There's a lot of documentation that goes into a freelance audio project. It's important to get as much of this as possible and to safeguard backups. Let's break it down.
Project bid: Likely this will be the first thing a client asks for. How much do you think you can do the project for? Keep this as a backup, and reference/attach it to contract signing. Other important information on this sheet should be your name, date, title of project, and your contact information.
NDA: This is a form to allow you to see aspects of the project with a promise not to steal that information. Depending on things, this may occur before the bid, if the client wants to show you details about the game before deciding how many sound assets it would take to create the game.
Don't try and push for one, but if they start handing out buckets of design documents before anything's been signed, remind them that you'd be happy to sign an NDA and contract before properly tackling the work.
Contract/Agreement of Work: Lots of other articles are out there to describe how to negotiate a fair contract. Read them. Sign a contract, and remember to get them to sign it and return to you. Keep it safe somewhere! Do not work on a project until a contract is signed.
I cannot stress this enough, except to say it again: do not work on a project until a contract is signed. Make sure it says how much you are getting paid, when, for how much work, due at what point. If clients ever have a question about when something is due, or why haven't you done music theme XYZ and you have no idea what they are talking about but they're angry because they haven't received it yet, a contract is a life saver.
Audio Design Document: Whether they want it or not, it's always good to present an audio design document before working on anything serious. This is a document that both parties should have access to and ability to edit, to hammer out a plan for the audio. In it you should discuss inspirations, such as what types of games and media have similar audio to your project, and the goals, which are what you are trying to get the audio to do in the game. (For example, the music on the forest level will have gentle wind instruments to convey a breezy, carefree atmosphere, coupled with a light ambient soundscape of birdsong and wind.) Try to get this approved before you start building assets, to reduce the amount of revisions and miscommunications between yourself and the client.
Asset Delivery Excel/Document: When you present your work to a client, it should come with either an excel sheet or some sort of document that explains what you are submitting, where it should go in the game (such as what level the music will be playing on, or where the sound should be implemented), and leaves room for additional information. Clients will want to be able to track what's been implemented and where, and if it's been approved or needs a revision.
Invoice: Once everything's approved and the game's ready to ship, we're ready to invoice. This should look a lot like the project bid document, except the assets are clearly defined instead of ballparked. It has all your contact information, as well as the client's, so that both parties can print out and keep for tax purposes. I like to put "Invoice 1" on it, to allow for additional invoices should the client need post-release support. At the very bottom, put something to the effect of, please remit payment with 30 days, thank you for your business. Along with this invoice attachment, in your email describe the best methods of payment, whether it's PayPal, a check to your address, wire transfer, etc.
In the end, the quality of your work speaks volumes. Working freelance audio can be a bit tricky when it comes to balancing a home life, and without a balanced home life it's difficult to create consistently good work. Finding this balance will be full of different challenges, for everybody leads different lives. Some will have children, roommates, strong social lives, second jobs, you name it.
Stay motivated and focused: Working at home comes with a huge amount of distractions. There's the internet, TV, fridge, phone calls, potential family interruptions, chores -- the list goes on. No one is looking over your shoulder making sure you're working, no boss in the other room who can step in at any moment to catch you with Facebook open.
If you're unable to keep yourself motivated on your own work, you're not going to get anything done. If this is a problem, set daily tasks in the morning and make sure they get done before distractions.
Healthy work hours: As a freelancer it's near impossible to turn down work, but worse, it's difficult to set healthy work hours. I used to fret that every moment I wasn't working on my career was wasted time. An in-house audio designer has clearly defined working hours, and when they come home, that's that -- it's time to relax.
The worst part for me were those times without consistent work -- with no tangible income to prove I was working hard, I worked even harder. It got to an unhealthy point where I couldn't enjoy any relaxing time with my family, worrying that instead of playing games I should be career building. That's no life!
The answer for me was to set working hours like a normal person, and respect that when an end of the day came, every moment past that was overtime and beginning to become harmful to my life and family. Of course overtime is definitely part of our business, and most people's, for that matter, but when it's a daily thing, rethink your hours.
Separate work from home: I need a specific office area which is different from a game area or social computer area. As an audio designer, this means a quiet place to do uninterrupted sound work. If necessary, get a sign that says "Recording in Process" or whatever will let people know you'd like to not be disturbed. I like to make sure home bills and items aren't allowed to touch the office desk, because a clear separation from work and home is important to me. My work files don't get mixed up with important home documents. I have no games installed on my work computer – what a disaster that would be! Work time is work time, home time is home time.