Do you use common tools? Do you write your own tools? Do you use MS Excel? Is a single text file enough?
What's the way
Too much more than that would be overkill for my needs. In the <workdir> I have other directories with templates for whatever I need, such as for billing, SOW, payment reminders, etc.
Everything is primarily in markdown for simplicity and ease of conversion. I don't use excel, although my invoices once started that way. Eventually I figured excel isn't meant to be a layout platform, and is not compatible with much of anything else in my workflow, and no I longer use it for anything except sorting and visualizing forensic timelines.
I think the HN way is rarely the best way. The best way is the way that works for your unique scenario. Many people on HN have what I would consider stupid or silly requirements, but I'm sure those people think they are really important.
Similarly, I'm sure many here would say my requirements are silly and can be achieved in a much easier way.
I would suggest you do not use Excel or text files as a CRM. But, you probably don't need SalesForce, either...
There is no one way. I doubt there's even one HN-way (as you call it).
You should consider using a CRM app for your clients. But find one that's not too complex – at the moment, I doubt that you need one that includes everything including a shower and a laser. But if, sometime in the future, you need to add more features then make sure you can add those features when you need to.
For a long time I used a Google Sheets template for tracking work and generating invoices. Print to PDF, email, done. Every client will have their own requirements for reporting your progress and work results, and for invoicing/payment. You will have to conform to their system: send invoices they can process through their receivables system, and accept payment however they can do it. That will mean EFT, wire transfer, PayPal, Square Cash, even paper checks (in the US). You don't want to spend a lot of non-billable time or create friction so stay flexible. Remember your goal: get paid fast. Don't try to train your clients to use your system or pay you in a way that makes you an exception at their end. As "How do you normally receive invoices and pay your other vendors?" and do that.
Likewise every client will have their own mode of communicating. Mine mostly use email, Slack, phone calls, in that order. Some will want you to join their Jira, Basecamp, whatever. Just like with billing and payment, when it comes to communication you want to reduce friction with the client and keep your non-billable time to a minimum. Don't try to force your clients to use your preferred system, file tickets, or impose lots of process on them. If you don't keep communication simple and responsive to the client's needs they will find someone who will.
In 2014 I outsourced the marketing, legal/contracts, and invoicing/billing to an agency. They take 15% of gross but negotiate better rates to make up for it, and keep more of my time billable. You might want to look into that. In business terms that's called "focusing on your core competencies."
Mainly you want to focus your time on billable work and maintaining/enhancing the relationships with your clients. I generally prefer long-term clients who trust me and find me easy to work with. Those clients will refer business to you and give you good word-of-mouth marketing. Part of maintaining a good relationship comes from eliminating friction and potential sources of conflict with the client. Dictating the terms of the relationship to the client and remaining inflexible won't work out long-term.
As for organizing all of the information for a project or client relationship, you will probably need, at minimum, a password manager, ability to search email and Slack threads, and a filing system. I create a folder in Google drive for every client and project and put relevant documents, notes, emails, etc. in there. Google can search the contents of files for me. Sometimes the client has their own system I have to use, but usually they don't and I have to bring some order to their setup.