Overcoming Freelancers’ Challenges with the Billing Software

There are over 15 million freelancers in India, which is set to increase exponentially in the coming years. A recent study found that 58% of freelancers have experienced the situation of not getting payments for their work delivered. And they have to spend a lot of time following up with clients to get the payment. To help with this freelancer’s issue, we will recommend desirable features of billing software and some of the best practices for invoicing, which you must implement especially if you are starting your freelancing career.  

Challenges Freelancers Face in 2024 

Being a freelancer means you are walking your business journey alone. As you are a one-man-army, it takes a lot of hard work to succeed; apart from that, there are many challenges a freelancer faces on a day-to-day basis, which are as follows: 

Late Payment 

Many full-time employees take up freelancing after resigning, as freelancing offers the flexibility of working from anywhere at the time of their choice. Yes, it is appealing, but the dark side is that it seldom leads to financial instability due to late payments. 

Late payments can disrupt cash flow, impacting everything from paying bills to investing in business growth, and they can cause a psychological toll. 

Improper Invoicing 

Without a proper invoicing system, freelancers find it difficult to create professional invoices and spend more time than they should, detracting them from the core of the freelance business—delivering exceptional work. Occasionally, an adequately formatted invoice may lead to timely payments or disputes. 

Moreover, an unprofessional, inaccurate invoice can damage professional client relationships, potentially jeopardizing future collaboration. In rare cases, this may lead to disputes. To prevent such situations, it is best to subscribe to billing software for freelancers. 

GST Compliance

One of the significant challenges freelancers face in India is complying with GST norms. Due to the following reasons, GST compliance gets complicated for freelancers: 

Knowing the Threshold: Determining whether you have crossed the GST registration threshold limit is difficult as income fluctuates monthly. Keeping accurate income records in accounting and billing software may lead to some conclusions.

Frequent Regulation Changes: The ever-changing GST regulations keep freelancers on their toes. You should stay updated with the latest rules and comply with them. 

Lack of Income Tax Guidance  

The ambiguous income tax landscape in India daunts freelancers. Unlike other professions/salaried employees and businesses, tax slabs, deductions, and exemptions are clearly defined.  Following are the challenges faced by freelancers in the realm of income tax: 

Complex Deductions: Due to complex regulations and ambiguous guidelines, freelancers often fail to claim deductions for which they are rightfully deserving. Additionally, it isn’t easy to categorize and justify expenses like office space, internet bills, and hardware procurement for a freelancer in India. 

Fluctuating Monthly Income: Irregular monthly income throughout the year makes tax liability calculation difficult. Unlike salaried employees, they have a uniform income, thereby making tax estimation easier. 

Limited Access to Tax Experts: Expert guidance is quite expensive, so freelancers often rely on unreliable information available on the Internet. 

Invoicing Tips for Freelancers 

If you want to get paid faster, your invoice should be perfect. Following are the invoicing tips that you should implement right away: 

Mentioning Client Information

• Professional invoices must have client information. 
• Ensures invoice is being sent to the right client.
• You can also include contact information and the address of the client. 

Details of Service Rendered 

• A clear description of the service rendered communicates the scope of your work done and gives the client satisfaction that they are paying only for the service they sought. 
• Can include the date of receiving the project and delivery date. 
• In case multiple services are rendered, mention the price of each service separately. 

Account for Extra Expenses

• Create a separate section in your invoice to mention the extra expense. 
• Mention everything with a brief description so that no doubt arises. 
• Some extra expenses include stock photos, traveling, and special software licenses.  

Read More: Benefits Of Using an Invoice Management System For Freelancers 

Invoice Due Date

• Mentioning the Due date in the invoice helps you to get paid faster.
• Depending on your industry standards, you can choose a payment due date. A 30-day deadline is advisable. 
• It makes you aware of when to follow up. 

Payment Terms

• To ensure timely payment, disclosing clear payment terms is important with penalty/added interest if paid post due date. 
• You can also incentivize early payments and mention the further terms & conditions in the ‘Payments Terms’ section.

Total Amount Due

• Calculating the accurate total amount due is essential for a freelancer to get paid on time; otherwise, it may lead to unnecessary scrutinization that will delay your payment.
• The total amount includes taking into account discounts, any additional expenses and GST (if applicable) 

Features to Look for in Billing Software for Freelancers 

The following are the features that a freelancer billing software should have: 

1. User-friendly interface: A simple and intuitive interface helps you quickly generate invoices. 
2. Customizable invoice template: Look out for an invoicing software that allows you to customize invoice templates to suit your brand. 
3. Expense tracking & management: Monitor your expenses from the billing software and prevent overspending.
4. Automated reminders: Your invoicing software should send payment reminders to your clients automatically.

Summing Up 

This was all about overcoming freelancers’ challenges with billing software. We hope that after reading this blog, you learned how to overcome the challenges you face daily. Subscribing to our free invoicing software can resolve most of your problems. So, what are you waiting for? Sign up now! 

Frequently Asked Questions on Billing Software for Freelancers 

How should freelancers’ invoice format?  

Following are the fields that freelancers’ invoice format should include: 

• Title 
• Name & logo 
• Contact number 
• Client’s name & contact information 
• Date of invoice 
• Invoice number 
• GST registration no. & Tax rate (if applicable) 
• Total amount 
• Payment details
• Signature 

How do you invoice for freelance work in India? 

Whether you are a GST-registered freelancer or an unregistered freelancer, you should send an invoice to your clients in the above-prescribed format. 

Which is the best freelance invoice generator for free? 

Many freelance invoice generators are available online, but none of them are as good as Munim. It is also free. 

Do freelancers need to register for GST in India?

If your income (as a freelancer) surpasses the government’s threshold limit of ₹ 20,000,00, you should register for GST. 

Is TDS applicable to freelancers? 

TDS is applicable for freelancers @ 10% in India.