How to get paid as a freelancer: Everything you need to know
As a freelancer, getting paid is essential. But sometimes, getting clients to pay on time or at all can be challenging. In this article, we will discuss simple steps that will help you get paid as a freelancer. We will also cover how to accept payments and some tips for avoiding late payments for freelancer.
What is an invoice
An invoice is a document that businesses, freelancers, or contractors send to their customers to request payment for goods or services rendered. It typically includes details such as the quantity and price of the goods or services provided, the date of the transaction, the customer’s contact information, and instructions for making a payment.
3 primary invoice types and their specific purpose
- Purchase invoice: Used to track purchases made by a business. Typically includes the date of purchase, name and contact information of the supplier, description of the goods or services purchased, and the total amount due.
- Sales invoice: Used to track sales made by a business. Typically includes the date of sale, name and contact information of the customer, description of the goods or services sold, and the total amount due.
- Service invoice: Used to track services rendered by a business. Typically includes the date of service, name and contact information of the customer, description of the services rendered, and the total amount due.
Different invoicing/accounting software and their benefits:
1.- Wave is a great invoicing software for freelancer and small businesses. Wave offers many features, including tracking expenses, creating estimates and proposals, and managing payments.
2.-FreshBooks is another popular option for invoicing and accounting software. It’s simple to use and has a wide range of features, including the ability to track time, create invoices, and accept online payments.
3.- QuickBooks is a widely used accounting software that offers a range of features for businesses of all sizes. QuickBooks can track income and expenses, create invoices and estimates, manage inventory, and run reports.
4.-Zoho Invoice is a simple and easy-to-use invoicing software. It offers creating and sending invoices, tracking payments, and managing expenses. Zoho also has a very user-friendly interface, so it’s an excellent place to start if you’re new to this type of software.
Selecting the appropriate invoicing software for your business hinges on various factors, such as the size of your business, the features required, and your budget. QuickBooks could be preferable if you require more advanced features, while Zoho Invoice might be the optimal choice if you seek a straightforward and user-friendly invoicing software.
Invoicing and payments
Knowing how to create invoices and collect payments is essential to running a small business here’s a guide on how the layout of your invoice should look:
What to include in an invoice header:
For the invoice header, include:
– Your name or your business’s name
– Your contact information (phone number, email address, mailing address)
– The date
– Your client’s name
– Your client’s contact information (phone number, email address, mailing address)
– The client’s account number (if they have one)
Within the invoice body, make sure to include:
– A description of the work you did
– The date of the work
– The number of hours you worked (if applicable)
– A price breakdown to show the services you completed and how much they cost
For the invoice footer, remember to add:
– Your payment terms (when you expect payment)
– Total amount due
– Payment options (methods customers can use to pay you)
– Your bank account details (for direct deposit or wire transfers)
– Any other relevant information (like your tax number or company registration number)
– A thank you message
There are Different ways to get paid
A bank transfer is when you receive money directly from a client into your bank account. Bank transfers are also efficient and quick.
Cash app is another popular option for receiving payments. With Cash App, you can either have the money deposited into your bank account or sent directly to your debit card.
Accept Credit Cards:
Another option for receiving payment is to accept credit cards. Freelancers can do this using online payment processing systems such as PayPal or Stripe. However, there is typically a small fee associated with this payment method.
A wire transfer is similar to a bank transfer, but this payment method is primarily used for international payments.
Alternative ways to bill clients.
If you’re starting your freelance career paying for invoice/accounting software might not be in your budget. Therefore, we’ve listed some alternative payment methods that may be a better option for you:
Bill through email:
You can also send invoices to clients directly through email. If you want to make it easy for your clients to pay, you can include a link to an online payment service (e.g., PayPal) in your email. This way, they can click the link and make a payment.
Use freelance platforms:
Utilize freelance platforms such as Handyhubb or Fiverr, where you create a freelance listing, and the platform automatically bills the client when they order your services.
Tips To Help You Get Paid on Time as a Freelancer
No one enjoys working for free, especially freelancers. Unfortunately, many self-employed workers face late payments as a reality.
According to the Freelancers Union, 70% of freelancers have experienced difficulties in getting paid at some point.
However, the good news is that there are steps you can take to enhance your chances of receiving timely payments. Here are a few tips:
-Create a Payment Schedule:
One of the best things you can do is create a payment schedule upfront and include it in your contract. This will help ensure that you and your client know when payments are due.
-Include Late Fees in Your Contract:
Another good way to ensure timely payments is to include late fees in your contract. This way, clients will be automatically charged a fee if they do not pay on time. Avoiding late fees will give them an incentive to pay on time.
-Create and Send Invoices Promptly:
Create your invoices before you start working. This will allow you to send invoices promptly after completing a project or task. Many freelancers make the mistake of waiting too long to send their invoices, which delays payment.
It’s also essential to be professional when dealing with clients who are late on payments. Refrain from using threats or ultimatums, and calmly remind them of their contractual obligations.
If a client still does not pay after you have sent them an invoice and a reminder, it’s essential to follow up. You can do this via email, phone, or in person if the situation warrants it.
If all else fails and a client refuses to pay, you can take action by hiring a collections agency or filing a lawsuit as a last resort.
In conclusion, remember that freelance businesses operate just like any other business. By running them in a professional and organized manner, you can enhance your chances of receiving timely payments and maintaining the stability of your freelance business with a bit of effort.
For more info explore articles: