My So-Called Freelance Life - Michelle Goodman [64]
I can’t go back in time and get my financial ass in gear sooner than I did, but I can tell you what I’ve learned since my twenties about making the sporadic freelance checks last throughout the year, finding halfway decent health insurance, and ensuring you don’t have to spend your golden years living under the freeway.
Invoicing Is My Religion
Working for yourself means getting in touch with your inner bean counter—in other words, obsessively tracking your invoices and keeping squeaky clean financial records so you don’t get dinged at tax time. (More on the latter in Chapter 16.)
Before I begin work with a new client, I ask when their accounting department cuts the freelance checks (on the 15th and last day of the month? Thirty days after receipt of invoice?), as this varies widely from company to company. That way I can be sure to submit my invoices during the soonest possible pay cycle. For ongoing work, I like to invoice once a month (less administrative work for me), but as long as your clients are up for it, there’s no law that says you can’t invoice weekly or biweekly. Again, this is something you should work out with your clients and factor into your contracts.
I haven’t sent an invoice through the postal mail since the nineties; I use email. If it’s a new client and they don’t confirm receipt, I follow up to make sure they got my first invoice. I give every invoice I send a number (001, 002, et cetera—though you can use any numbering system you want). I’ve never actually had to use these numbers to reference an invoice later, but knowing they’re there makes me feel more organized. To track my invoices, I use an Excel spreadsheet with these columns: client, project, fee, invoice number, date invoiced, date paid, and date I deposited the payment. I also divide the spreadsheet by quarters (January through March, and so on) and track the totals as I go, so I can see how my gross income’s looking as the year progresses.
But my spreadsheet addiction doesn’t stop there. Because I do dozens of projects a year, I keep another spreadsheet to track them all, using these columns: client, project, deadline, project notes, fee, and status (a.k.a., “in progress,” “done,” or “invoiced”). Not only does this show me what assignments I have due each week, it reminds me who I need to invoice. Anal, but so much easier than scrambling to figure out who I’ve billed and who I haven’t.
Some freelancers use a program like QuickBooks to generate their invoices (and, I imagine, to automate everything I just described). I’m an old-school Word doc invoicer, though I keep a template handy so I don’t have to reinvent the wheel every time. If you too want to make your invoices manually, here are the particulars you should include:
• The date
• The word “invoice” and the invoice number
• Your name, company name, and contact info
• Your client’s name, company name, and contact info
• Description of the work performed, including date completed
• The amount owed, including number of hours worked and hourly rate if billing by the hour
• Any applicable late, rush, other fees
• Your social security or employer identification number (your client needs this for tax reasons, as you’ll see in Chapter 16)
• The address where you want the payment sent (as I mentioned in Chapter 4, I use a PO box to keep my checks safe)
A word about getting paid: Call me old school, but I love being mailed a check. It’s a nice affirmation that I’m actually making a living at this crazy boss-free life. (I still have the stub from my first book advance hanging in my office.) But armies of freelancers use electronic payment sites like PayPal and Google Checkout these days, especially those selling their services to individuals via the web (designers, virtual assistants, and business coaches) and those working in IT. If you go this route, make