Managing your finances and managing your time are key parts of freelancing. Working solo means you’re short on time and freelancing income is not particularly stable at the best of times.
So it’s important you’re getting fairly paid for all the effort and time you’re putting in. If you’re not, you’re going to have to take on more work to make enough money. This just leaves you burnt out and isn’t the best way to grow a business.
Track billable hours
Billable hours are hours that you spend on client work that you can actually charge your client for. Other hours include the time you spend looking for clients, doing your accounts, admin or any other business.
Make sure you’re tracking all of your time by noting down hours that you’re spending not just on work but also on communication, research and preparation. Note down how long it takes you to market your services, find clients and manage your accounts.
The chances are all of these things are taking more time than you think but aren’t necessarily earning you money. If you can cut down the time you spend on other tasks, you can free up more time for client work and billable hours.
You might find that you’re underestimating the amount of time you spend working. When you have a more accurate picture of how much time you’re putting into your work, you can then bill more accurately.
Track correspondence
Similar to the point above, it’s important to remember that a lot of freelancers undercharge for their services. One of the areas they do this in is with correspondence. While you might be tracking the hours you’re spending doing the work, a lot of freelancers forget the time it takes to correspond with the client. This could be in the form of emails, phone calls or video calls. Whatever it is, you’re still doing client work and should be able to charge for it.
Most freelancers won’t bill for this separately unless you’re providing consultancy services. Just include it in your fee and make sure that it’s high enough to cover the time you spend doing this as well as the time you spend on the work too.
Become more efficient
A key part in making freelancing a success is to become more efficient and spend less time on non-billable hours. When you start tracking your time you can also see where you’re wasting it. This will help you to change your habits and use your time more effectively. Any time that you free up is time you can then spend on billable work, meaning you can increase your capacity for higher earnings.
Charging per hour
The problem with charging per hour is that all the hours you spend on making your business work are not hours you can bill for. Unless you’ve already taken them into account as part of your hourly rate, you could be losing out.
The other problem is that the better you become at your job, the less time it’ll take you to finish work. This is great news for the client but all it means for you is that you can’t charge as much if you’re billing per hour.
Shouldn’t you be getting more money the better you become at your job? This means that a lot of more experienced freelancers won’t charge per hour and will instead come up with project fees that are broad enough to cover everything. However, monitoring your time is still important to see how much you’re spending on tasks that earn you money versus ones that don’t.
How do you track your hours? Have you ever realised you’ve been missing out on billable hours? Let us know your thoughts.
