Money Issues and How Not to Overreach Oneself: Freelance Writing Pay

Collecting payments has always been one of the most difficult things about the freelance industry. According to recent studies in New York, more than a third of self-employed individuals were paid late in the previous 12 months. An estimated 14 percent worked for at least one client who never paid them. To run a profitable business, freelancers must learn how to set a fair rate, send out invoices and collect their payments.

Get an Escrow Account

An escrow account is a freelance writer's best friend. These accounts allow the client to put money in the account. Once the writer sees that the account is funded, they can complete the project. Afterward, the client just has to release the funds to the writer. Unless the writer allows it, the funds cannot be withdrawn by the client. Likewise, the client does not have to worry about a writer running away with an upfront payment. Altogether, escrow accounts are an excellent option for any serious freelancer.

Use a Middle-Man Site

If setting up a specific type of account seems difficult, writers can use a middle-man site. These websites cater to writers and provide an increased level of protection. Although the site will normally take a cut of the payment, it affords the writer with an increased level of payment security. Additionally, these sites can be a great way to gain new clients.

Stay Organized

Even when a client is ready to pay on time, they need to have an invoice before they can submit a payment. For this to occur, the freelancer must be organized. A special calender or spreadsheet can be used to track all completed projects. On the calender, the writer should note when the invoice was sent out. They should add another note two weeks later that reminds them to follow-up on the invoice.

Save 20 Percent of Everything

Writing will always have boom and bust cycles. As a self-employed worker, the writer must rely on their own skills and foresight to stay afloat during slow periods. When business is booming, writers should set aside 20 percent of their earnings. These extra funds will help pay the bills when work is slow. In addition, writers should look up the amount that they will pay in taxes. Self-employed workers often pay 25 to 40 percent of their wages in the form of taxes. The only way to avoid a sudden shock in April is to save in advance for these costs.

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