Although I recommend that you never bill by the hour, you must track your time. To not do so would be utter folly.
If you are wondering why, it is because the key to maximizing your earnings as a freelance blogger is to understand how long your work takes you. After all, if a client pays you $2,000 per month to write 20 articles and you don’t know how long it took you, how do you know whether or not you are achieving the rate you set out to earn?
Consider the following hypothetical example. Your MAR (as defined in the chapter on setting and negotiating rates) is $50. You have one client who pays you $1,000 per month for article writing. Last month you spent a total of 18 hours on work for that client, which means you earned an equivalent hourly rate of $55.56. You know that in order to hit or exceed your MAR for that client, you need to work 0.92 hours or less on average per weekday:
( ( Monthly Pay * 12 ) / MAR ) / Weeks in Year / Days in Week = Target Hours Per Weekday
( ( $1,000 * 12 ) / 50) / 52 / 5 = 0.92
This may seem rather technical and convoluted, but it is how you should view your work in order to progress.
I have tried a few different systems for time tracking and bookkeeping but have settled on Freshbooks. It offers all of the time tracking and invoicing features you could want along with a plethora of reporting options. Even better, there is a 30-day free trial available and paid plans start at just $19.95 per month.
I would recommend that you sign up for the free trial and give it a go at the very least — you’re not likely to look back.
I bill my clients on the first day of the month for work done in the prior month. You may feel uncomfortable about this to begin with (I appreciate that the prospect of not being paid for a month’s work is an unhappy one) so you may wish to start with a fortnightly billing frequency (if your client is willing to accept it).
However, you will soon discover that creating twice as much administrative work isn’t of great benefit, especially when you are working with trustworthy clients. In my experience, a monthly billing cycle is typical and expected.
When it comes to getting paid in an accessible and efficient manner, PayPal really is the best solution. This is especially the case when working with international clients.
However, if possible I would urge your domestic clients to make payment via direct bank transfer. Whilst PayPal is an excellent service, the charges applied to monies received are pretty hefty.
For instance, I currently pay approximately 2.9% on all monies received. If I make $4,000 in a month and it is all paid through PayPal, they take well over $100 for their troubles. On the other hand, if you receive payments via a bank account, you will pay far less (if anything) in fees.
Dealing with Aged Debtors
For those of you who don’t recognize the term, an aged debtor is simply someone who hasn’t honored a contractual obligation to pay within a certain time. So if you bill a client on the 1st of the month and the payment terms are 14 days, they become an aged debtor on the 15th of that month if they have not paid.
When it comes to aged debtors, prevention is the best cure. You should pick trustworthy clients and make your payment terms absolutely clear in the contract. But even the most careful of freelancers is still likely to come across aged debtors, and dealing with them in a way that results in your ultimate goal (to get paid) can be tricky at times.
The first question to consider is this: do you believe that the client actually has a clear intent not to pay you for services rendered? You may find that the client has simply not prioritized your payment appropriately or that there has been some kind of administrative confusion.
You should exercise leniency if you reasonably believe that you are dealing with a late payer rather than a non-payer. Send the client a polite email referencing the unpaid invoice and the due date. Ask them when you can expect payment. More often than not you will receive an apologetic email with a confirmation of a payment date.
If you are dealing with someone who has a clear intent not to pay, I’m afraid that you are in trouble. You should start with a polite email as before but that is likely to be ignored. The next step is to call the client (if possible) and speak to them directly, or send more emails.
An exchange at this stage should not be confrontational or antagonistic. Your aim will simply be to convince the client that you have spent time carrying out a service, that your livelihood depends upon being paid for your time, and as such you would appreciate payment. Reason is the most powerful weapon you have — raised voices and threats are not likely to result in a positive outcome.
In spite of your efforts you still may find that a client is unwilling to pay you for your services. At such a point you need to make a practical decision as to whether or not it is worth your time to pursue the issue any further.
Every minute you spend chasing aged debtors is a minute that you could otherwise be investing in your business. If we’re talking about a relatively small sum of money it may not be worth your time to take the issue any further. In order to have a chance of getting your money you will have to pursue a convoluted and complicated legal process, which in itself will cost you time and money. And of course, you have no guarantee of winning.
It hurts to write off monies owed but the practical move is usually to do just that. As I have said (and will happily repeat time and time again), prevention is the best cure when it comes to aged debtors. Pick the right clients and you should rarely (if ever) have to deal with non-payment.