The complete guide to getting paid

One of the paid hardest parts of running a client service business or freelancing is getting paid. Figuring out what to charge, how to accept payments, chasing late payments, and handling issues can be really challenging. These things take up your time and energy (and they’re not billable), and when things go wrong it can negatively affect your cash flow and the future of your business.


This BravelyGo Guide is here to help you with every aspect of getting paid for your hard work, from setting your rates with confidence to preventing late payments to handling clients who won’t pay like a pro.

What’s covered in this guide:

Chapter 1: Setting rates and prices

More of us are diving into the world of self-employment. One recent report from Upwork and Freelancers Union showed that freelancers are forecasted to become the majority of the U.S. workforce in the next 10 years. And millennials already have a head start—almost half of these workers are already freelancing.

As more nine-to-fivers take the leap into freelancing or running their own business as a consultant, one of the early obstacles they often face is putting a monetary value on their products or services.

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Differentiating between cost and value

The first step toward setting your rates and prices is understanding the difference between cost and value. These two concepts can help you understand how to set rates that not only pay your bills, but potentially turn a profit.

Here are the definitions, boiled down to their essence:

  • Cost: What you spend to produce your product or service.
  • Price: Your pay rate. This is the financial reward from a client or customer for providing your product or service.
  • Value: How much your product or service is worth to your client or customer.

For example, a freelance graphic designer creates a logo for a client. Stock images and vector images cost $50 and it takes 15-20 hours to create the logo, costing $75 an hour in labor. The total cost is $1,125-1,500, but the logo is far more valuable than that to the client.

Calculate your hourly rate

If you’re used to working on salary, you may not have any idea what your services are worth per hour. Although calculating your ideal hourly rate will take a few different formulas, never fear—we’re here to walk you through the math.

Step 1: Start with your target income in mind

Start with the end goal in mind. How much money do you want to make in a year? Do you want to replace your current full-time salary? Or maybe you want to increase this year’s earnings compared to last year?

For example, let’s say you’re making the jump into full-time freelancing and you want to keep making your current salary of $80,000.

Step 2: Factor in the costs of doing business

Unfortunately, self-employment or running a small business comes with more costs. You’ll likely have far more overhead as a freelancer than you do as a salaried employee.

As such, you’ll have to tally up the expected costs of running your business and factor those into your desired income. While every business and industry has unique costs, some of the common ones you’ll need to consider.

Chapter 2: Invoicing clients

Even though invoices can be time-consuming to create and send, they are integral to running a small business and keeping your cash flow in ship shape. Not only do invoices help you get paid appropriately and on time, but they can also help you keep accurate records of the products or services you provide.

Invoices are also still the top way freelancers and consultants get paid. A Billentis report estimated that there were 500 billion global invoices created in 2015—and that number is only expected to grow as more nine-to-fivers take the leap into self-employment.

What is an invoice?

Invoices are essentially itemized lists of the products or services rendered to a particular client over a period of time. Generally, invoices will include a basic description of your product or service, the cost of each plus the total, and basic payment terms.

The benefits of invoices

Businesses of all sizes and across industries use invoices as a basic template to prompt payment from clients and/or vendors. An invoice is equivalent to sending a bill—your vendor or client should know at a glance what they owe you, what they’re paying for, and when payment is due.

How to create an invoice

Freelancers and consultants can use a variety of methods to create invoices. What you use will likely depend on your technical skills, available resources, and the unique needs of your business.

Some of the top tools you can use to create invoices include:

  • Invoicing software: If you’re looking for more bells and whistles than a simple, pre-made template, then I’d recommend leaning on cloud-based invoicing software. With software, you can add your own branding to invoices and automate tasks like recurring invoices and emailing out payment reminders to delinquent clients.
  • Pre-made template: Run a quick Google search for “invoice templates” and you’ll find a wealth of already existing templates that make it simple to create an invoice. The creators have done all the work for you—you just have to update these templates to include your relevant business info.
  • Word doc: It’s easy to upload an existing template into Microsoft Word and then customize based on your client, product/service quantities, and payment terms. And while there are a wealth of pre-made templates floating around the web, you’ll still need to fill in all your details manually—which is cumbersome and time-consuming.
  • Spreadsheet: Whether you prefer Excel or a handy Google Sheet, an old-fashioned spreadsheet can get the job done. While there are more efficient ways to create an invoice, if you’re in a pinch, a basic spreadsheet will do just fine. Spreadsheets make it simple to create charts to itemize the products or services you’ve rendered for clients, and formulas make it easy to add up all your individual items without having to manually do the math yourself. And while a spreadsheet will work in a pinch, working with spreadsheets can be frustrating and tedious because you’ll still have to manually fill in your details and can’t access any automation functionality.

Chapter 3: Accepting payments from clients

When it comes to getting paid for your products or services, small business owners have never had more options than they do today. From online to mobile payments, new and better options abound—making it easier and more convenient than ever for customers to pay.

With all these options, how’s a business owner to know which payment methods to accept? Your customer base and the type of business you run will have an effect on which payment methods you should make a priority. In our increasingly digital world, businesses will benefit from accepting payments online. But what does “online payment” mean? What does it mean for your business?

In this chapter, we’ll dive into:

  • The different ways your business can accept payments
  • The pros and cons for each
  • Things to consider while making your decision
  • And, finally, our recommendation for how to accept payments

Let’s dive in!

Accepting payments online

In today’s marketplace, accepting online payments can feel like a given, but for small business owners, there’s a lot to consider before you get started.

From PayPal to Stripe, Venmo, and other payment processors, business owners and their customers alike have a lot of choices when it comes to paying and accepting payment online. No matter the provider, they all enable your customers to pay online using a credit card or directly from their bank account.

Let’s dig into what each of those means and the benefits they offer your business.

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Credit and debit cards

Payment cards (credit, debit, and prepaid) are far and away the most common way we pay for things online. In fact, as much as 75% of consumers prefer to pay with their credit or debit cards. If that statistic isn’t enough to convince you to accept credit and debit card payments, let’s look at some of the pros and cons they can hold for your business and your customers.

Benefits of accepting debit and credit cards
  • Convenience for customers. The chief benefit of accepting debit and credit cards is their convenience. They make it overwhelmingly quick and easy for customers to pay, whether that’s online or in person. If your customers are other businesses, accepting credit cards can help grease the wheels of both their cash flow and yours. Not to mention, for many brick and mortar businesses, you risk losing out on customers who don’t carry cash anymore.
  • You get paid quickly: On top of that, credit and debit cards ensure you get paid quickly, too. Since customers can pay right away online, you can have that money in your bank account in as little as 2 business days.
  • Professional image: If customers are going to do business with you, it’s vital that they trust your business’ professionalism and legitimacy. Accepting credit and debit cards is one more way you can let customers know you’re a real business they can trust.
  • Fees:

To accept credit and debit cards, you’ll work through a payment processor, and they will charge your business a fee. For most payment processors, credit card transactions incur a small fee of $0.30 plus 2.9% of the transaction value.

Final thoughts

While it’s impossible to prevent every late payment or unpaid invoice, there are a number of steps you can take to keep payment issues less likely and minimize the cost to your business.

Putting proper contracts in place, keeping good records, invoicing on time, and understanding payment scams and charge backs are all ways you can take control of customer payments—and your cash flow.