The Do’s & Don’ts of Getting Paid as a Freelancer

June 5, 2015

herdingcats

When people ask me why I don’t freelance full-time, I don’t always give them the same answer. Sometimes I say that while I love working on projects independently from start to finish and collaborating with some amazing clients (shoutout to my friends at Northern Lineage and Natasha Gillam!) I also really love my job (have you signed up for Vendeve yet? Don’t make me ask again. Sign up now or cry later). Other times, I tell them it’s because while I’m excellent at the creative side of my business, I am absolute garbage sometimes at the accounting/management side.

When the team at Freshbooks reached out to me to write a blog post on the ups and downs of freelancer invoicing, I jumped at the chance. I’ve definitely made my share of mistakes getting started with invoicing and managing projects and I’m pretty excited to share my blunders with you all so that you don’t do some of the dumb things I did.

So here we go, everyone loves some good ol’ “do’s and don’ts” so here are the Do’s and Don’ts of Freelance Invoicing

Do: Track Your Time

When I was first starting out as a freelancer, I tried to make really generous estimates so that I wouldn’t end up going over my time and having to do free work for a client. Smart! However, what I failed to do was properly keep track of my time. So I never knew if my original estimate was accurate and I just kept ballparking figures for about a year that we’re ultimately too low. Now, I use a great little app called Toggl that is free and helps me easily keep track of my ongoing side projects. You can also track your time directly in Freshbooks so that you can pull your billable hours straight into your invoice. Easy!

Do: Use an Accounting Software

True story: for the first year I was freelancing I created all my invoices in InDesign and added them up manually when tallying items and when I did my year end. They looked pretty, but that’s about it. It was tedious and annoying and since moving to a cloud accounting software my life has been way easier.

I like using Wave Apps, because I really like the way they’ve designed their interface to be simple and to the point: create an estimate, send it directly to the client, convert said estimate into an invoice and send to client, then get paid and send your client a receipt. Super smooth. It’s perfect for my needs as a part-time freelancer who isn’t doing a ton of billing.

I’ve also recently started testing out Freshbooks and so far, I love it. I literally signed up for the free trial and within 5 minutes I had created my first invoice. It was beyond easy and way more intuitive than other clunky desktop accounting software or excel spreadsheets that I tried in the past to use to manage my books. It’s also a mobile app so you can do your accounting while you’re on the bus, if that’s your thing. If I was freelancing full-time, I’d 100% move to Freshbooks: their time-tracking and reporting features seem like they would be really valuable to me.

Don’t: Be Afraid to Ask Your Clients to Pay Up

When you use a software like Freshbooks or Wave it’s really easy to see when something is overdue. When I first started freelancing just out of university, I always used to assume that people were way busier than me and that was why they hadn’t paid me yet. That was silly. When people agree to work with you and you send them an invoice, they know they have to pay you. Sometimes people forget and you have to remind them and that’s totally okay because we’re all human beings. But sometimes people avoid you because they’re sneaky and then you have to just bug them until they pony up.

Do: Make Sure You Know How You’re Being Paid

Etransfer? Cheque? Paypal? If you’re using Paypal for your client’s convenience, it’s a good idea to puff up your estimate because you’ll get dinged with transaction fees by Paypal, and that’s no fun. Also, be wary of wire transfers. They sometimes require you going to your bank, getting a swift/bcc code and waiting an extraordinarily long time to get paid. I’ve only dealt with receiving a wire transfer once and that was my experience, at least, so I’m going to try to avoid it from now on.

Don’t: Try to Be A Hero and Do Your Own Taxes

In 2014 I spent a whole day agonizing over my 2013 taxes and thought I had to pay $200.00. Two months later I received a cheque from the CRA stating that I had done my taxes entirely wrong and so they did them for me. I mean, that’s a pretty happy ending, but it could have gone the other way. This year I had a professional do my taxes as 2014 was a roller coaster year in terms of employment and it was also my highest earning freelance year. Plus, I had oodles of expenses that were business receipts. I hired someone to take care of it and I saved a bunch of money in the process. Lesson: if you’re the type of person who enjoys doing your taxes (you sick freak), by all means do them yourself. If you would rather be taking a nap (like me), then pay someone else.

In the end, what I’ve always loved the most about doing freelance work is being in complete control of a project.

When I used to work at an agency, messages would get passed from the client, to the account manager, to the creative director, and then to another art director, then maybe to a copywriter, until finally it was time for me to design something. As a freelance designer, I’m in it from idea conception until the finished product. It’s so rewarding to see freelance work out in the wild and being able to choose my clients. It’s even more awesome when the “businessy” side of your business is streamlined and doesn’t get in the way of doing what you love most.

How do you manage the money side of your freelance business? I’m always looking to try new ways of doing it, so share in the comments if you’ve found a tool that you love so much you just gotta share it with the world.

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