When would you like to be paid for work? Probably as soon as possible, right?
If I can, I’d want to be paid upfront before I start work. And in full.
Unfortunately, I don’t always get my way. Some clients, like big organisations and government agencies, have established finance processes that involve:
- Minimum 30-day payment terms (or longer 🫠), and/or
- Accepting invoices only after the work is completed
If I want to work with them, I have to follow their playbook.
This is usually fine with me—I’m not expecting to get stiffed. The only problem is that the money might take a while to come in.
So, by the time it does, I’m like:
Having to wait a long time for payment can be painful because you likely still have expenses to cover in the meantime.
If you can hold out until you establish a regular payment frequency, that’s great. (In other words, you do enough projects to have money come in every month, even if you have to wait a month to get paid the first time.)
I’m also a fan of this practice:
Starting a cash buffer from which you pay yourself every month
Some freelancers treat their entire monthly cash profit (i.e. revenue minus expenses, as received/paid in cash) as their income for the month.
This can work fine if you bring in a healthy amount of cash each month. But you might not be if you’re subject to loooong payment timelines. Where even though you’ve done a lot of work for the month, you have to wait ages for the payment to come in.
My preferred approach is to have a cash buffer from which I pay myself a fixed monthly income and other business expenses.
I set my income at an amount that’s less than my average monthly revenue. This way, when I receive the revenue in cash, I will have some cash left over to add to my cash buffer.
For example, if my average monthly revenue is $5,000, I could pay myself $3,000 as income and set aside the remaining $2,000 for my cash buffer (assuming I have no other business expenses).
Over time, your cash buffer will grow
And it’ll come in handy during the months when:
- You have to wait a long while to get paid
- You’ll have less money coming in because work was slow
In these situations, you can still pay yourself your usual income from your cash buffer. You won’t have to dig into your savings to cover your personal expenses.
Starting a cash buffer may be easier said than done, especially if getting work is a challenge. Still, regularly setting aside any amount of cash helps in the long run.
But if bringing in enough revenue to cover business expenses is a consistent struggle—much less having extra to set aside—it’s worth taking a good hard look at whether your freelancing business is sustainable enough to help you live the life you want.
(On the flip side, if you find yourself having too much money in your buffer and don’t know what to do with it, here’s what I do.)
More freelancer news
Tax-filing things
It’s tax-filing szn! From this year onwards, some self-employed people (mainly delivery workers and commission agents) will get their tax forms automatically filled in for them.
But if you have to file your taxes yourself and need help with it, these two programmes might be of interest:
- 20 Mar: Tax-filing clinic for freelancers – arrange a free one-to-one 15-minute consultation on your taxes with a tax advisor.
- 27 Mar: Tax-filing webinar for freelance coaches and creatives – attend this 1.5-hour webinar to learn how to file your taxes, and get all your tax questions answered.
More apprenticeships and attachments for self-employed arts professionals coming soon
The National Arts Council will roll out these apprenticeships and attachments this year, focusing on these areas:
- Arts education
- Stage and production management and coordination
- Technical theatre for live performances
This news article briefly talks about this, but we’ll have to wait for more details to be released.
This post was first published in my email newsletter on 13 Mar 2025. If you liked it, sign up for my newsletter here:
