Even if it does sometimes still feel like all my friends work in banks (especially when I’m at Raffles Place and surrounded by people wearing G2000), that’s not really true anymore.
The reality is that more and more Singaporeans are turning to freelancing as full-time work gets less and less attractive. People are trading in their office shirts for FBT shorts as they set up shop at home, working remotely to design graphics, write articles, manage projects and teach restless tuition kids.
At the start, when you have a grand total of one client, and that client is your mum, you don’t need to worry too much about keeping track of your finances. You’ll be able to get away with using the power of your memory and the Stickies app on your Macbook.
But as you grow as a freelancer, you most definitely need to find a way to organise your finances properly. Not doing so means you lose money by forgetting to chase non-paying clients and having no idea how much money you’re earning.
In my first year as a full-time freelancer, I was a complete mess in terms of organising my finances. It took me ages to invoice my clients for work done, and I never really managed to keep track of of who had paid me. Sometimes I chased clients for payment a year after I had sent them the invoice.
One day, a client called me saying they had sent me a check for a large sum over 6 months ago, and asked why I hadn’t deposited it. They were being audited for tax purposes and needed to account for all their expenses. If they hadn’t reminded me, I would have lost that money. Right after that, I decided to get my act together and my life has been a lot better since. Here’s what I highly recommend all freelances do, no matter what their trade.
Keep a spreadsheet and track all your earnings and expenses
The secret to stress-free management of finances lies in the humble spreadsheet. Create an Excel spreadsheet, put it in your Google Drive and use it to track all your earnings and expenses.
I like to colour-code mine according to month. All even-numbered months are yellow, while all odd-numbered months are green. That enables you to get an overview of each month at a glance instead of swimming through a bunch of identical looking cells.
Each time you receive a new brief or assignment, you enter the project into the spreadsheet. You then update the spreadsheet according to when you finished the work, when you issued the invoice and when the client paid you.
The columns on my spreadsheet look like this:
Date of Brief | Client | Project name | Price | Date completed | Invoice date/details | Date paid
Seriously guys, the spreadsheet changed my life. If admin work stresses you out, I highly recommend getting organised. Nowadays I’m never late with my invoicing just because I feel like I’m on top of things.
Put all your templates for invoices and receipts in Google Docs
The only nice thing about invoicing is the fact that without it, you wouldn’t receive any money. Otherwise, it can be a pretty soul crushing activity. I used to always procrastinate when I had to issue invoices because I hate admin work, and never followed up with late-paying clients until they they had completely forgotten who I was.
Other than tracking your invoicing with your spreadsheet, one very useful thing to do is to organise all the different versions of your invoice templates and then place them in Google docs.
I like to keep a different template for each of my regular clients, just because I don’t like having to type in their business names and contact details over and over. Some companies will ask you to bill their parent company instead of them, or insist you get the Pte Ltd in their name just right. Saving this info in your templates just removes so much time wastage. Some clients pay in different currencies while others accept different payment modes, and nobody has time to remember all of that.
If you issue receipts or other documents, again put all of it into Google Docs, adding separate files for each major client.
Of course, if you’re dealing with huge volumes of invoicing, you should probably invest in some kind of accounting software. But for most work-from-home freelancers, the main thing is to stay organised and reduce the time you need to spend on accounting wherever possible.
Designate one day a week for invoicing and/or chasing clients for money
Invoicing and hounding non-paying clients is annoying, because these technically aren’t income-generating activities. But every freelancer is going to have to go through this at some point in time. So it’s best that you find a way to schedule such admin into your day or week.
Nowadays, I usually invoice clients immediately after the project is completed, just because I want to get paid faster and update my little spreadsheet. But if you find that too troublesome, you’ll want to pencil out a slot in your timetable once or twice a week when you get all your invoicing done at once. It’s faster than having to dig up your templates multiple times a week.
The same goes for chasing clients for money. Even though you can track on your spreadsheet when all the invoices were sent out, it’s just too much work going through it every day to see who hasn’t paid by the deadline.
It’s must faster to just allocate, say, the 2 to 3pm slot every Monday to chasing non-paying clients and generating any invoices you’ve neglected to send out. Having a set time for all this admin stuff also helps you to avoid the situation where you suddenly realise a particular client hasn’t paid you for a project you completed in the Jurassic era.
As a freelancer, how do you organise your finances? Tell us in the comments!