Receiving Payments and Invoicing

1. The easiest way (in my opinion) is paypal. You can send an invoice or you can apply for a virtual terminal where you'll be able to accept credit cards over the phone. I believe it takes about 2 days for them to approve a virtual terminal account. You don't have to have a business account with paypal to send invoices via email.

2. The invoice is pretty much their receipt after it's paid. You could send a Thank You email after payment letting them know their payment was received. Paypal allows you to put your company logo on your invoices also.

3.I don't use contracts

Check out freshbooks.com

I personally dont like Paypal, but freshbooks lets you do everything and integrate it with paypal.

1) Paypal. I setup a sole proprietorship in New York ($35) and then opened up a TD Bank account (free). Then linked that account to my Paypal account. It looks more professional.

2) Check inovicebubble. Just google it. Free and it's awesome! You can pop your logo in their invoices.

3) Simple contract with what you doing, dates and both parties names/signatures. They can either sign it or send it to them in an email and simple have them reply with, "I accept the contract." That way there is a paper trail if it comes down to a legal thing.

I didn't use contracts for a few websites I built and it was a mess. Some clients will try to get all they can but if it's in writing then you're safe. If they want more then you send them a bill.

I agree with what has been said.

1. PayPal invoice - tell the client that's how you accepts credit cards. they don't have to have a paypal account to pay you.
2. You can accept checks made out to your company name or your name, really depends on what type of business your are targeting. Lawyers will want a corporation name, Wedding photographers may not care so much.
3. another way to accept checks is to purchase check writing software that allows you to create bank drafts. This way you tell the client to fax the check to you. Once you get it, create a bank draft, clears in 2 days max.

The great thing about checks are if the client ends up being a psycho, they can't dispute a check.

Just my 2 cents

I'm guessing from your question that you're just getting started... The best policy in that case is KISS - Keep It Short & Simple. Prove your business profitable and then worry about the details. You'll also then have more money to spend on such tools. Try not to let these logistics get in the way of launching your business and making some quick money up-front. That said...

1) There are many simple options for invoicing and receiving payment. Microsoft Word or Xcel (or Google Docs) can create invoices. Start out as a sole proprietor (KISS again) and have the checks made out to your personal name.

PayPal is a great option - especially at the beginning. It alleviates the immediate need for a checking account. But for tax purposes, you'd want to get an account reasonably soon - just to more easily track income/expenses, etc. As a self-employed individual in the U.S. you really should get a business account - even if it's just an alternate personal account. You want to create a "separation of funds" in accounting-speak. And you have to pay quarterly taxes, etc. I'm not sure how all that translates to the UK.

2) Most businesses are fine with generic receipts - they mainly need a record of the expenses for accounting/tax purposes. There may be an "image" issue at first, but by this point you've already sold them. You can get fancier solutions in place down the road.

3) Here again contracts can create a professional image - as well as offer some protection for the deal. But deals are done without contracts every day - you just need some kind of document that spells out the services to be performed for the price paid, etc. If your client will become privy to proprietary information you may want a non-disclosure form. There are many sources for getting good contracts that typically cost less than a lawyer would charge. (Check out Maria Gudelis - would likely work for UK as well, but I'm no lawyer.)

I agree with Justin - Freshbooks works and is great for creating estimates, integrates Paypal or any other merchant provider, sends your clients invoices monthly for recurring billing and is super simple.

One of the other features I like about it is a simple reporting feature to look at your clients payments, invoices, outstanding invoices and much more.