Having your own business and being your own boss may sound like a dream come true. I know I felt that way before I started my own business and became self-employed.
But, that was a couple of years ago.
Today I can honestly say that I still love the freelancing work I do overall. However, there are always certain aspects that are less enjoyable in any job, whether you are self-employed or not.
One of the tasks many freelancers find to be a major time suck is invoicing and accounting.
Of course, it’s necessary if you want to get paid at some point. In addition, the more often you invoice your clients the more time it can take.
So, how often should freelancers invoice clients? Here are a few factors to consider.
1. Number of Clients
One factor that can affect the frequency with which you invoice your clients is quite simply the number of clients you have at any given time. When you have a large number of clients to send invoices to, it might be to your advantage to invoice them all at once on a monthly or bi-monthly basis.
If you send invoices more often, such as weekly, you could find yourself spending more time tracking payments and doing bookwork than you’d like.
Another drawback to billing on a weekly cycle is that it could take away from your creative time to complete the projects for which you were hired. In other words, the more time you spend doing bookwork, the less time you have to do the work that makes you money.
2. Volume of Work
The amount of work you do for each client is another consideration to how often you should invoice.
For instance, if you are doing a large project or multiple large projects for one client you may want to break up the billing and send more than one invoice. This can help you get paid faster instead of having to wait until the very end of a project to bill a client.
Furthermore, if the project is sizeable, you could require a pre-payment before you even begin. There is always a chance your client may think you are desperate if you ask for part of the fee up front. But, explaining that it is a deposit can help.
If for any reason your client does not pay the balance of the bill at the end of the project, you are not out the entire fee since you retained a deposit at the beginning.
A different way to bill for large projects is to bill part way through, and then again at the end of the month or project. This allows the client some cushion and flexibility in paying for your services. It may be better than getting hit with a large bill all at once upon completion of your services.
3. How Soon Do You Need the Payment?
Freelancers have bills to pay just like everyone else, which is why you should make invoicing a priority. Obviously you don’t want to appear to be desperate for payment from your clients. On the other hand, you deserve to get paid for the work you do.
If you are strapped for cash and just starting out, it can be helpful to bill more often, such as weekly, until you get a larger volume of clients and work built up. The beauty of being your own boss is that you can base your billing cycle partially on your own financial needs.
Let’s say your house payment is due on the 10th of each month. You might choose to invoice your clients on the last day of each month and expect payment by the 5th. Billing in this manner gives you a little cushion to make sure you have received payments before your personal bills are due.
4. Method of Invoicing
What type of invoicing system are you planning to use to bill your clients? Is it electronic? These are a few of the other things that can make a difference in how often you send statements to your clients.
When you have a very user-friendly invoicing system, you can manage your invoices and payments with ease. Rather than putting off sending invoices to clients due to the complexity of your system, you can instead send them with whatever frequency you wish because it’s so easy to do.
A side benefit of using a system that is easy and fast is that it provides your customers with an easy way to pay you as well. Therefore, billing clients weekly may not be out of the question. An easy system allows for a quick turn-around time so you get paid faster.
It’s likely at some point or another you will have a customer who doesn’t pay on time. Should you send a reminder? If so, how soon and how often should you send them once the initial bill has been sent? Sending late payment notices is not a pleasant task. But, it is something to think about when determining how often to invoice clients.
6. Keep Good Records
An accurate way of tracking your services, invoices, and payments can affect how often you bill your clients. When your records are not up to date you should not send a statement to a client.
Unfortunately, this means you won’t be getting paid any time soon either. In order to ensure you receive timely payments, maintain your records and send statements on a regular basis.
7. Payment Policies
Once you get rolling as a freelancer, it is important to develop payment policies. Your payment polices can be rigid or fairly flexible. But, either way, they need to be set up and disclosed to your clients.
Making your policies known gives you a better chance of sending statements timely and also getting paid timely.
8. Include it in the Contract
Signed contracts that spell out the particulars can be of help when you are deciding how often to bill each client. Some clients will not be able to pay on the timeline you would like due to their own budgeting or personnel constraints. If that is the case it should be stipulated in the contract. But, the point is, it can therefore affect how frequently you bill.
9. Type of Client
The type of client that hired you can have an effect on how often you should invoice them.
For example, some companies and other entities are only able to pay once per month after receiving approval from their board members or a person of higher authority. Knowing the kind of client you are dealing with can impact how often you bill this type of client.
You may also have to send the bill to a different person within the company in order to receive payment.
The answer to the question of how often freelancers should invoice clients is clearly not cut and dry. Instead, it depends on a number of factors, all of which should all be weighed carefully.