At the start of the year, I posted some advice on how I use Trello to track my project work. Since then, those posts have been referenced several times by other freelancers and contractors, and they’re some of the most-read on my site. As such, I’ve added a Freelancer Advice category to help me share more information I’ve found useful as I continue my education as a full-time freelancer, contractor, and business owner.
And one of the key aspects of owning a business is making sure you get paid for your work, which comes in three steps.
Know Your Value
There are two different ways you can approach this: by determining how much you want to make and learning how much you can make.
The first is pretty straightforward: start with your desired yearly salary, add in all your expenses as a freelancer (including self-employment taxes!), divide it by the number of hours you plan to work in a year (1,800 to 2,000 is a good estimate), and divide. Simple!
Of course, you might end up charging too much or (perhaps more often) too little for your services. Doing some searches for “living wage” with your field and state or country of residence can give you some numbers to consider. Then you can use that number as if it were your desired salary above.
For writers in particular, there’s an extra step, as many clients charge by the word, not by the hour. You’ll need to sort out how many words you can write in an hour. Comparing that to the amount of words targeted will tell you how long a draft will take. Multiply that by 1.3 to 1.5 to account for planning, research, and revision, and that gives you how many hours you’ll likely work on the project. From there, you can calculate a rough “hourly rate.”
Now you have an idea of how much you’re worth, and you’re talking with a potential client about work. Pay discussions are a part of being a freelancer, even if that “discussion” isn’t necessarily with the client directly.
Wait, what? How can you discuss something without… you know, talking about it?
Well, sometimes, the client isn’t open to discussion of the rate — for example, there may be a fixed payment (common in writing assignments), or you have applied for a job with an hourly rate up-front (common on freelance sites like Upwork). If the job is more than your usual rate, there’s obviously nothing to say except “Where do I sign?”, but more likely it’ll be lower. In that case, you’ll have to decide for yourself if the opportunity offers you added benefits. These can be things like access to more clients, free publicity or marketing by the client, or learning a new skill that will help you in other areas.
If the client is open to negotiation, though, you’ll need to explain why the rate you’re suggesting is important. Focus on why it’s better for them, how your work will improve their business or have a positive benefit on their bottom line. Ask them what their budget constraints are. And always aim high — you’ll likely be surprised at what they’re willing to pay. However, if the conversation results in the project being offered at a lower rate, use the paragraph above to decide if that lower rate is acceptable to you.
Finally, if you can’t come to a fair compromise, it’s okay to walk away. Not all opportunities are a good fit, and it’s better for you (and for your would-be client’s perception of you) if you politely decline. It’s entirely possible that a later opportunity with that potential client will work out better, and clients do talk among themselves.
Handle Your Invoice
Now the job is done, and you have to send out an invoice in order to get paid. I highly suggest Wave — it’s an automated invoice system that’s free and allows you to easily track a number of invoices. It also allows for clients to pay by credit cards (for a percentage), and it can send automated reminders over email when the client is running late. I even have one client that I charge the same amount every month, and Wave handles it without me having to do a thing.
On the invoice, you need to know if you agreed to full or prorated hours. In my experience, it’s typical for hours to be prorated in fifteen minute increments, but some clients are fine with full hours. It’s the difference between working ten hours and five minutes, and knowing if you should charge for 10.25 or 11 on the invoice.
Many clients offer to pay via services like PayPal. If you go this route, clarify ahead of time who will handle PayPal charges. Others choose to use physical checks, direct bank deposits, and even credit cards. You can handle all of these with a personal account, but if you get a lot of bank deposits or checks, you might want to look into a business account.
When (hopefully not if) your client pays, make sure to send them a receipt. A simple email confirming that you received payment and attaching a copy of the paid invoice in question helps immensely down the road, particularly if this is a client you have a lot of invoices with. Both sides being able to confirm that you were paid for May and July but not June is a huge help, and gives your client assurance that you’ll only ask for payment for work you actually did.
Now, enjoy the benefit of your labors before you start on the next project!