How to Handle Finances as a Freelancer

Being in business for yourself can look like a lot of different things. You could own a small cafe, an online boutique, or even a freelancer. Freelancing is one of those things that a lot of people don’t know a lot about. If you’re considering a career as a freelancer, or you’re just beginning to accept freelance work and you want to begin doing it full time, there are a few things you haven’t even thought to consider, but that you’ll need to figure out in order to be successful.

Tracking finances

 

As a freelancer, your income is usually very fluid and subject to a lot of fluctuation. This can be really stressful. You’re not only always sure where your next paycheck is coming from, and you have to hold other parties responsible for paying you on time. One great way to track your finances, is to have someone else do it for you. This may not seem very efficient, but what you’re great at is the freelancing work. So wouldn’t it make sense to outsource and have someone who knows how to handle the technical, small business finance tasks to be taken care of by someone who understands that? Every time you enter a new agreement, you should have your project tracked so you know exactly how much you’ll be getting paid and when.

 

Always sign contracts

 

There are plenty of people that will promise to pay you for your work, but then want to flake out after you’ve done the work and try not to pay you. It’s dishonest, but it happens a lot more than you’d think. The easiest way to avoid being put in this position is to always make clients sign contracts before doing any work for them. Make sure your contracts clearly state what work will be done for the client, when the work will be accomplished, how much they’ll be paying you for the work, and when they’ll be paying you. This last part is really important! Always make sure you have a signed copy before starting work. This way, if they don’t pay you for your work, you can take them to small claims court if necessary, to get your compensation.

 

Understand that financial management is a necessity

 

Managing your money is boring, and it’s a stressful task. When you’re never 100% sure when your next paycheck will hit the bank, it’s really important for you to know what projects you have in your future that will be paying, what projects have pending payments, and how much money is available to you. If you don’t have to worry about managing your finances, you can focus on finding more work, which will make you more money!