Freelancer: A few tips for better cash management
Being a freelancer requires being a good manager in order to ensure good cash flow. Here are 5 tips that you absolutely must not ignore!
1/ Control your expenses
Being a freelance means that you have to be your own accountant. You need to check how much you earn and what you spend.
For this there are secure applications that will be directly linked to your bank and will allow you to view your money inflows and your expenses.
Even if you call on an outside accountant, it is essential to maintain control over the inflows and outflows of money. This allows you to manage your budget as well as possible.
2/ Two crucial points in managing your cash flow
1) Establish a cash flow forecast
In terms of cash management, it is essential to start by establishing your cash flow forecast.
Establishing a provisional cash plan as a dashboard allows you to visualize your cash flow and anticipate your cash budget in the short or medium term.
To do this, you can:
2) Offer yourself real cash monitoring
The goal is to be able to permanently adjust the cash flow forecast that you have just built with your actual movements.
To do this, you can go through the manual entry of your purchase invoices or the import of actual movements (sales invoices or cash movements) then a tally of what is "paid" (and therefore banked) compared to to what is "known" (i.e. your customer and supplier invoices).
3/ Anticipate your taxes
Taxes are often synonymous with headaches when you are an employee. When you become a freelancer, they can become a real hassle depending on your personal situation.
Depending on your status, your scheme, your method of payment… you will need to understand, anticipate and set aside your taxes. Make the right choices according to your situation! Here too, it may be useful to get help from an accountant.
Again, your dedicated bank account is your best friend. If your taxes, carefully calculated in advance, never come out, you will not have any unpleasant surprises at the end of the year.
4/ Create a budget
A budget ? Yes, it will seem obvious to those who have been freelancers for a long time, but not necessarily to novices.
If having a well-crafted budget is already important when you are an employee, it is all the more so when a fixed sum does not fall into your bank account each month.
This is a fairly basic and popular budget rule that breaks down as follows:
5/ Get paid by your customers
As a freelancer, it is important to enforce payment deadlines. Late payments and unpaid bills have an impact on your cash flow.
There are ways to avoid these defaults. Tools are available to help and support you during your projects.
One of these tools is Spayce, it will allow you to work with peace of mind in the certainty of not knowing any more late payment or unpaid!
6/ Respect its financial commitments
As a business owner, you may need to obtain loans from a bank to optimize your cash flow.
It is necessary to open a specific account, dedicated to your activity and not to use your personal account.
But first, you must be a good payer and manager: improve your credit score. The higher your score, the better the loan terms. Interest rates are lower and the bank is ready to give you more.
In other words, the more you respect your commitments to a bank, the more it will trust you and support you with better loan conditions for your projects.
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Avoid late payments and unpaid bills with Spayce.