Throughout my entire first year as a full-time freelancer, I had no idea how much money I was making.
Once, a client called to ask why I hadn’t deposited a cheque for a four figure sum they’d sent me by post. They wanted to do their end-of-year accounts and needed to have proof that the money had been received. Oops. I hadn’t even realised they’d sent it to me, since I hadn’t been tracking my invoices or chasing non-paying clients.
To a salaried employee, that might sound totally crazy, but I’m sure many freelancers can relate. Who’s got time to stare at Excel spreadsheets when you’re not being paid to do it?
It was only after having to file my first tax return that I started paying more attention to the need to keep tabs on my cashflow. Here’s what every freelancer should be doing, no matter what their earnings are like.
Organise templates of your invoices and quotations
In my more disorganised days, each time I had to create an invoice I would wade through my emails until I could find a sample I’d attached somewhere in the abyss. I’d then download it, edit it, convert it into PDF format and send it to the client. What a mess.
You save a lot of time and frustration by keeping templates of your invoices, quotations and receipts organised and within easy reach.
Create versions of each for various situations (eg. one version for local clients and one for overseas clients who will need more detailed payment instructions), as well as separate templates for regular clients you bill frequently
One easy way to do this is to use an application like QuickBooks Self-Employed which lets you easily generate, send and save invoices, even when you’re on the go and relying on nothing but your smartphone. That sure beats trying to organise scores of Microsoft Word templates on your own.
Keep track of your revenue and business expenses
One of the biggest headaches freelancers face is keeping track of how much money is flowing in and out of their business.
This is especially so when your clients pay you by bank transfer. Come on, nobody logs in to their internet banking account every single day. And to make matters worse, many clients insist on making bank transfers without providing details, so trying to figure out who’s paid what is like trying to find a cure for cancer.
Keeping track of your own business expenses can be just as tough. If you’re using the same bank account for your personal and business matters, good luck figuring out whether that $10 you incurred was for buying your client coffee or your own personal pleasure.
If you don’t have an application that tracks your expenses for you, you’ll have to maintain a spreadsheet where you enter by hand every cent earned or spent. Instead of tracking religiously every cent that leaves your wallet, use QuickBooks Self-Employed to track your accounts. The app lets you enter your expenses on the go using your smartphone—it’s as simple as taking a photo of your receipt.
The app also lets you track business and personal expenses separately by simply swiping left or right. For millennials who’re used to swiping left and right on Tinder, doing this will be second nature.
After you take a photo of the receipt with your smartphone, use the app to log and categorise the expense so you no longer have to vomit blood the next time you do your accounts or file your tax return.
This also enables you to maximise your tax deductions and pay less money to IRAS. In the US, QuickBook Self-Employed users make about US$4,340 in tax savings per year.
Maintain a schedule for chasing non-paying clients
Clients are very good at hounding you for deliverables, but when it comes time to pay their invoices, they suddenly vanish into thin air.
Chasing non-paying clients is something every freelancer hates doing. Not only are you not paid for this extra admin work, but failing to obtain that money that’s rightfully yours means you’ve effectively worked for free. I used to only chase clients after discovering that their payment was something like 6 months overdue, and one or twice I discovered the company had folded and I had no way of getting my money back.
The key to chasing clients without getting frustrated is to detach yourself as much as possible from the process by automating the tracking of overdue invoices and then carving out a set time each week for shooting out emails or phone calls to clients. Make it as mechanical as possible so you don’t get triggered.
You basically have two choices. Manually track your clients’ deadlines or use an application like QuickBooks Self-Employed so you can see at a glance when invoices are overdue. Then schedule time in your calendar for sending emails or making phone calls.
QuickBooks Self-Employed – making your life easier
The folks behind QuickBooks Self Employed, Intuit, are small business champions whose goal is to make life easier for entrepreneurial types. They create business and financial management solutions for self-employed folks, small businesses, consumers and accounting professionals.
Their flagship products and services include QuickBooks, with different versions available for self-employed people, small businesses and accountants, as well as TurboTax, which helps small businesses with their tax preparation and tax filing needs.
For freelancers like private tutors, writers, designers, photographers, consultants, programmers, musicians or Grab/Uber drivers, that means not having to waste hours every month grappling with dreaded admin.
QuickBooks Self-Employed costs just a few dollars a month. Their usual price is 9.98 SGD a month, but if you sign up today you get a 50% discount for life, making the subscription only 4.98 SGD.
Getting your own subscription is easy. Just visit their website and then download their application from the app store.
As a freelancer, how do you manage your admin work? Share your tips in the comments!
This article is brought to you in collaboration with QuickBooks.