There can be many traps you can fall into when you’re a freelancer – whether it be problems invoicing, or issues with money transfer – you need to ensure that your keeping on top of things. Keeping on top of things isn’t just important for yourself (and making sure your money is safe) but it’s also important in terms of securing future contracts. After all, no one wants to work with someone who is careless with money.
1. Be careful of tax
Also ensure you put money aside for tax returns, and always ensure you hand in your tax returns on time. It sounds obvious – but you’d be surprised how many people leave their taxes until the last minute and then either get fined – or suffer a night of untold stress! Keep a separate bank account for your taxes and keep that money safe for when it comes time to declare it.
2. Hire an accountant
Hiring an account on a freelance basis, to keep tabs on your incomings and outgoings is a great idea. You might only want to sign them up for a couple of hours work a week – but even this is better than nothing. Ask them to run through your accounts – ask them to check for any anomalies and any mistakes they might highlight. Getting a professional to keep tabs on your finances is just common sense!
3. Use secure transactions
Make sure you get paid using trusted methods. Using an online transaction service is a good idea because they are usually immediate payments and they’re usually quick and easy to manage. World Pay is a good place to start, as they’re trusted and secure. You can do account transfers, credit card processing and international transfer too through companies like this — and it means all your transactions are recorded too – which is great at the end of the month too when you’re tracking transactions.
4. Ask for money up-front or secure a deposit
This is a lesson that many freelancers learn the hard way. Always ask for a deposit or an upfront payment when you secure a contract for work. Imagine all the time and effort you’ll be investing in the work – and you’ll understand why you should at least secure some of the payment before you get working. It also means your cash flow is more regular too – and you’re not waiting on a particular payment to pay your bills.
5. Be clear about the work and the time-scale
If you charge by the hour then you need to be clear with the employer how many hours you foresee the project taking. You don’t want to invoice for 10 hours and then end up taking 15-20. This not only means you’re billing them more than they expected (which they may not have budgeted for) but it also means you’re putting them in an uncomfortable position too. You want the whole process to be seamless and smooth – so that they’ll want to work with you in the future.