If you’re a freelancer, chances are a good portion of your time is spent on monetary tasks, like checking up on invoices and determining your rate for different clients and projects. Yup, without an accounting department, you’re running the show. And if you’re just breaking into freelancing, this might seem a little overwhelming at first. So to help, here is our best advice to you on all things money.
1. Prepare for the Initial Lull
If you’re making the move from full-timer to freelancer, it’s going to take a bit of time until you start to see a steady flow of income. In our article Biggest Mistakes of Now-Successful Freelancers, Brooklyn–based writer Noah Davis says he had imagined a four to six month ramp-up period would be enough time to have the checks rolling in. Turns out, it took him closer to eight months. The lesson here? Save big before you make the dive into freelancing, or make it your side hustle until you’re more established.
2. Get Organized
It can be easy to forget about a past-due invoice if you don’t have a system in place. While there are many programs and sites out there to help organize and track your invoices and payments, a good old-fashioned spreadsheet might be your best bet. Essayist and blogger Jodi Doff says in our article, The Beginner’s Guide to Freelancing, she uses a Google Drive Sheet to keep track of all her payments.
3. Hire a Subcontractor
When you’re scaling up business, sometimes it can help to hire a subcontractor to handle certain tasks, as this can open you up to take on a larger client load. In our article, Why Hiring a Subcontractor Could Make Your Freelance Biz More Profitable, the author says a contractor can be used for many tasks including transcriptions, proofreading, administration tasks and even writing.
4. Plan for Tax Season
If you’re new to freelancing, you’ll quickly learn that taxes work differently when you’re working for yourself. One of the biggest tips—as explained in Tax Tips for Freelance Writers—is to save money for taxes, as you’ll likely owe this year. And if you’ll be making over a grand in earnings, then you’ll also want to consider quarterly estimated taxes to avoid a penalty—also explained in the article.
5. Make Sure You Get Paid
It’s happened to the best of us, we turn in stellar work only to wait months for a paycheck. While there will always be a difficult client—or difficult accounting teams—that can slow down or halt the process of you getting paid, there are steps you can take to avoid these situations from the beginning. The number one piece of advice from our article How Freelancers Can Avoid Not Getting Paid, is get everything in writing before you start.