Freelancing while fun and gives you room to create a better work-life balance comes with a price. When you work for a company, they will handle almost everything to do with your salary. From paying your taxes and national insurances to ensuring your get paid on time.
Although that varies from country to country, the general principle is the same.
As a freelancer, you are responsible for your own income, expenses, taxes, VAT, and more.
It can get really messy really quickly, but with these quick and easy tips – hopefully, you can master the art of freelance money.
Photo by Kelly Sikkema on Unsplash
When freelancing, part of the fun is that you can do it globally. You can work with whoever and whenever. That also means that you are likely to see a range of currencies too.
The tricky thing with some currencies is that you might get paid less or more than what you charge in your local currency.
Check foreign currency accounts and see where you can get the best deal. Keep an eye on the exchange rate and take it into consideration and fluctuations when you give your pricing.
A large percentage of small companies and freelancers aren’t insured. This can cause a catastrophe later down the line. If your work causes a client to lose money, they often have ground to sue you.
Or, if your product makes someone seriously ill, you might come under fire for legal action.
You most likely have car insurance, home insurance, and life insurance. Knowing that if you are in a car accident, capable car accident lawyers and your car insurance will have you back on the right track in no time at all.
But what if you don’t have insurance in place and you are sued? Could you afford to continue work and pay fines or damages?
If not, it is time to consider if you have the right insurance to keep your business protected.
If your invoicing system is messy, then you might just find that you are missing money you didn’t know about. You might like to create your invoices yourself using google docs, Microsoft Word, or pages.
The problem is they don’t have the software in the background to make sure that reminders are sent, totals are added up, or even %s at speed.
PayPal Freshbooks, Wave, and Bonsai are some of the top-rated accounting software used by small businesses worldwide.
It is essential that, as a freelancer, you look at your numbers at least once a week. This will give you insight into how your finances really are.
With the right bookkeeping in place, you can also check over previous years when you may have had a slow period.
Allowing you to prepare in advance by saving up some money to help you make it through the tighter months.
Don’t be scared to add on late fees, add discounts for long-term clients, and truly take charge of your freelance finances.