How to manage your freelance cashflow

04. Chase payment regularly

One of a series of illustrated New Year's Resolutions collected via social media.Linzie Hunter NY Resolutions, by Linzie Hunter

While FreeAgent can automatically notify clients of overdue invoices, Gebbie fears that it could look "spammy", so she prefers to do the chasing herself. "I write invoices as soon as I've finished the job," she says. "Once a week I check payments and chase outstanding invoices. If they're really late then I'll start to chase every couple of days."

Award-winning hand-lettering artist and illustrator Linzie Hunter is another convert to online systems, in her case Wave. As a former "shoebox and Excel spreadsheet" user, Wave has freed up a lot of her time.

"Having a cloud-based system means that I can keep track of payments and invoices easily wherever I am. My favourite feature is the ability to link it to your bank and PayPal accounts, so I no longer need to enter everything manually. It's also good at showing you exactly where you are financially."

05. State clear payment terms

Three fashion illustrations by Willa Gebbie

Tempting as it might be, one feature Wave and FreeAgent don't currently offer is the ability to send drone strikes after late payers. Elly Walton is unusual – "I've been lucky not to have had a non-payer" – but stresses the value of clear payment terms.

"30 days is reasonable," she says. "As soon as that date arrives, start chasing – as politely as possible, of course."

Willa Gebbie agrees. "Sometimes clients don't pay on time, but often that's because of the finance department rather than the art director… it's probably quite embarrassing for them."

06. Settle late payments nicely

A hand-lettered and illustrated Label for Noted, by Linzie Hunter

Going in all guns blazing is never a good idea, but if you're suffering from acute late payment or non-payment, then the Late Payment of Commercial Debts legislation enables you to charge interest and penalties for non-payment. That can be the nuclear option, however, and it's always best to try and settle late payment nicely first.

07. Be prepared

Stickers and packaging for Peaceable Kingdom by Linzie Hunter

Our illustrators have all experienced the ups and downs of freelancing. What hard-won advice would they pass on? "If you're only just going freelance, make sure you read up about how self-assessment works and make sure you understand about paying tax on account," Linzie Hunter advises.

"Otherwise it can be a bit of a shock to find that you have to pay an extra chunk in the first year. And get used to saving every receipt in your wallet automatically from the start."

Willa Gebbie agrees. "Even if it'll be some time before you start paying tax, you can offset the set-up cost of your business against future tax. That's a really useful opportunity to take."

Keep your work money and play money separate, Elly Walton counsels, recommending that you put a percentage of each payment into a separate account. "I think if all payments went straight into one account, hoping that by the time the tax bill comes around I'll still have the money to pay it is a risky strategy." We can say from painful experience that Walton isn't wrong.

Words: Gary Marshall

This article first appeared in Computer Arts 236: the freelance issue – found inside the Computer Arts app.

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