Waiting on invoices to be paid? Here's how to track and manage your payments if you're a freelancer
One of the biggest perks of freelancing is the control you have over your work schedule. This lifestyle allows you to manage your workload and the types of projects you take on. Plus, it doesn’t hurt to work in the comfiest set of PJs you own. However, if there’s one aspect of the job that freelancers have little to no control over, it’s getting paid.
While being a freelancer can be an empowering experience, being paid should be a satisfying reward at the end of a job well done. But even after sending invoices and countless emails stamped with a well-timed “Just checking in!” subject line, it can be hard for freelancers to receive their payments in a timely manner.
So how can freelancers make sure they get their paychecks in the bank? We tapped a few financial planners to share some of their expert tips on how to track down payments while working as a freelancer. Because if your client list is full, your bank account number should be too.
How to track down payments from your clients.
1Set-up a well-thought-out contract.
The first step of beginning any freelance project should be putting together a contract that spells out the work and payment involved. “If you are entering into a work agreement, please sign a contract and define the terms,” Stefanie O’Connell, millennial money expert and author of the book The Broke and Beautiful Life tells HelloGiggles.
O’Connell also suggests renegotiating payment terms so that they work best for you. “If you can structure the contract in such a way that you can be paid some portion upfront of your fee, that’s great. Or, if you can be paid in installments, [that’s even better.] If you can’t, [try to] define the terms of payment,” she says.
Being clear about the details in your contract can help once a job is complete and you’re seeking payment from your client. If details are clearly defined in the contract, then it’s easy to know exactly what you’re owed and when.
2Incorporate tools like apps and calendars into your routine.
“Having a system where you’re tracking what [money] goes in and what [money] goes out is really important for your business,” says financial planner at Brooklyn Plans, Kristen Euretig.
One way to track your finances is by using invoicing apps like Wave or ReliaBills. Tools like these will help generate invoices and due date reminders, as well as retain a record of your clients. “You can track the history of the companies you work with and have a sense of their timeline for payments,” says founder of the financial education platform Clever Girl Finance, Bola Sokunbi. Many apps and programs can also automate messages and reminders to your clients for you, which is one less thing you have to add to your to-do list.
Another way to track your freelance work is to make use of a calendar that is marked with all the important dates, including deadlines for projects and payments. “I think it’s important to have a freelancer’s calendar,” says financial advisor and speaker Winnie Sun. “When you’re building your own business and handling clients and deadlines and tasks, it’s easy to let time go by without [accomplishing] everything.”
3Identify the point person who pays the invoices.
When you’re communicating about payments with your clients, it’s important to make sure you’re communicating with the right person. You have to understand that the person who assigns you a project might not be the same person who distributes the payments. “Say you’re a writer and you’re working with an editor,” O’Connell explains. “[Usually], the editor is not the person who’s clearing the payments for the company. You need to [connect with] the accounting department. You want to make sure you’re in touch with the person who’s responsible for sending you the payment.” Being aware of who your point of contact is will prevent future headaches when you’re trying to track down a long-overdue payment.
4Communicate clearly with your clients and document your correspondence.
You don’t want to second-guess yourself when you’re setting payment terms with your clients to make sure your invoices go through. All experts agree that freelancers should keep a record of all correspondences that happen to reinforce your contracts. Remember: Email can be used as a form of contract, so most written communication via email counts in a court of law. “Make sure that you’re keeping everything documented,” Sokunbi says. “If you’re having conversations with [your clients] on the phone about the work and payment schedule, make sure you follow that up with an email highlighting everything that was discussed.” Basically, keep your receipts, friends.
5Choose your clients well.
For a lot of freelancers, choosing clients means simply picking people who are willing to hire them. And while that might be the case at the beginning of their career, as soon as freelancers are able to be selective with clients, they should double-down on who they want to work with, according to the experts.
“It’s important as freelancers that we recognize that we don’t just want clients,” Sun says. “We want good clients that pay us on time. And if they don’t, there will be other clients who will pay on time.”
It’s also worth noting that a little optimism can go a long way. “Most people are operating in good faith,” Euretig adds. “For the most part, people are just juggling a million things, and if they’re making a late payment, it’s not at the top of their list. So, just be clear [about your needs] and follow up.”
6Know your worth.
Above all, freelancers need to have the confidence to say that they deserve to be paid for accomplishing a good job. “When you’re a freelancer, you have to know and believe that you’re worth it and that the service you’re providing has value,” Euretig says. “[Being aware of] the value that you’re providing makes those conversations feel a little less intense, and knowing and believing in your worth will come off in the [way you communicate with your clients.]”