Freelancers are individuals who like to work independently, from a place that is convenient to them and are not under a company's payroll. They take up various assignments, projects and have various clients.
The pandemic has brought about a huge shift of people from traditional 9-5 jobs to freelancing. 59 million U.S. workers performed freelance work in the past 12 months, and the trends show an increase of 2 million people year over year.
Millions of freelancers across the globe will agree that timely payments for their work are necessary to sustain themselves. Freelancers working from home or taking up gigs and working from offices, studios, or sets want their payments on time.
How to get paid on time?
Company employees get their salary in the first week of every month as they are on the payroll of the company. As freelancers are hired outside the company they are not on the permanent payroll of the company. They have to send an invoice to get their payments.
Many freelancers especially youngsters who have just entered this market send invoices via simple texts or excel sheets. Let me explain why sending an invoice is 10x times better than just sending texts or excel sheets.
1. Shows professionalism
Sending an invoice with your name, contact details, logo, in a proper format that is easy to understand shows how professional you are. It brings value to your name and shows that you just don't work for the money. It helps in brand building and ensures that companies take you seriously.
2. An invoicing system organizes all your invoices in one place
Rather than having 10 excel sheets for all your clients, you can organize all your invoices in one invoicing system. You can choose the client's name and the system will automatically show you the invoices against the client. You can create endless customers and make numerous amounts on invoices and still keep a track of them all.
3. An invoicing system also provides you with a receipt software
Along with an invoice, an invoicing system provides you with an option to send a receipt to acknowledge that you have received the payment.
Rather than making a receipt every time, an invoicing system provides ready templates and all you have to do is select the invoice number and leave the rest on the software!
This helps in avoiding confusion on whether the payments are due or not.
4. It helps you keep a track of all the dues
With an invoicing system, you do not have to worry about remembering which client has cleared their dues and which one hasn't. The system will keep track of it.
You can also send reminders to your clients via the invoicing system. With just one click the software automatically sends an email to the client and reminds them about the payment.
5. Helps you in calculating your tax
But do freelancers have to pay tax? The answer is a big fat YES. In India according to the Income-tax Act, any income that is earned by displaying your intellectual or manual skills is income from a profession. This income will be taxed as "Profits and Gains from Business or Profession.
In other countries too freelancers are obliged to pay the taxes according to the law.
Now GST is to be collected by freelancers from their clients. But not many are from the commerce background, and know how to calculate GST!
No need to worry. An invoicing system automatically calculates the GST and other taxes and shows you the total.
Finally, the most crucial benefit of Invoicing Software is that it saves time.
Time is especially valuable for freelancers and solopreneurs. Every minute counts, and finding strategies to free up extra time is critical to running a successful business.
Writing invoices in Word or maintaining your money in Excel can be time-consuming and unproductive in terms of speed and efficiency.
Invoicing software allows you to track, record, write, and send invoices in minutes, without having to update several Word or Excel rows and columns.
Within seconds, all details and statistics are automatically calculated, recorded, saved, and transmitted to the appropriate app or document.
So which Invoicing software I should use?
The answer to that is software that you are comfortable with. There are many software available online.
At ShimBi Labs, we have a mission and experience working with and helping freelancers to grow. We have created specialized Invoicing Software for freelancers and small businesses. You may wish to take a FREE trial of the Shimbi Invoice.
Also must read - Why excel is unfit for generating invoices