Freelancing has been great, but I’ve come to realize that I’m not as savvy with financial planning as I thought. I manage invoices and expenses, yet concepts like cash flow and tax prep are daunting.
After a tough month with late payments from clients, it hit me: I really need to step up my game when it comes to the financial side of my business.
Been there with the late payment chaos. Here’s what actually works day to day:
Emergency fund first
Track the basics
Payment strategies that work
The tax thing gets easier once you find a rhythm. I just dump all receipts in a shoebox and sort them quarterly. Not fancy but it works.
Most important thing is knowing your minimum monthly number. Once you know you need $3000 to keep the lights on, everything else becomes clearer.
Cash flow is crucial for small businesses. Set clear payment terms from the start. I ask for a deposit on larger projects and keep tight timelines. If payments lag, I enforce late fees and halt work until I see payment. Most clients realize you mean business. Also, maintaining a buffer of three months’ expenses helps weather tough times. Focus on collecting overdue invoices when cash flow isn’t strong.
Late payments make it tough to manage cash flow.
Keep invoices simple and get paid fast. That’s about all I worry about these days.
Those late payment months are brutal. I learned this the hard way after scrambling to pay rent when three clients all paid 30+ days late at once.
What saved me was creating a 13 week rolling forecast. Just list your expected income and expenses week by week. Update it every Friday. Shows you exactly when cash will be tight so you can chase payments early or delay non critical expenses.
For taxes, I keep a simple notebook where I write down every business expense as it happens. Gas, software subscriptions, office supplies, everything. Takes 30 seconds but saves hours during tax season. Way easier than digging through bank statements later.
Also started requiring net 15 payment terms instead of net 30. Cut my average payment time from 35 days to about 20 days. Clients who push back usually aren’t worth the headache anyway.