According to a March 2019 study conducted by Forbes Magazine, one-third of adults currently work as a freelancer. That is a whopping 53 million people who contribute approximately $715 billion dollars annually to the economy. The freelance platform Upwork estimates this will jump to 50 percent by 2027. With technology making it possible to work from many locations and the excitement of working with a diverse client base, freelancing has become an attractive career choice.
The Challenges of Freelancing
Of course, there is more to freelancing than completing jobs for clients. You will also spend a good portion of time marketing for new business, creating invoices and billing clients, and managing client relationships. This aspect of freelancing can be extremely time-consuming for some freelancers since most tasks are manual. Fortunately, automating payment options and several other of the above tasks can reduce stress and free up more of your time.
Track Business Expenses Automatically
The ability to claim several tax write-offs is another benefit of working as a freelancer. However, the Internal Revenue Service (IRS) has strict guidelines for claiming any type of credit. While claiming as many deductions as possible reduces your tax burden, it can be difficult to track them all. A spreadsheet will only work for so long before you forget the details of an expense or fail to add it altogether. A small investment in accounting software such as QuickBooks or FreshBooks can save money at tax time as well as your sanity.
Use Credit Sparingly but Look for Convenience
Sometimes your freelance business needs a cash flow boost and you must apply for credit. Just make sure that you only exercise this option when necessary and carefully plan your budget to ensure you can repay the lender without incurring a lot of interest. Some platforms for small business owners such as Billy, Bookly, and Knowify allow you to apply for credit through the software program and receive an immediate response.
Use Software to Track Your Time
It’s common to switch between tasks such as responding to emails, conducting a conference call, and working on the actual task the client hired you to do. This can make it challenging to manually track your time, which means you could forget to bill your client for something. It can also lead to a common problem called project creep. That means the project takes up more time than you budgeted for and you’re not billing the client for it. Time-tracking software such as eBillity, TopTracker, and Timely will automate the process for you.
Automate Payment Options
Late payments and clients who don’t pay at all is a common freelancer problem. If you can relate, consider switching to an online invoicing system like FreshBooks. According to the company’s research, clients pay an average of eight days sooner when they receive an online invoice with multiple payment options. At least a dozen other options to automate online payment are available as well.
Outsource to Palmetto Payroll
Payroll and timekeeping are just two of the services we offer to small business owners at Palmetto Payroll. Along with automation, we can simplify your life. Please contact us today to learn more.