirm they’ve made the crypto payment, you must check the relevant blockchain explorer to confirm that the payment has been settled.

This can be confusing, and highly prone to administrative errors. Remember, transactions on the blockchain cannot be reversed, or charged back. It’s far too easy for an admin staff to make a typo, draining your company’s crypto assets irreversibly.

Luckily, there’s a better way...

Introducing Request Finance

With Request Finance you can send a professional crypto invoice in just 8 seconds. The 1-click payment makes it easy for your client to pay, and for you to monitor the payment status of the invoices you send. Payment confirmation is verified via the blockchain so no one needs to send follow-up emails. Your accountant will love it too as they’re fully compliant with accounting tools like Xero.

What really makes it stand out compared with other invoicing solutions, is that Request Finance offers cross-currency support. This means you can issue invoices in the currency your client prefers (e.g. USD) and get paid in any crypto you’d like (e.g. ETH). This makes things easier for everyone. You know exactly how much you’re getting paid and it simplifies your taxes.

Request Finance in action.


Important considerations when getting paid in crypto

Good work. Your crypto invoice is sent and your client has paid you. What’s next? While crypto has its benefits, there are other considerations to consider in accepting crypto payments.

Taxation

Your country of residence plays a huge role in how much tax you need to pay. Firstly you need to calculate your income tax. To do this you’ll need to work out exactly how much you earned in your local currency. If you’ve used Request Finance then it’s easy – everything’s recorded so you can treat it as foreign income. Plus, with Request Finance you should have denominated your crypto invoices in your local currency like USD or EUR in order to simplify your crypto accounting without having to do the manual currency exchange yourself.

You also need to be aware of the capital gains tax policy in your country. Let’s imagine you receive a payment of ETH worth $100. Now, if the value of ETH goes up, your $100 will have appreciated. Capital gains tax is paid on this added value. The policies vary wildly across countries – some charge 0%, others as much as 42% depending on your gains.

Converting crypto to fiat money

Most shops don’t currently accept crypto payments, so you’ll need to consider your off-ramp. This is how you change your cryptocurrency into money you can spend in a local shop.

The first step is that it needs to be in an exchange. If you received the payment into a personal wallet you’ll need to transfer it before going further – this will incur a transaction fee which is why we recommend getting paid directly to the exchange.

When your crypto is in the exchange it’s time to trade it for your local currency. Withdrawing it to your bank varies in difficulty. In some countries, it’s as easy as clicking a button. However, some banks hold an anti-crypto stance and won’t let you directly withdraw the money. There are workarounds for this, but they’re country-specific.

If you’re a freelancer looking to maximize your earnings, perhaps it’s worth considering the digital nomad lifestyle? Some countries make crypto for business and freelancers very attractive. Check out our top 8 crypto-friendly countries for freelancers.

Transaction fees

The last thing you need to think about is transaction fees. When you receive crypto from a client, they pay a small percentage as a fee for updating the blockchain. The percentage varies depending on the cryptocurrency. These are known as ‘gas fees’ – they typically get paid to the miners who keep the network running.

If you’re using Request Finance there’s a small additional fee your client has to pay. It’s 0.1% of the total transaction and is capped at $2. This means a $100 invoice would have a transaction fee of $0.10. An invoice of $50,000 would pay a $2 transaction fee due to the cap. Compare us with Paypal to see why freelancers love Request Finance.

Based on the US PayPal fees of 3.49% + $0.49 per invoice

Final thoughts

Crypto for business is gaining traction and smart businesses and freelancers are positioning themselves to benefit from it. We’ve shared why you should start accepting crypto payments, how you can receive them, and the easy way to send and manage crypto invoices with your clients.

Request Finance takes the hassle out of billing your clients. It lets you create fully compliant, professional invoices in seconds. You save time, get access to better clients, and avoid high transaction fees.

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