Freelancer invoicing: 7 ways to maintain positive cash-flow
Freelancers juggle many hats - salespeople, bookkeepers, consultants etc. You name it, they do it. In the midst of all this multi-tasking, the last thing they would want is to run behind clients, begging them for payments. Did we just press the 'hard relate' button on your psyche? You are not alone with such freelancer invoicing woes. Owing to late payments, over 50,000 small businesses crash and burn every year. Not to mention the mental stress of it all.
To keep the heart of your small business pumping, you need to be paid on time. And here are some steps you should follow to get this end result:
- Enter into a binding agreement with the client
- Create and send an invoice
- Diligently follow up on the invoice
To simplify these steps, more so during the pandemic, we recommend adopting an eSignature solution such as Signeasy. It is sure to eliminate the unnecessary delays in remote document processing by allowing you to create and send invoices to remote clients in less than a minute and automating payment reminders.
- Sign a comprehensive contract: Contracts are a great way to ensure that clients keep their end of the bargain. When wording the contract, that legally binds your clients to pay you on time, you need to include terms related to late payment fees, payment timeframes and notice period. Also, understand from the client what details (such as a purchase order number, or invoice format) you need to provide to ensure their finance team processes the payment without delays. Including such clauses into the contract, and getting it electronically signed with an eSignature solution ensures that there is no room for confusion later on.
- Ask for upfront payment: Many freelancers ask for payment only after the work is done. Especially with new clients, this is a high-risk move. Afterall, what’s the guarantee that they will pay at all? So, instead, consider asking for at least 50% upfront payment. An online invoice for this advance payment should be sent (you can use Signeasy) to the client right before the start of the project.
- Get an eSignature solution with a powerful mobile app: The best part of being a freelancer is the ability to work from anywhere, coffee shops or wherever there is a WiFi connection. No matter where you are, you should be able to send invoices and reminders to your clients with just a click of your mobile. Mobile-first eSignature software, such as Signeasy, enables smooth flow of paperwork from anywhere, anytime and on any device. The clients will also gladly process your payments faster since they can also sign-off on your invoice on the go.
- Invoice often: If you wait for a long time to invoice your client, after the work is done, they may start to feel like you are not in any rush to get paid. This will mean they will take your invoices lightly and you would need to send additional reminders -- leading to outstanding payments. To avoid this, make sure to send an invoice for every project as soon as possible. With an eSignature solution that’s a lot easier to do since you don't need to print, fax or scan these invoices. Just make edits to the existing invoice format and hit send.
- Clearly detail-out all invoiced items: You don't want the invoice to get rejected because you don't clearly mention the number of hours you spent on a task, or the correct word count of the article you wrote. By clearly mentioning all job details, you ensure that the finance team has no reason to question or doubt your invoice.
- Set payment reminders : Turns out that the average freelancers spend about 20 days a year chasing late payments! What a waste of precious time that could have been spent on actual work. Luckily, there is a way out of the administrative hell - Signeasy allows you to set automated reminders on invoices so that you don't have to spend time manually wording and sending emails, phone calls or IMs.
- Create invoices that stand out: Clients receive so many invoices every day. If you don't want your invoice to be lost in this clutter, consider sprucing up your invoice. Thanks to Signeasy’s capability to store templates, you can create reusable invoice templates with interesting designs and thoughtfully placed logos.
Other ‘savings’ from eSignature solutions
When you are paid on time, you can focus on delivering great work for your clients instead of stressing over the likes of freelancer invoicing reminders and missed payments. Apart from speeding up payments, your bottom-line can be helped by eSignature solutions in the following ways:
- Minimizing the cost of printing, scanning and couriering documents such as agreements, invoices, tax forms etc.
- Securely storing documents on the cloud so that it may be accessed from anywhere and any time. This way, you will not only save on costs of physical archives but also ensure audit trails for compliance purposes.
- Digitizing paperwork so that it improves your productivity but also keeps you away from diseases like COVID-19 that are spread through contact with inanimate surfaces (such as paper, scanners, printers etc). This means fewer sick days -- and what could be more valuable to your small business than your time!
Ultimately, by reducing the overheads and improving your efficiency, esignatures helps your freelance business stay agile and profitable. Consider signing up for Signeasy’s 14-day free trial to see what the fuss is really all about.