What You Need to Know About Freelance Invoicing and Accounting

Posted in Freelance, Tips, Web Design • Posted on 13 Comments

I could probably sum this up very quickly with the few words “keep it simple.” But because I want to provide you with enough information as to why you need to do that, I’ll elaborate a bit. This is not a list of great programs or apps to use but rather just explaining why it’s important to use something. However, I have my favorites I use so they will be mentioned throughout the article for reference. Alright, let’s get started!

Why Use A Bookkeeping and Invoicing Program?

Well…if you don’t think it’s vital to have something for your records and for your taxes, maybe you’re not freelancer material. You don’t have to spend much time on this each week, but it’s important to keep records and be able to invoice professionally if you want to be treated as a professional. There’s nothing wrong with going simple though, in fact, that’s exactly my next point is, so read on.

Keep it Simple

by Jared Latigo

Simplify with Freshbooks

Ok so it took me quite awhile to migrate over to Freshbooks, but it was the best decision ever. I started off with Quickbooks because I had been around businesses my whole life and they all used it. But what I didn’t realize was that those businesses had lots of billing, payroll, expenses, etc to keep up with whereas I just had me, pretty much. I do have expenses and invoicing to do, but simple is better and that’s exactly what systems like Freshbooks provide. They are made for people like us who only bill out a few times a month, have minimal expenses, and need things to just work. The big struggle I had with Quickbooks was that it was highly difficult and I just didn’t have the time to learn it. To me, a program should not be that complicated, or ugly for that matter. Here’s some things Freshbooks allows me to do.

  • Send invoices online immediately
  • Link to PayPal or other merchant so I can get paid immediately
  • Integrates with my proposal software
  • Makes bookkeeping very simple
  • Limited options keep me sane
  • Easy branding and color scheming

And here’s a few things that you should look for in any system.

  • Simple
  • Reasonable cost
  • Ability to easily send clients invoices online
  • Ability to create invoices in just a few minutes
  • Can easily track payments
  • Recurring invoices
  • Branding and personalizing
  • Easily accessible
  • Small learning curve

And lastly, below are some downfalls to using Quickbooks in particular

  • High up front cost
  • Very large learning curve
  • Not user-friendly
  • Extra fees for things like sending invoices online
  • Only accessible on one computer (unless you pay extra, again)
  • UI is terrible (as a designer, had to throw this one in)

I realize that Quickbooks has a lot of the same features as Freshbook and many more, but they aren’t setup out of the box and many require extra fees to use them. The best-selling point for me on Freshbooks was the fact that it’s easy. There’s really no room for error and it doesn’t overload me with options. There’s plenty of other invoicing systems out there, just be sure to check this one out but most importantly, get something that works on a professional level.

Make it Professional

We briefly touched on this in the last section but I wanted to give it its own section so you realize how important it is. First off, make sure you’re using something that’s simple as we discussed. Then you need to customize it a bit by changing your colors and/or adding your logo. The latter is really important. It’s amazing how many people will take notice that you’re serious about your business if you just add your logo. Also, be sure that everything is correct and on time when invoicing. It says a lot about you.

Do Your Taxes

by Mat Honan

Be Sure to Take Out Taxes

When freelancing you have to remember that you’re taxed on everything you make. True, you have write-offs, but you will still owe money on what you’re bringing in. There’s no way for me to go into detail on how much for you to take out since every state and country is different. Be sure to check the laws on self-employment taxes and maybe meet with an accountant that can help you understand a good amount to take out. Personally, I take some out of every check so that it accumulates over the year and I have the money to pay them when tax time comes. I believe this is the best way so you’re not caught with a huge bill and no money to pay it. Many people pay their taxes quarterly as well, but as long as you’re taking money out of each payment you get, you won’t have to worry about whether it’s paid quarterly or in full.

In closing this section, I really can’t stress how important it is for you to do this. Being stuck with a several thousand dollar bill owed to the government is not a fun thing. Make it a priority, it’s in your best interest.

HourGlass

by graymalkn

Be on Time

This last section really goes for any part of your freelance career. If you want people to take you seriously, be on time with everything. Even be early, but never be late. Being late shows you don’t care enough about their project to make it a priority and get it finished on time. This goes back to the “hot potato” method we talked about in the previous post. Get it done. Get it back to the client. And keep that ball in their court.

Aside from the above, being on time also adds credibility to your brand and will help you down the road when you’re getting referrals. If you’re a trustworthy, reliable person, you’ll always get more business.

Well that’s all for today. Hope this helps you in your daily freelance life and is a good reminder for those of you who are just starting out or thinking about it. Feel free to leave comments below and add to the article if you see fit!

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13 Comments Best Comments First
  • John

    Wednesday, January 18th, 2012 03:39

    12

    I like quickbooks. It’s pretty idiot proof. The other side of the equation that is often overlooked is your client’s invoice processing system. I’ve found that some clients have systems so good that their system can accept/capture/scan most invoice formats. That said, you sometimes have to modify your quickbooks settings to adapt to their accounts payable department.

    +1
  • Dan

    Tuesday, March 1st, 2011 09:27

    6

    Are you recommending anyone for invoicing solution.?

    0
  • Kung Karl

    Tuesday, March 1st, 2011 02:17

    4

    Brilliant post as usual here at 1WD! Keep it up!

    0
  • bearpig

    Monday, February 28th, 2011 15:12

    3

    I did an article about freelancers invoicing options – never tried Freshbooks, but that’s because i wanted to have my accounts/invoices stored locally and not on the cloud. After trying Billings, Billable and Quickbooks, I came across GrandTotal and have been very happy with it as an answer to the simple quick good-looking invoice issue.

    0
  • Issa

    Wednesday, March 2nd, 2011 14:14

    7

    I love the last part here which is being on-time…and I hope clients will also pay on time. I think that having a professional-looking invoice doesn’t only speak for you as a pro, but it also helps your client when tax time is near. What matters most is that whichever invoicing software you choose, it must be able to accept multiple types of payment as not everyone likes paying with Paypal. I’ve encountered someone asking for a Google Checkout, haha. Thanks for the tips anyway!

    0
  • Rob

    Monday, February 28th, 2011 15:49

    1

    Is there an invoicing program that can integrate with proposal software?

    0
    • NickJ

      Thursday, September 22nd, 2011 00:04

      10

      You can use an app like CurdBee, which has an integrated flow between proposals and invoices.

      0
    • Jared

      Monday, February 28th, 2011 19:58

      2

      @Rob That’s coming up in the an article very soon. There’s plenty that integrate but the two I use are bidsketch and freshbooks. Check em out and be sure to come back for the article soon.

      @bearpig Good thing to point out! I forgot to mention that freshbooks is online only so if you’re into keeping your files locally, there would be other options for that. Thanks for the comment.

      0
    • Tony Oravet

      Tuesday, March 1st, 2011 04:46

      5

      Rob – Blinksale.com has a really nice option for Estimates. If a customer approves the estimate, then you can convert it to an invoice. Pretty nice! We have been using Blinksale.com for a few years now. They use to have a free trial, but I think their cheapest package is like $6/month for a few invoices…worth a try!

      Good luck!

      0
  • Donny

    Thursday, March 29th, 2012 06:27

    13

    I used Curdbee also it is fantastic, also check out ‘ the invoice machine’ they has a really neat system also

    0
  • Mildew

    Saturday, October 22nd, 2011 10:58

    11

    Looks great. Big or small, independent firms usually use Peachtree though. What I like about these accounting services is that, some of them are actually free for anyone to use – great for those who are just starting their own business.

    0
  • Adil Badshah

    Wednesday, March 2nd, 2011 08:54

    8

    Guys i am also a freelance website designer and developer, can you let me know how do i make my invoice to send my client. I want to make a template of invoice and want to use it for my all clients.

    Waiting for healthy reply.

    Thanks.

    0
  • Alex

    Tuesday, March 29th, 2011 08:16

    9

    I did give Freshbooks a try, this is one of the finest invoicing application; however, the price is too much for a small businesses and freelancers considering the limitations of basic plans.

    I would really recommend you to give Invoicera a try, its basic plan starts from $9.95 and you can send unlimited invoices to 25 clients. It supports 20 popular payment gateways so you have more options to get paid on time. It also supports multiple currency and languages so you do not need to worry while sending invoices to your global clients. the most appealing feature of Invoicera is its customize invoice template feature where you can customize the look and feel of your invoice template and design it in the sync with your business look. Some other features that might be helpful to you are invoice scheduling, late fee option, time tracking and expense management. Invoicera is the complete invoicing app that is helpful for every business.

    0
  • Donny

    Thursday, March 29th, 2012 06:27

    13

    I used Curdbee also it is fantastic, also check out ‘ the invoice machine’ they has a really neat system also

    0
  • John

    Wednesday, January 18th, 2012 03:39

    12

    I like quickbooks. It’s pretty idiot proof. The other side of the equation that is often overlooked is your client’s invoice processing system. I’ve found that some clients have systems so good that their system can accept/capture/scan most invoice formats. That said, you sometimes have to modify your quickbooks settings to adapt to their accounts payable department.

    +1
  • Mildew

    Saturday, October 22nd, 2011 10:58

    11

    Looks great. Big or small, independent firms usually use Peachtree though. What I like about these accounting services is that, some of them are actually free for anyone to use – great for those who are just starting their own business.

    0
  • Alex

    Tuesday, March 29th, 2011 08:16

    9

    I did give Freshbooks a try, this is one of the finest invoicing application; however, the price is too much for a small businesses and freelancers considering the limitations of basic plans.

    I would really recommend you to give Invoicera a try, its basic plan starts from $9.95 and you can send unlimited invoices to 25 clients. It supports 20 popular payment gateways so you have more options to get paid on time. It also supports multiple currency and languages so you do not need to worry while sending invoices to your global clients. the most appealing feature of Invoicera is its customize invoice template feature where you can customize the look and feel of your invoice template and design it in the sync with your business look. Some other features that might be helpful to you are invoice scheduling, late fee option, time tracking and expense management. Invoicera is the complete invoicing app that is helpful for every business.

    0
  • Adil Badshah

    Wednesday, March 2nd, 2011 08:54

    8

    Guys i am also a freelance website designer and developer, can you let me know how do i make my invoice to send my client. I want to make a template of invoice and want to use it for my all clients.

    Waiting for healthy reply.

    Thanks.

    0
  • Issa

    Wednesday, March 2nd, 2011 14:14

    7

    I love the last part here which is being on-time…and I hope clients will also pay on time. I think that having a professional-looking invoice doesn’t only speak for you as a pro, but it also helps your client when tax time is near. What matters most is that whichever invoicing software you choose, it must be able to accept multiple types of payment as not everyone likes paying with Paypal. I’ve encountered someone asking for a Google Checkout, haha. Thanks for the tips anyway!

    0
  • Dan

    Tuesday, March 1st, 2011 09:27

    6

    Are you recommending anyone for invoicing solution.?

    0
  • Kung Karl

    Tuesday, March 1st, 2011 02:17

    4

    Brilliant post as usual here at 1WD! Keep it up!

    0
  • bearpig

    Monday, February 28th, 2011 15:12

    3

    I did an article about freelancers invoicing options – never tried Freshbooks, but that’s because i wanted to have my accounts/invoices stored locally and not on the cloud. After trying Billings, Billable and Quickbooks, I came across GrandTotal and have been very happy with it as an answer to the simple quick good-looking invoice issue.

    0
  • Rob

    Monday, February 28th, 2011 15:49

    1

    Is there an invoicing program that can integrate with proposal software?

    0
    • Jared

      Monday, February 28th, 2011 19:58

      2

      @Rob That’s coming up in the an article very soon. There’s plenty that integrate but the two I use are bidsketch and freshbooks. Check em out and be sure to come back for the article soon.

      @bearpig Good thing to point out! I forgot to mention that freshbooks is online only so if you’re into keeping your files locally, there would be other options for that. Thanks for the comment.

      0
    • Tony Oravet

      Tuesday, March 1st, 2011 04:46

      5

      Rob – Blinksale.com has a really nice option for Estimates. If a customer approves the estimate, then you can convert it to an invoice. Pretty nice! We have been using Blinksale.com for a few years now. They use to have a free trial, but I think their cheapest package is like $6/month for a few invoices…worth a try!

      Good luck!

      0
    • NickJ

      Thursday, September 22nd, 2011 00:04

      10

      You can use an app like CurdBee, which has an integrated flow between proposals and invoices.

      0

Comments are closed.

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