Money is an important part of doing any business and the reason we all work for, but money is also where many freelancers run into trouble. There are many payment modes a freelancer can use to accept payment from client and manage the cash flow seamlessly. Here are top 10 ways for freelancers to achieve financial success.
1. Get Separate Bank Accounts For Business
While working as a freelancer, do not mix your personal and professional accounts. Get a separate current account, and savings account set up for your business. This will make your accounting, taxes, and legal compliance much easier.
2. Create Payment Links to collect freelancer payment
You can create a payment link to request payments from customers without a website. In other words, you can send payment links to customers through SMS, Whatsapp, email, or social media. The payment link will direct your customers to the payment page to pay using different payment mode – debit card, credit card, UPI, net banking, etc.
Advantages of Using Payment Links for freelancer payment
- Convenient & easy way to collect payment from customers, via a payment link. Customer can make a payment through the smartphone without having any installed mobile applications.
- Multiple payment choices are accessible for the customers in the received payment links, like Credit cards, Debit cards, UPI, QR code, net banking etc.
- Option for saving customer data for regular customers is available, where certain fields are prefilled to speed up the payment.
- As per the study, a payment link has been chosen by 63.5% of freelancer for freelancer payment.
3. Create and send Invoice
Sending a freelance invoice to your client by email or Whatsapp shows your client that you’re professional. It also makes it much easier for them to pay you quickly. While you can always DIY your invoice and send it over as an attachment, there are much easier solutions out there. The best tax and accounting software allows you to create and send invoices via email & WhatsApp in just one click.
For example, using Enalo, you can create and send invoices without any hassle.
4. Send Customer a Payment Reminder
Don’t be shy with payment reminders. There may be hundreds of possible explanations for why your client is not responding to you. If you’ve already emailed an invoice and have received no response, wait for a few days and send an email to confirm that they have received the invoice. You can mail them using very polite language. For example:
I hope you are doing well. I’m emailing to confirm that you received the invoice for (add project name). I sent that last week and wanted to confirm that everything is in order.
As you know, my payment terms are ____ days (whatever you agreed on), and your payment will be due on ___ (enter due date). I hope you will clear your dues on time respecting our payment terms.
Thank you for your time,
So this is the best way of sending a payment reminder to your customer.
5. Interest On Overdue Invoices
If invoices are not taken seriously and you won’t get your dues completed on time, do not forget to use your entitlement to statutory interest and compensation. Whether you impose it or not, is up to you. while dealing with consumers, make sure you put any interest you want to claim in your terms and conditions.
6. Use a credit card
Freelancer should use credit cards for payment of bills and other work-related expenditure. So that it doesn’t create any issue when clients delay freelancer’s payment.
7. Special saving
At certain times of the year, like tax season or when you want to invest in a big project or when you want to do internal reinvestment, you need more cash in hand than normal. As a freelancer or business person, you have the power to adjust payment options to create quick cash infusions by incentivizing specific payment options.
Each year, several clients would request the option to pay for new projects before the end of the year to boost their own expenses. In this case, you can quickly create a cash infusion at the right time, or you can strategically offer a discount if clients pay in full at the start of the project using payment link.
8. Variety Makes The Cash Flow
The key to getting off the income roller coaster and improving cash flow is variety, variety in the type of invoicing, variety in the types of payment mode and payment plans offered, variety in the lengths and types of the projects accepted by the clients.
When you combine variety with a solid, dependable, reliable income base your money stress will practically disappear, and you’ll have the ability to strategically plan ahead.
9. Expand Your Client Base
Unless you have a long-term contract with any client who pays you handsomely, you probably shouldn’t limit yourself to only one project at a time. If a customer flakes on you and they’re your only source of income, you’ll be in a trouble.
I also understand, handling more than one project at a time can be difficult, depending on their complexity. As a freelancer, you’re wholly responsible for managing your own time, so it’s essential to determine how much work you can handle.
To play it safe, you must have at least two sources of income at a given moment. If you have one client whose projects eat up several hours each day, you can work around this by taking on smaller and fast-paying gigs to manage your savings.
10. Accurately record all the income and expense.
It’s extremely important to keep an accurate record of your income and expenses throughout the year. These records are not only required when paying taxes but you also get to see how much you’re earning and how much you’re spending. It’s wise to update your income and expenses record as frequently as you can at least monthly.