ebillity time tracking software - freelancer's guide

21
to Billing, Tax Deductions, and Setting Rates. THE FREELANCER’S ESSENTIAL GUIDE

Upload: ebillity-time-tracking-software

Post on 12-Jan-2015

184 views

Category:

Business


5 download

DESCRIPTION

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.

TRANSCRIPT

Page 1: eBillity Time Tracking Software - Freelancer's Guide

to Billing, Tax Deductions, and Setting Rates.

THE FREELANCER’S ESSENTIAL GUIDE

Page 2: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

Table of ContentsCharge 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 Co!ee 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-Pro"ts 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

Page 3: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

Table of ContentsCommon 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 Pro"t 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

Page 4: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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 "nalist at the 2011 Intuit App Showcase and is a certi"ed Intuit partner.

Ultimate convenience:

�� Access eBillity anywhere anytime!

�� 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!”

�� Much more

Invoicing and account management tools:

�� Track time, electronically bill and easily custom-

ize invoices

�� Add credit card payment links to your invoices!

�� Quickly create client portals to e#ciently man-

age your receivables!

�� Much more

This app is great, keep it com-ing 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.

- Vanessa

Solid support from Ebillity on setup. I’ve appreciated their ef-forts to assist us with new users to the system.

- Mark

Start your Free 30-day Trial (no credit card required) here.

3

Page 5: eBillity Time Tracking Software - Freelancer's Guide

7 Things Every Freelancer Should Know About Setting Billable Rates

CHARGE MORE OR LESS?

4

Page 6: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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 pro"tability—and can help to build your client base.

In fact, what you charge directly re$ects 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 "rst 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 !rst 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 o"ered 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 di"erent 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.

5

Page 7: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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

!ne, but I do a better job—that’s why I charge more.”

A !nal 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 in#uence 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.

6

Page 8: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

#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 o#ce 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 di!erence. 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 "gure 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 di!erence).

7

Page 9: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

#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 o! – holidays, vacation time, sick time,

etc. Let’s say in this example then that we’ll account for seven weeks o! 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 "lled every week. You’ll very likely have slow times. You should account for this

by adding a bu!er 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 "nd out what you need to charge to earn the same as you did in a full-

time 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 signi"cantly later can be a career-killer for many once you have built up a client base.

8

Page 10: eBillity Time Tracking Software - Freelancer's Guide

The Top 14 Tax Deductions Every Freelancer Can Make

UNDERSTANDING TAX DEDUCTIONS

9

Page 11: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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 "rst sit down

with all those 1099s and receipts. But as long as you have the right documentation, you can write o! 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 o! those invoices as bad debts. Writing them o! 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 speci"c industry — like a website designer who primarily creates

websites for real estate agents — you can write o! 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 Co!ee Shop

Do you head to the local Starbucks whenever you want to discuss a project in person? If you buy co!ee

for the pleasure of meeting with a client, partner or other business contact, you can write o! half of your

expenses. It may seem like a small amount, but if you’re a freelancer who routinely uses a co!ee shop as a

workspace, co!ee costs can add up. Keep your co!ee 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 co!ee with and why.

10

Page 12: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

#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 o! 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 o#ce 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 o#ce — you’ll "gure the percentage of

your expenses you can claim based on the percentage of your home you use as o#ce space.

#8 Cellphone And Skype

According to the IRS, you can’t deduct the expense of the "rst 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).

11

Page 13: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

#9 Professional Advice

If you "nd 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 o! those professional fees. Documenting such expenses is just a

matter of having an invoice or receipt.

#10 Payments To Non-Pro"ts

While charitable donations are not deductible as business expenses, you can write o! payments you make

to non-pro"t 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-pro"ts and similar expenses are all deductible as well. You’ll

need receipts. And, by the way, just because you can’t write o! donations as business expenses doesn’t

mean that you can’t write them o! 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 speci"c situation

with you. You can often write o! 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

12

Page 14: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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,

co!ee, 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

di!erent 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 O#ce (Business Deductions)

�� UK Revenue and Customs (Small Business Topics)

�� Canada Revenue Agency (Small Business Topics)

13

Page 15: eBillity Time Tracking Software - Freelancer's Guide

14

How Proper Billing Practices Can Help Grow Your Client-base

COMMON BILLING MISTAKES

Page 16: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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 dissatis"ed.

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 e!ect 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

15

Page 17: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

decided to help out your client by "xing 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 su#cient 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, proof-

reading, new revisions, and "nal 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 tra#c. 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.

16

Page 18: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

#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 "rst few contacts (day

15 and perhaps day 30), and then become more formal and request immediate payment.

#5 Earn Some Extra Pro"t 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 on-

behalf 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

17

Page 19: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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 in$ate or “pad” the time it actually took to perform a task, particularly if you are

an e#cient worker or if it is a slow month. It is important to ensure that the time you bill for each task

accurately re$ects 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 pro"t. 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 "rst 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, "ling and photocopying – or administrative functions such as training, invoice

preparation, or introductory research.

18

Page 20: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

#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 $ag 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 signi"cance 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 in$uence 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 o!ers 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).

19

Page 21: eBillity Time Tracking Software - Freelancer's Guide

Start your Free 30-Day Trial of eBillity’s Time Tracking and Billing Software. Visit www.ebillity.com

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 "nalist at the 2011 Intuit App Showcase and is a certi"ed Intuit partner.

Ultimate convenience:

�� Access eBillity anywhere anytime!

�� 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!”

�� Much more

Invoicing and account management tools:

�� Track time, electronically bill and easily custom-

ize invoices

�� Add credit card payment links to your invoices!

�� Quickly create client portals to e#ciently man-

age your receivables!

�� Much more

This app is great, keep it com-ing 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.

- Vanessa

Solid support from Ebillity on setup. I’ve appreciated their ef-forts to assist us with new users to the system.

- Mark

Start your Free 30-day Trial (no credit card required) here.

20