A 2017 study of the U.S independent workforce by Upwork shows that freelancing is growing so fast that by 2027, the majority of the U.S. workforce will freelance. Enabled by technology and spurred by the diversified income sources that having many clients brings, freelancing is increasingly becoming the career of choice.
But freelancing isn’t easy. As a freelancer or small business owner, you must also be prepared for challenges like finding new clients, managing those relationships and delivering great work. It’s a busy schedule and the last thing you want to worry about are administrative and accounting tasks like tracking time and expenses, billing clients, and collecting payments – all of which are highly manual tasks.
Thankfully, these tasks don’t have to take up the bulk of your day, if you take advantage of automation.
Here are four ways to automate away some of the complexity of your freelance or small business invoicing and payment workflows, while making sure you stay cash-flow-positive.
1. Use Time Tracking Software
Keeping track of time as a freelancer isn’t easy. One minute you’re on the phone to a client, the next you’re attending to urgent emails, all while trying to crank through a time-sensitive project. Forgetting to record 30 minutes here or an hour there can reduce your billings. Doing it manually could also mean you overlook project creep.
One of the basic forms of automation that can help streamline your workflows is to use time tracking software. Free and low-cost apps can help you understand how much time you spend on a project, identify scope creep (so you can step back and re-prioritize activities with your client), and simplify billing.
Many time tracking tools and apps also include automatic invoice generation based on your tracked time – which eliminates time-consuming tracking across spreadsheets and the potential for billing errors. Tools and apps to consider include AND CO and Harvest (both of which integrate with invoicing workflows), eBillity, Timely, and TopTracker.
2. Automate your Expenses
A key learning moment for any new freelancer is that money doesn’t take care of itself. If you’re to protect yourself in the event of an IRS audit and claim the right deductions you need to wrap your arms around your expenses.
Managing your expenses in a spreadsheet is ok, but as your business grows, maintaining a paper trail can become a headache. This is especially true of freelancers whose expenses are small, yet quickly add up. These small costs often get forgotten or recorded without the necessary backup information that the IRS requires such as date, business purpose, mileage logs, a copy of receipts, etc.
Several low-cost tools and apps can help streamline expense tracking so that everything is in one place at tax time. Expensify is a popular choice that takes most of the hassle out of the process by allowing you to snap a picture of a receipt and then upload it to an Expensify account. The app fills in the expense details, attaches the receipt to the associated credit card account, and imports the information to your accounting program.
Other expense management tools include Shoeboxed, Zoho, and Certify. However, if you’re looking for an end-to-end solution for integrating expense tracking and management with all your accounting needs, take a look at more robust accounting software like FreshBooks, QuickBooks, and Xero.
3. Move to Online Billing and Payments
Collecting payment is a perpetual challenge for freelancers and small business owners. A survey we conducted recently showed that 64% of SMBs get paid late and that the total amount in unpaid invoices across all U.S. SMBs is approximately $825 billion. This is tough on freelancers who live and breathe from gig to gig.
Practicing good invoicing hygiene and tweaking your invoice terms can help bring in money sooner, but why not consider moving to online billing and payments? According to FreshBooks, electronic payments are made eight days faster than traditional payment methods. Many online tools offer integrated feeds that also let you track conversations with your payer and payment progress – so you can see and chase delinquent payments from a single dashboard.
Catering solely to the freelance market, AND CO has created a system that handles all your administrative hassles – invoicing, payments, time tracking, expenses, and more. And, since it’s acquisition by Fiverr, it’s completely free. AND CO promises you’ll create invoices in 20 seconds or less, plus, you get live support and a “Chief Operator”: a direct contact who can help with any issues. AND CO integrates with PayPal and Stripe so you can accept payments from over 200 countries.
Other options, targeted at freelancers include Anchor and Hiveage, a feature-rich solution aimed at freelancers that includes dashboard reports, unlimited clients and invoices, payment reminders, time and expense tracking, and more than a dozen online payment gateways (PayPal, Payment Wall, SecurePay, WePay, etc.).
For mobile-based invoicing, consider the convenience of invoiceasap.
4. Access Financing Through Your Money Management Tools
As you can see, there are many options for streamlining your freelance finance workflows. But while you’re thinking about your money and monitoring your financial dashboards, you may notice that your expenses are creeping up, invoices aren’t being paid on time, or you just need a temporary injection of funds to grow your business or overcome cash flow problems.
Traditionally, you’d have to approach a lender directly or dip into your savings, but with advances in cloud-based integrations, many small business automation tools now offer freelancers and small business owners the ability to apply for and access credit, directly from the software interface.
For example, with new integrations from Fundbox Fuse you can apply for credit and draw on funds just by clicking a button within the tools you use every day, like AND CO freelance automation solutions, Bookly and Billy bookkeeping solutions, and Knowify job costing software.
If you apply for business credit from Fundbox, you can receive a credit decision in just hours. If approved, you can draw funds right away. Funds transfer as soon as the next business day and you can choose to repay over 12 or 24 weeks. Fundbox Fuse builds on “in-product” lending that we launched previously with small-business software providers including FreshBooks, QuickBooks, and more.
Whatever tools you use, chances are you can access Fundbox credit, in a few simple steps, right from within the software.
It might take a little time to implement these changes to your workflows, but the long-term time and financial management savings are worth making the effort to work through the improvements.
