THE FREELANCER’S
ESSENTIAL GUIDE
to Billing, Tax Deductions,
and Setting Rates.
Table of Contents
Charge More or Less?

4

#1 Higher Rate = Bigger And Better Clients

5

#2 Understanding Salary Versus C...
Table of Contents
Common Billing Mistakes

14

#1 Remember To Tell Clients What You DID NOT Charge Them For

15

#2 Don’t ...
Claim Your Free 30 Day Trial of eBillity’s Time and Billing Software
#1 Trusted Software to Bill Your Clients
Track time. ...
CHARGE MORE OR LESS?
7 Things Every Freelancer Should Know
About Setting Billable Rates

4
How much should you charge?
One of the biggest mistakes freelancers make is charging less, not more. Here at eBillity we b...
A funny thing happened though. A few people also called me and would ask me—“Why should I pay
you $35 per hour? I can get ...
#2 Understanding Salary Versus Cost
A freelance salary does not directly equate to a similar employee salary. Don’t undere...
#4 You Won’t Always Be Working
We still have a problem with our above example. It’s based on 52 weeks per year. Almost no ...
UNDERSTANDING TAX
DEDUCTIONS

The Top 14 Tax Deductions Every
Freelancer Can Make

9
Tax time can be especially stressful for freelancers: despite paying estimated tax payments throughout the
year, it’s rare...
#4 Job Hunting
Any payments you make to access job boards and other lists — even if they aren’t for permanent jobs — are
d...
#9 Professional Advice
If you find yourself in a situation where you need to consult with a lawyer or an accountant, for a...
If you buy books to help develop your skills (like a guide to HTML), then claim those. Also, if you have
a website with yo...
COMMON BILLING MISTAKES
How Proper Billing Practices Can Help Grow
Your Client-base

14
A huge mistake freelancers make is to not put more thought into their invoicing and billing processes. It’s
important to r...
decided to help out your client by fixing it for free. Or maybe you gave them some free consulting on a new
project.
A hug...
#4 Write an Email After 15 Days If Not Paid
The general rule for billing is that you should send a reminder 15 days after ...
your client wants a website—you can mark-up the cost of the web-developer to your client. The same
with graphic design, IT...
#9 Should You Bill For Training?
If you are new to a task or area of your client’s industry, your inexperience may require...
Claim Your Free 30 Day Trial of eBillity’s Time and Billing Software
#1 Trusted Software to Bill Your Clients
Track time. ...
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eBillity Time Tracking Software - Freelancer's Guide

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Freelancers: read this essential guide that will help you earn more, bill more efficiently and save money! In this guide we offer helpful tips and tricks for billing and client management, and review some top productivity and time tracking software and apps. A must read for freelancers!

Visit http://www.ebillity.com/ for more info on our time tracking software.

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eBillity Time Tracking Software - Freelancer's Guide

  1. 1. THE FREELANCER’S ESSENTIAL GUIDE to Billing, Tax Deductions, and Setting Rates.
  2. 2. Table of Contents Charge More or Less? 4 #1 Higher Rate = Bigger And Better Clients 5 #2 Understanding Salary Versus Cost 7 #3 Know That All Hours Aren’t “Billable Hours” 7 #4 You Won’t Always Be Working 8 #6 You Have To Account For Downtime 8 #7 Factor In What You Want 8 Understanding Tax Deductions 9 #1 Unpaid Invoices 10 #2 Niche Research 10 #3 Meetings At The Coffee Shop 10 #4 Job Hunting 11 #5 PayPal Fees 11 #6 Virtual Assistants And Other Freelancers 11 #7 Your Home Expenses 11 #8 Cellphone And Skype 11 #9 Professional Advice 12 #10 Payments To Non-Profits 12 #11 Your Tax Preparation! 12 #12 Child-Care 12 #13 Auto Insurance 12 #14 Books, Domain Hosting, And Subscriptions 12 #15 Entertaining Clients 13 #16 Your Computer Last Year! 13 More Tax Resources 13 Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com
  3. 3. Table of Contents Common Billing Mistakes 14 #1 Remember To Tell Clients What You DID NOT Charge Them For 15 #2 Don’t Use Vague Billing Descriptions 16 #3 Bill For Travel Time 16 #4 Write An Email After 15 Days If Not Paid 17 #5 Earn Some Extra Profit With Equipment 17 #6 Don’t Pad Time 18 #7 Careful About Billing For . . . 18 #8 Should You Bill For Administrative Work? 18 #9 Should You Bill For Training? 19 #10 Try To Avoid Block Billing 19 #11 Review And Revision 19 #12 Perception Is Reality 19 Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com
  4. 4. Claim Your Free 30 Day Trial of eBillity’s Time and Billing Software #1 Trusted Software to Bill Your Clients Track time. Instantly create invoices. And reduce the busy-work with eBillity’s trusted web-based time and billing software. Find out why over 30,000 monthly users—and thousands of freelancers—use eBillity everyday to help them better track, manage, and bill for time. eBillity was a finalist at the 2011 Intuit App Showcase and is a certified Intuit partner. Ultimate convenience: Invoicing and account management tools: Access eBillity anywhere anytime! Track time, electronically bill and easily custom- Visit to eBillity.com from your laptop or desktop! Use our desktop widget for one-click access! And use our mobile app for iPhone, Android and Blackberry while on the go!” ize invoices Add credit card payment links to your invoices! Quickly create client portals to efficiently manage your receivables! Much more Much more Start your Free 30-day Trial (no credit card required) here. This app is great, keep it coming guys, lovin the updates!! - atlaz34 My experience with eBillity has been a GREAT one! It is an amazing app can log in your times from your computer or cell phone at any time. Solid support from Ebillity on setup. I’ve appreciated their efforts to assist us with new users to the system. - Mark - Vanessa Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 3
  5. 5. CHARGE MORE OR LESS? 7 Things Every Freelancer Should Know About Setting Billable Rates 4
  6. 6. How much should you charge? One of the biggest mistakes freelancers make is charging less, not more. Here at eBillity we believe that setting a proper billable rate is essential for maintaining profitability—and can help to build your client base. In fact, what you charge directly reflects how your client’s perceive your talents and charging a low rate will result in a low quality client. Here are some tips to guide you as you decide on your billable rate. #1 Higher Rate = Bigger And Better Clients Here are two practical examples of why you should consider raising, not lowering your billable rate. A lot of eBillity’s users are freelancers and so we asked some of them to contribute their knowledge to this guide. This first story comes from James, a technical writer in Victoria, Canada, who uses eBillity. Raising Your Rates—a Freelancer’s Perspective James’ story about how raising his rates brought in more clients—and a surprising lesson he learned about using higher rates to get more new business. I first began freelancing in university as a way to earn some extra money. On one popular university job board, you’d have to compete with a bunch of student writers looking for work. It was really crowded and I really wasn’t getting much response. Most of the writers offered their services at about $10-20 per hour. Nobody went higher than $20, as these were mostly university students. I had always heard that raising your rates got you better clients and more work—but I didn’t really believe it. But I decided to test it out. I wrote a very detailed posting about myself, listing my skills, my degree (a BA in English), and the past work I had done. And then I posted my rate as $35 per hour—much, much higher than any other students. It was really surprising—I got a few calls. And one client hired me—and kept me pretty much busy throughout university with different writing jobs. It was a big lesson—people noticed me more and they wanted to hire the best writer, which they thought I was as I charged more than the other students. Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 5
  7. 7. A funny thing happened though. A few people also called me and would ask me—“Why should I pay you $35 per hour? I can get other students that only charge me $20??” This was an unexpected twist for me—it was funny to have people calling me, wanting to hire me, and then me turn them down because I didn’t want—or need—to drop my rates to please them. For me, those calls really illustrate the power of charging more. These people wanted to hire me but they didn’t want to pay. So even though they could hire a bunch of other writer’s at $15-20, they still wanted me. The point is increasing your rate makes you more desirable. And so, I would tell those people “that’s fine, but I do a better job—that’s why I charge more.” A final warning though—if you charge more, you have to deliver professional results. This is what people expect and why people are willing to pay more. They know you cost more, and so expect a better professional product. So work hard to earn your rate. The second story comes from Trenton, a small business owner in Seattle, who uses eBillity to manage his online commercial ‘nanotech’ sealer business. He told us about what it is like from the perspective of an employer, hiring a freelancer. Charge More Per Hour?—An Employer’s Perspective Trenton’s story about how an employer sees higher rates when hiring freelancers. I run a small online business, selling “nanotech” sealers to commercial industries such as specialty timber makers and construction companies. To run the business, I have to hire freelance web developers. When I post a job on Craigslist for a freelance web developer, I get about 100 responses. The hourly rate really varies—you might have one developer at $15 per hour and another way up there, at $150. Personally, I won’t hire the cheaper one as I have found that if you hire someone for $20 per hour it will take him or her a long time to do tasks. So while another person charges $50 per hour, it might take them less time to do a task, and end up costing you less in the long-run in terms of mistakes made and just the length of projects. Rates do influence my decision—a professional probably isn’t going to be interested in working for peanuts, and so I error on the side of caution and hire more in the middle of the curve. Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 6
  8. 8. #2 Understanding Salary Versus Cost A freelance salary does not directly equate to a similar employee salary. Don’t underestimate what you’ll need to earn by thinking a low overhead means you don’t have to account for expenses. Freelancers will pay for their own insurance, they pay additional taxes (in the US at least), and there are day-to-day expenses of running a business (even from home). Don’t think “I earned $50,000 at my day job, so I want to earn the same as a freelancer.” To be in an equal situation to your full-time job, you don’t need to match the salary; you need to match your “cost” as an employee to that employer. Salary is only one part of it. The employer also paid a portion of your Medicare and social security taxes that you’re now responsible for. They put money towards your retirement and or health insurance. They paid for your basic office necessities. They paid your bonuses. Think about how much money it cost that company to hire you to do your job, and that’s what you need to try to match with a freelance income. It may be a large difference. For example, to have all other things equal with that $50k per year job, you may need to earn $70k per year freelancing. Your rates have to account for that. But don’t worry. Clients also know this and they won’t resent you from charging a fair rate. They are getting your services—and for them to hire you from an employer would cost them much more. #3 Know That All Hours Aren’t “Billable Hours” Sometimes freelancers set their rates based on an expected 40-hour workweek. For example, let’s use the $70k per year gross income goal from the above example. Someone might assume they would figure out an hourly fee by dividing that total by 52 weeks per year and then again by 40 hours per week (which comes to approximately $34 per hour). That would be a huge mistake. In reality, you have “working hours” (40 hours per week) and you have “billable hours” (which can be as little as half of your working hours depending on your marketing and administrative duties that will take the rest of your time). Using the same example, and assuming only half of your hours are billable, you have to charge clients twice as much per hour for that same yearly goal – approximately $68 per hour – that’s a big difference). Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 7
  9. 9. #4 You Won’t Always Be Working We still have a problem with our above example. It’s based on 52 weeks per year. Almost no one will work a full week every week of the year. You need to account for time off – holidays, vacation time, sick time, etc. Let’s say in this example then that we’ll account for seven weeks off between holidays, vacation time, personal days, and sick time. We’re now down to 45 working weeks in the year. $70k now gets divided by 45 weeks and then by 20 billable hours per week, to give you an hourly rate estimate of approximately $78 per hour. #6 You Have To Account For Downtime If you’re new to freelancing or independent consulting, you can’t generally assume that all of your available billable hours are going to be filled every week. You’ll very likely have slow times. You should account for this by adding a buffer to your rate – we suggest tacking on 10 percent. That would now take us to an hourly rate estimate of approximately $86. #7 Factor In What You Want All of those things simply help you find out what you need to charge to earn the same as you did in a fulltime job. Anything you want to earn over that now needs to be tacked on. For example, perhaps you feel that you were worth more than your company paid you. Or maybe you want better insurance or more for savings and retirement. If your experience and credentials (not to mention marketing abilities) back up an increase to earn what you want instead of what you need, then by all means, increase that hourly rate. But decide what your time is worth to you before you’re fully immersed in a freelance career, as raising those rates significantly later can be a career-killer for many once you have built up a client base. Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 8
  10. 10. UNDERSTANDING TAX DEDUCTIONS The Top 14 Tax Deductions Every Freelancer Can Make 9
  11. 11. Tax time can be especially stressful for freelancers: despite paying estimated tax payments throughout the year, it’s rare that a freelancer doesn’t still have to come up with some money for April 15 — or come up with a long enough list of deductions. There are quite a few deductions available to freelancers that may not seem obvious when you first sit down with all those 1099s and receipts. But as long as you have the right documentation, you can write off plenty of deductions you may never have thought of. A brief note, this advice is not meant as a substitute for a tax professional. These are very common deductions—but if you have any further questions you should consult a tax professional, which, of course, is tax deductible. #1 Unpaid Invoices Did one of your clients disappear over the course of last year, leaving you with an unpaid invoice or two? The IRS allows you to write off those invoices as bad debts. Writing them off as a freelancer is a little more complicated than for other types of businesses: that invoice must be included in your gross income, which means that you must use the accrual method of accounting (reporting income as you earn it). If you use the cash method, you didn’t need to report an unpaid invoice to the IRS at all. For more information, look at IRS Publication 535. #2 Niche Research Conferences, books and other research-related expenses are deductible. If most of your business comes from a specific industry — like a website designer who primarily creates websites for real estate agents — you can write off research into that area. Conferences, books and other research-related expenses are deductible. You’ll want to hang on to receipts for your research expenses. #3 Meetings At The Coffee Shop Do you head to the local Starbucks whenever you want to discuss a project in person? If you buy coffee for the pleasure of meeting with a client, partner or other business contact, you can write off half of your expenses. It may seem like a small amount, but if you’re a freelancer who routinely uses a coffee shop as a workspace, coffee costs can add up. Keep your coffee receipts and, to make things easier if you have to go back through your receipts later on, make a note directly on the receipt of who you had coffee with and why. Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 10
  12. 12. #4 Job Hunting Any payments you make to access job boards and other lists — even if they aren’t for permanent jobs — are deductible. The same goes for any costs associated with joining a website that lets you bid on projects or other methods of buying leads on new opportunities. You’ll want to hold on to your receipts for any such expenses. If they’re online, either save them as PDFs or print them out. #5 PayPal Fees Businesses are able to deduct credit card convenience fees because they’re a necessary cost of doing business. You can write off PayPal’s fees if you accept payment through that website, no matter how much or how little business you’ve transacted over the site in the course of the year. The easiest way to document those fees is to wait until the end of the year and print out your account history. #6 Virtual Assistants And Other Freelancers Subcontracting part of a project to another freelancer or hiring a virtual assistant can be an easy way for a freelancer to take on more work and make more money — and the expense to do so is tax deductible. You’ll want to document any such transactions carefully so that you can prove that your use of freelancers and virtual assistants is purely a contract arrangement, rather than employment — which you would have to pay extra taxes for. You’ll want an invoice from whoever you work with, as well as a record of when you paid the invoice. #7 Your Home Expenses If you work out of your house, you can deduct part of what you pay towards utilities, insurance and mortgage interest. The home office deduction is one of the more complicated deductions you can take, but it’s worth it. You’ll need to use IRS Form 8829 in most cases to document your use, and you’ll need to know the exact area of your home as well as of the space you use as an office — you’ll figure the percentage of your expenses you can claim based on the percentage of your home you use as office space. #8 Cellphone And Skype According to the IRS, you can’t deduct the expense of the first telephone line in your home, regardless of your use your home for business. However, in addition to any second phone line you might have, you can deduct your expenses for your cellphone (assuming you use it primarily for business) and applications like Skype (if you use the premium version for conference calls). Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 11
  13. 13. #9 Professional Advice If you find yourself in a situation where you need to consult with a lawyer or an accountant, for any reason related to your freelancing, you can write off those professional fees. Documenting such expenses is just a matter of having an invoice or receipt. #10 Payments To Non-Profits While charitable donations are not deductible as business expenses, you can write off payments you make to non-profit organizations. The IRS’ favorite example is paying for an ad in a local church’s directory, but the cost to attend networking events held by non-profits and similar expenses are all deductible as well. You’ll need receipts. And, by the way, just because you can’t write off donations as business expenses doesn’t mean that you can’t write them off at all — they’re personal deductions instead. Not all of the deductions listed above will be available to every freelancer, of course. Because it’s impossible to give universal tax advice, you’ll want to double check to make sure that you qualify for a particular deduction. Better yet, consult with an accountant or tax professional who can go over your specific situation with you. You can often write off the expense of hiring an accountant as another business expense, by the way. #11 Your Tax Preparation! Don’t forget to claim the cost of your previous year’s tax preparation. This includes any fees charged by an accountant and tax accounting software. And your billing software! Claim that! #12 Child-Care If you have to pay for child-care to work, then you can deduct it. #13 Auto Insurance Use your car to travel to client meetings? You can deduct a portion of your auto insurance. #14 Books, Domain Hosting, And Subscriptions Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 12
  14. 14. If you buy books to help develop your skills (like a guide to HTML), then claim those. Also, if you have a website with your portfolio on it or a professional blog, make sure you can those expenses. Also, any subscriptions, including to industry publications (for example, design magazines if you are a graphic designer), software you use such as Adobe, and basically any materials that are related to your skill. #15 Entertaining Clients Took a client for a beer? Save and claim that receipt. This applies also if you take a client out to a game, coffee, or dinner. Our mobile applications let you enter these expenses on the go from your smartphone. #16 Your Computer Last Year! If you forgot to claim that computer you purchased last year, you can also claim it in the upcoming tax year. With bigger claims like this, though, it is best to consult a tax professional. More Tax Resources It’s also worth noting that while these deductions meet the U.S. requirements — other countries have different tax laws. The following sites can at least give you a starting point on your taxes if you’re based in another country: Australian Taxation Office (Business Deductions) UK Revenue and Customs (Small Business Topics) Canada Revenue Agency (Small Business Topics) Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 13
  15. 15. COMMON BILLING MISTAKES How Proper Billing Practices Can Help Grow Your Client-base 14
  16. 16. A huge mistake freelancers make is to not put more thought into their invoicing and billing processes. It’s important to remember that when a client receives an invoice, they experience a bit of pain. The moment when you ask for payment, whether in a restaurant or for a professional service, is always when your customer stands at the greatest risk of becoming dissatisfied. Unfortunately, client dissatisfaction can be pretty subjective. Even if you do a good job, how you bill plays a big role in whether you will retain clients over the long haul. Here’s an example of this. One ad agency owner told us about a freelance graphic designer that worked for them. One day, they asked if the freelancer would design a nice card for one of their clients, who recently had a baby. The freelancer, who has worked for years for them, agreed and created a nice custom card. Later, she sent a bill. The card cost the agency $50. Now, of course, the freelancer was just being accurate—it took 45 minutes to an hour to design, and so she just billed them for her time. But from the agency’s perspective, this was just too expensive—they should have just bought a card or a gift! This freelancer, of course, has billed the agency hundreds of times, and the agency has paid her thousands and thousands of dollars. But this $50 dollar charge was a big deal and a sore spot for the agency. The point is this—always remember that when a client receives a bill, even if they have paid you thousands of dollars over the years, they are always re-evaluating. They are always considering whether you are worth it and your invoicing practices do have an effect on client retention. Does this mean you shouldn’t charge for your time? No. But the following practical tips will help you better develop a process for billing, including guidelines for when and when not to bill. Here are some tips and big mistakes to avoid. #1 Remember to Tell Clients What You DID NOT Charge Them For In the example above, we can understand the situation from the freelancer’s perspective. They probably work all the time for the agency and maybe had to take time on their weekend to complete the job. They deserve the wage! A good way to soften these types of charges is to always remind your clients of the free work you do for them! In the freelance business, it is inevitable that sometimes you simply won’t charge for some work. Maybe there was a last-minute revision that you felt bad for charging for. Or something went wrong and you Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 15
  17. 17. decided to help out your client by fixing it for free. Or maybe you gave them some free consulting on a new project. A huge mistake is to just let this free work disappear into the air. Here at eBillity we recommend that if you do free work for a client you include it in your invoice. You don’t need to bill for it. But do have a description of it and say “I won’t charge you for this—thanks for your long-term business.” If you make a habit of reminding clients when you gave them a break, you are building up equity for the future. Unfortunately, though, your clients probably won’t remember this free work if you don’t mention and document it. So make a habit of showing that you are giving them a break from time to time, being fair, and that you are sensitive to their bottom line. #2 Don’t Use Vague Billing Descriptions Complete, detailed and accurate task descriptions are the easiest way to prevent a client from resenting your bill. Every task description should identify the activity with sufficient detail to assess its necessity and relevance to the project. Along with a detailed description of the task, each time entry should include the date the task was performed, the timekeeper who performed it, the time spent performing. Easy, time and billing software tools like eBillity can simplify this process. Remember that a client might not remember all your hard work. Let’s say you create a brochure for them— and then you send a bill for $2,000 as it took a lot of time. You need to remind them of all the hard work that you completed, including sourcing images, visiting them for feedback, the long emails, their revisions, proofreading, new revisions, and final printing. #3 Bill for Travel Time Have a set rate. Set up minimal fees. A client doesn’t want to pay if you get stuck in traffic. That said there should be an expectation that clients will have to pay you for time spent travelling. Be upfront about your travel time rate as it will force your clients to only have a meeting when it is necessary and keep you from working long unpaid hours. Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 16
  18. 18. #4 Write an Email After 15 Days If Not Paid The general rule for billing is that you should send a reminder 15 days after the invoice has been sent out. This gives your client ample time to process the invoice and cut you a check. Online payments help to automate this process. For example, eBillity’s online payment gateway allows client’s to pay via PayPal or Credit Card via one-click on your invoice. This can help reduce the turn-around time and help you stay-on top of your accounts receivable. After 15 days, you should get a little nervous and monitor the client. Once the invoice is overdue for more than 45 days, consider suspending services until they pay. The rule is to be friendly the first few contacts (day 15 and perhaps day 30), and then become more formal and request immediate payment. #5 Earn Some Extra Profit with Equipment Don’t forget add cost-plus on any equipment you provide the client. Cost-plus usually involves adding 10% for any materials you buy for your client. This is a widely accepted practice and your clients shouldn’t mind. It is done in almost all industries (for example, construction companies add a small margin for any materials they buy). And don’t feel bad doing this—it helps you recuperate the time you spent buying and picking out these materials for your client. So when you add these expenses to your invoice, just mark them up by 10%. Here are some examples: materials they create (such as business cards, brochures, rack-cards), or media they buy, including if you put an ad you created in a newspaper for a client. So if you purchase $100 worth of stock imagery for a client, mark those hard costs up on your invoice. servers and cloud storage, and cables, website templates, and any third-party software they purchase onbehalf of the client. hair extensions, special make-up for an event, or hair products needed for the job). Remember that you can always mark-up other people’s labor as well. For example, if you are a writer and Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 17
  19. 19. your client wants a website—you can mark-up the cost of the web-developer to your client. The same with graphic design, IT support, and video production. Your client does not own your business network: you should control the access to any sub-contractors you work with and charge your client for using those professionals. #6 Don’t Pad Time It may be tempting to inflate or “pad” the time it actually took to perform a task, particularly if you are an efficient worker or if it is a slow month. It is important to ensure that the time you bill for each task accurately reflects the work performed and is commensurate with the importance and complexity of the task. #7 Careful About Billing For . . . Certain expenses should never be billed to the client, particularly those that are part of your overhead. A good rule of thumb is to look through the tax deduction section and be careful to not bill for anything that can be deducted. The government allows you deduct expenses because they are part of the cost of generating a profit. As a result, a client would be very unhappy, for example, to see you are billing them for a long-distance phone call with them as an expense. This type of expense is part of your overhead and you are responsible for covering that cost. This also applies to tools and software you need to do your job. For example, online marketers need certain software to analyze social media—but if you need this to perform your job, this should not be billed to the client. You wouldn’t want a dentist to bill you for using her X-Ray machine or for a carpenter to bill you for her new drill. Be careful about just adding expenses to your client bill and be upfront about what they are responsible for at the beginning of your relationship. This is why, as we stressed in the first section, it is important to charge a healthy rate. Your hourly rate has to cover your expenses and other work that you won’t be able to bill for. #8 Should You Bill For Administrative Work? Freelancing inevitably involves administrative and clerical tasks. Most clients these days will not pay for clerical tasks – such as typing, filing and photocopying – or administrative functions such as training, invoice preparation, or introductory research. Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 18
  20. 20. #9 Should You Bill For Training? If you are new to a task or area of your client’s industry, your inexperience may require extra time to complete the project. Clients are becoming increasingly intolerant of inexperience and are less willing to pay for the costs of training a new freelancer to “get up to speed” on job. Should you bill for reading materials, going through their website, and learning about their product? It is up to you. But just be conscious that the client might not see this as “billable” and would expect you to cover that investment. #10 Try to Avoid Block Billing Billing time for multiple tasks in large blocks is another red flag for clients. You should itemize each task separately with a corresponding time and charge for each task. Itemized time entries enable the reviewer to better ascertain the appropriateness of the time spent in relation to the significance and complexity of the task. eBillity makes it very easy to itemize each task—and our time and billing software comes with a free 30-Day Trial. Beautiful pitch wasn’t it? #11 Review and Revision Your client may question why you billed 43.2 hours reviewing and revising a brief. Perhaps the brief involved multiple, complex issues and extensive research. Whatever the reason, vague and perfunctory terms like “review and revision” do little to inform the client why the review merited a week’s worth of time. Instead of “review”, words such as “evaluate,” “analyze,” “assess” or “re-draft” connote more thought-provoking, and thus time-consuming, tasks. #12 Perception is Reality Don’t underestimate how the format of your invoice might influence your client’s perception of you. Using a Word Doc or basic Excel sheet to create your invoice might be easy, but it does seem amateurish. Again, eBillity offers a free trial of some pretty awesome time and billing software. You can get those invoices looking pretty, give you client their own personal online portal to view and pay your invoices, and track and manage projects from your smart-phone. You can start your free 30-Day Trial Here http://www.ebillity.com (no credit card required). Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 19
  21. 21. Claim Your Free 30 Day Trial of eBillity’s Time and Billing Software #1 Trusted Software to Bill Your Clients Track time. Instantly create invoices. And reduce the busy-work with eBillity’s trusted web-based time and billing software. Find out why over 30,000 monthly users—and thousands of freelancers—use eBillity everyday to help them better track, manage, and bill for time. eBillity was a finalist at the 2011 Intuit App Showcase and is a certified Intuit partner. Ultimate convenience: Invoicing and account management tools: Access eBillity anywhere anytime! Track time, electronically bill and easily custom- Visit to eBillity.com from your laptop or desktop! Use our desktop widget for one-click access! And use our mobile app for iPhone, Android and Blackberry while on the go!” ize invoices Add credit card payment links to your invoices! Quickly create client portals to efficiently manage your receivables! Much more Much more Start your Free 30-day Trial (no credit card required) here. This app is great, keep it coming guys, lovin the updates!! - atlaz34 My experience with eBillity has been a GREAT one! It is an amazing app can log in your times from your computer or cell phone at any time. Solid support from Ebillity on setup. I’ve appreciated their efforts to assist us with new users to the system. - Mark - Vanessa Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com 20

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