The most critical part of a freelance career is putting money in the bank. A working professional without a permanent address will find that this is often more difficult than it should be.
For simplicity sake, I assume that you have established a freelance business in a certain location (the US in my case) and that your bank and your clients are all in the same place.
I also assume that you have an ATM card, so getting money out of the bank isn’t an issue. The problem that needs solving is how to get your clients’ payments into your bank.
There are at least four solutions to this problem:
Family or Friends
Thankfully I have a smart and loving Mom. Yay for Moms! She is my un-official bookkeeper. She has a key to my PO box, she deposits my checks, regularly sends me loving emails to tell me which clients haven’t bothered to pay their stinking bills, and doesn’t charge much. If I paid her, I’d have to call her my official bookkeeper. No one wants that kind of pressure.
- It’s cheap. Family and friends are always willing to do a surprising amount of work for very little in return.
- Getting in touch is easier. If they don’t pick up the phone you can always call your crazy aunt who will constantly nag them until they do.
- When someone screws up, you can’t exactly ask for a refund.
- Family drama is the worst. Involving that in your business can be all types of bad.
- Business and pleasure don’t always mix. Especially when you are on the other side of the world.
Bookkeeper or Accountant
The safer way to manage your money is to pay a proper bookkeeper to manage your finances while you're away.
- Reliable. At least that is what you’re paying for.
- Useful. They can usually do a lot more than just put checks in the bank.
- Knowledgeable. Sometimes it’s just a lot easier to ask a professional rather than Googling for several hours.
- Cost. Bookeepers are cheaper than accountants. But accountants can do your taxes too.
- If you don’t do that much work, they may lose interest and you’ll be stranded without help.
- Trust. You have to have a lot of trust in someone to let him/her manage your finances, especially when you aren’t anywhere near that side of the world. If they mess up there’s not a lot you can do aside from sending hate mail or flying home.
The first thing I did before going remote was to ask all my US clients to consider paying me via direct deposit. Funny enough, clients that owned their own small businesses were more than willing to setup direct deposit and pay direct into my bank account. Larger companies had trouble getting their accounting office to do anything other than cut me a check. Frustrating, but typical. The lesson I learned: At least ask.
- Usually no fees
- Fast and easy once it is setup
- Setup can be a long painful process
- Some people conveniently “forget” the next time you send an invoice and mail a check instead.
- If you change your bank you have to change all your direct deposit setups.
Online Bill Pay Programs (Paypal, Xoom, etc)
Consider this option especially if your clients aren’t in the same country as your business or your bank. In the US, Paypal is the best known and respected way to transfer money. Others, especially Xoom, are a lot easier to use in other parts of the world. Do your research! Fees and terms vary widely.
- All online.
- Easy to use after setup.
- Has a lot of neat features like sending reminder emails, and linking to your personal website.
- They take a cut. Paypal’s default is 2.9% and it goes up for international transfers.
- Setup can be troublesome for a non-tech-savvy users and usually takes a few days.
In reality, it’s not that hard to manage your payments internationally. There are many more options than I’ve listed here that may better fit your needs. Do plenty of research and always have a backup plan.