One of my least favorite things to do is to track clients down and ask them to pay me.
Even though I deserve to get paid (and have already completed the work), it just doesn’t feel good to have to remind them or ask for money. For some reason, it always makes me think they’re going to reply to my payment request with “We don’t need you anymore.” It’s never happened, but that’s what goes through my mind.
Automating payments is making my life so much easier. Today I want to share with you a little about my accounting system and how it has continued to evolve over time. FYI, I recently shared my process for tracking my income and how that’s helped me to make more money on Freelance Freedom Fighter – you should check it out!
How I Started Invoicing
One of the first things I did was to upgrade my personal PayPal account to a business one (this is free). I recommend in my course that every freelancer should have a PayPal account – it’s kind of how the freelance world goes round.
You can then brand yourself by adding your photo (and company name if that applies) to your invoice. Here’s what my VERY FIRST invoice looked like:
As I started to get my feet wet, I heard about FreshBooks (referral link). You can try FreshBooks for free for 30 days. Based on my client base (less than 25 active clients), I pay $20 per month. I just use it for invoicing, although there are many more capabilities of the software, like income and expense tracking and time tracking.
I think their invoices look a bit more professional, plus you can use other payment gateways. I request that clients pay me by PayPal if by checking account (or PayPal balance) and by Stripe if paying by credit card (their fees are less for Amex users for example). This is the exact wording in the “terms” box:
“Thank you for your business. Please submit payment via checking account with PayPal or via credit card with Stripe within 7 days of receiving this invoice.”
Here’s a snapshot of a FreshBooks invoice:
You could stick with PayPal for awhile, but I feel like I use FreshBooks to the extent that I’m paying for it. I know I could be doing more with it and might in the future.
Setting Clients up on Auto-Pay
As I mentioned in my last income report (where I made $6k+ for the first time from my freelance business), I have kind of settled into my current client list. I’d take on another writing or VA client if it were the right fit, but feel good about my current roster. I am continuing to build my coaching client base (currently at 18 folks), so if you’re interested in starting or growing your freelancing business (you don’t have to be a writer), go here for additional details.
I would say that 50% of my current clients are now on an auto-pay. I used to invoice monthly, but have transitioned to setting up an automatic arrangement for those that were open to it. It’s not the same method for all of my clients, so I’ll explain how it works for different ones.
My newest VA client has added me to his payroll system. I’m not an employee, it’s just the way that his business processes payroll. So on the first of every month, a payment will be sent from him to my checking account (settling a few days later). This is great for me, as again it’s automatic and I don’t think I’ll be charged any fees (I’ll find out soon).
2. PayPal Buttons
This was a tip from my awesome web guy (Hi Grayson!). He taught me how to set up individual buttons for each client and then send them a link. They then click the link (which has all of the payment info already input by me) and authorize an automatic payment based on the details selected. They can pay with their PayPal balance, checking account or even by credit card.
3. Recurring Invoice
This isn’t an auto-pay method, but it is a systemized approach to invoice. Via FreshBooks, I have it set up to invoice certain clients automatically on the first of the month. This works well for coaching clients, in particular since our scheduled calls are usually consistent (i.e. biweekly).
The rest of my clients are still manually invoiced upon completion of my work. Basically, when I complete a piece I’ll go into FreshBooks and manually input the article title. I have a draft saved prior to each month starting (for each client), so I just need to add the title. When the last piece is finished for that month, I send the invoice. This process works well for me to stay on top of invoicing/collections!
In FreshBooks, you can also see when a client has logged in to view their invoice, when they’ve paid, etc. You can also modify invoices after they’ve been sent, resend if necessary and manually apply payments if they paid you by check or another method.
I’ve been paid by check in the past and even though it’s one of the lowest costs (i.e. no transaction fees), it’s not one of my favorite methods. It takes longer to get and then I physically have to go to the bank and deposit/wait for it to clear. All of the other payment types are instantaneous and clear almost right away.
As you’re starting your freelance business, at the very least set up a PayPal account and send proper invoices. Later, it might make sense for you to try out a FreshBooks account or another accounting software.
Make sure at the very least to brand it with your headshot (to match all of your other social media profiles) and present yourself appropriately.
After you’ve been working with clients for awhile (and have a consistant workflow), consider setting them up on an auto-pay, so you don’t have to bug them when they forget to pay your invoices. It will save you both a bunch of headaches!
What do you currently use for your accounting system?