Working as a freelancer has benefits and negatives. A good portion of the difficulties that freelancers have is balancing out their funds. There are slow periods for every freelancing niche, including writing. It is important to plan for those periods accordingly financially and have other types of work to supplement the lowered income during those times. A few other things that freelancers need to know about money are discussed below.
It is perfectly acceptable to require private clientele to pay deposits. This should be at least 60-percent of the project’s total cost. When quoting the work, it should always be done so with the deposit being enough funding to suffice the amount of work being completed. Unless you have a contract with a client, getting them to pay once you hand over the work can be a challenge, so take the deposits and make it a requirement for any non-platform customer.
PayPal does charge a small fee, which is a percentage of 2.9-percent plus $0.30USD on every payment received via invoice. The ideal way to recover these fees is to charge a general 3-percent invoicing fee. The fees are tax deductible, but it is difficult to go through every transaction when you send hundreds of invoices per year to tally up all of them.
While there are other invoicing systems available, they also have fees associated with them and PayPal will still take the aforementioned fees. You can suggest that your clients send funds directly to you as if they were sending money to a friend or family member. This allows you to avoid the fees and not have to charge clients extra so that your income stays the same.
Keep a document that has all of your pay dates and scheduled payments in it. When you have concrete dates it helps you stay on top of clients that are late or simply do not pay. Staying on top of invoicing and when you are supposed to be paid is absolutely crucial.
As a freelancer, you do have the right to send warning notifications to clients that have signed agreements to pay for services rendered. You have the right to send collection notices and take legal action for non-payment just as any other business does.
Balance Paydays with Bill Payment Dates
It is rare that all of your bills will be due at the same time. The thing about being a freelancer is that paydays don’t always coincide with when bills are due. Sometimes there are no paydays in the middle of the month. What you’ll need to do here is plan and budget accordingly. Consider using QuickBooks or Google Spreadsheets with reminders. These two programs do help freelancers stay on top of their finances and payments.
When you are aware of payment schedules, it allows freelancers to find filler work so that there is still income during dry spells. Having multiple eggs in your basket is ideal, because as a freelancer, you really can never have too much work.
Diligence with your money is a must when you work as a freelancer. Of course you are going to have regular clients, but their volumes and needs can change at the drop of a hat. This can leave a big void in your income. When you have other opportunities and platforms to find work on, you can maintain a steady flow of income when regular clients have their needs met. This is also the ideal time to do some marketing and pick up new, higher paying clients that more than fill the void.