Cash Flow Control - Tips To Keep Your Freelance Business Profitable

While worrying about getting clients and constantly working under deadlines may not drive you crazy, dealing with money issues can be demoralizing.

Let’s face it – the minute you decide to become a solo business owner, you’ve given up the regular pay check idea.

It’s not uncommon for clients to pay you 2 months after the project has been completed. Worse yet, some may even forget to pay or try to negotiate a better deal afterwards. Trust me – this is not pleasant!

But there are some simple steps you can take to minimize the negative impact of a few bad debts have on your cash flow control.

After all you need to pay your bills and take care of your loves ones too. That’s what business is all about.

1- Pick your clients carefully

I wish we all had a magic crystal ball to tell a good client from a bad one, but since we don’t have one we need to carry out our own due diligence.

Make sure who you are dealing with. Talk about the payment terms before you start working on the project. Keep in mind that some large companies may have a real slow processing time for payments.

But in any event it shouldn’t take longer than 2 months. Keep a good record of you past clients to include the initial contact, payment terms agreed upon and any complaints or problems they may have.

Do not accept any new assignment if there’s been an unsolved debt problem for an extended period of time.

2- Try to create multiple sources of income

When you are on your own, it’s extremely important to maintain a positive cash flow control. Many translators complain that they are in the wrong business.

The truth is – cash flow issue is not unique for translators. It can be a problem for any business. But as a solo business owner, you are responsible to mitigate the damage that late payment or non payment has on your overall business profit.

Try to bring different sources of income. For example, offering regular virtual assistant service to businesses combining your language talent and other administrative skills may bring your regular income.

Clients usually pay in advance. See virtual assistant jobs here. Writing a book or ebook not only can help you establish an expert status, but also earn some reoccurring income.

Keep an open mind and never stop looking for new income ideas.

3- Routinely deal with late payments and non payments

If you client failed to send you a payment within the agreed time frame. Send a friendly reminder by phone or by email. Do not overreact.

This is what I would say, ‘ Hi xxxx, I’ve noticed that your payment hasn’t arrived yet. Is there any problem with the invoice? If there’s anything I can do for you, please let me know.”

Usually at that point, a client would promise to pay by a certain date. Or if there’s some issue with the service, he’ll have a chance to discuss with you. That way he remains his dignity and you have a better cash flow control.

If he fails to pay again, send a firm but courteous letter to ask for the payment. You may also want to attach a copy of the invoice.

Make sure you date each document for future reference. If that doesn’t work send another letter in 2 weeks. A client is more likely to come up with the payment if your collection effort is consistent.

Do not threat to take someone to court or debt collection agency if that’s not your intention. If you say it, you have to follow through. Otherwise, you’ll lose your credibility.

4- Take money issues seriously

When you deal with a bad debt it’s easy to get frustrated and lose track of your focus – your cash flow control. Do not take any debt issue too personal. It happens in any business. Stay polite but assertive.

Most people are well-intentioned and I’m saying this from almost 10 years of experience. You just need to keep the communication open and follw some debt collection strategies.

Do not use humour or try to keep it light hearted when you talk about payment issues. You want to look and sound serious.

5- Leave your options open

Whether or not to take the debtor to the court or a collection agency is totally up to you. You have to decide if the amount of money is worth your time and effort.

You should always have a bottom line number in mind. If you decide to cut the loss, learn from the experience and move on.

Having a good cash flow control is the key to a successful business. Take care of your money and your money will grow.

Want more tips to run a profitable freelance translation business? Sign up for my free ezine:

4 pricing strategies to charge more and get it.

Boost your income potential with this unclaimed money list

80 20 rule - things you must do to generate more income for your translation business

Easy online money? Tips for translators to bring in additional income from the internet

How tofile taxes online for free in Canada or U.S.

6 tax saving tips you must know as a freelancer

4 things I've learned from a secret shopper scam experience

Home business low start up - how to excel as a business owner from being a freelancer

Pay scale for jobs - how to get top pay for your language skills


From Cash Flow Control To Basic Financial Concepts
From Cash Flow Control To Translation Jobs Homepage