Image licensed via Shutterstock / DimaBerlin Going freelance can be a scary prospect, as there are so many unknowns. Will you find enough clients to keep the wolf from the door? How much will you earn? How often will you get paid? The good news is that thousands of creative freelancers have been through the same thing. So we’ve teamed up with Xero , online accountancy software that helps freelancers automate and manage their finances, to share some of their keenest insights. 1. You’re running a business Many people think that switching from being a staff member to a freelancer means getting paid differently. But it’s so much more than that. As motion designer Thomas Colony points out: “When you become a freelancer, you’re not just taking on one role, you become the project manager, the accountant, the CEO, the client manager… freelancing is running a business.” To put it in day-to-day terms explains designer and director Luke Tonge , “You spend almost as much time on admin as you do on the work itself. Calls. Zooms. Emails. Invoices. Presentations. The list is endless.” As designer Nick Clement says: “You’re going to be running a business, so you need to get an accountant. Sort your pension early. Understand tax and future planning. Save 30% if you can for tax. Get a deposit, scope of work and contract every time.” It’s a lot of responsibility, but online accounting software can help. Xero , for example, allows you to keep track of all the income, outgoings, receipts and other financial records within one easy online dashboard that you can access anywhere from your mobile, tablet or laptop. And your accountant can log in to your Xero account and get all the information they need from you straight away, saving you both time and effort. 2. Your income won’t be consistent Even though you’re earning more as a freelancer than an employee, it doesn’t always feel like it because there’s no consistency when payments actually come in. As designer James Stone notes: “The work you are doing now is likely your wages in three months. So don’t think that just because you have a buffer now that you can relax. Because in three months, you’ll have a shortfall.” Tax payments at the end of the year can be particularly terrifying. So as designer and illustrator Si Heard recommends: “Over-save for tax when you get paid for each project. With a bit of luck, you’ll have a bank of savings at the end of the tax year!” Again, online software can remove a lot of the stress here. Xero , for example, makes it easy to generate and send quotes and invoices, and monitor payments, not to mention chasing up late payers automatically. And to smooth things further, you can choose to connect it to your bank and payment services and integrate it with apps like PayPal and Stripe. 3. The need for self-promotion never ends Even if you’re getting a steady supply […]
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