Disorganization Costs the Freelancer Money

February 4, 2009

Most freelancers are creative by nature, and organization is probably not a strength! If you find yourself putting off the evil tasks of organizing until you just can’t see the top of your desk anymore through the stacks of files and paperwork, chances are you are losing money. Being disorganized can ultimately lead to losing clients, but it can be blamed for a variety of lost funds on a daily basis, as well.

Unbillable time: How many times have you had to search your office (or kitchen table or file box….) for something you needed to complete a job because you misplaced it? This is wasted time because it’s time you lost from work and time you couldn’t bill to a client’s job.

Lost tax deductions: In most countries your business expenses and purchases are tax deductible. If you save receipts and keep accurate paperwork, you can maximize your tax deductions and therefore pay less in taxes than you would have without the deductions. Tax penalties: In addition to reporting your deductions in order to help you save money on taxes, in the United States you have to report all money you earned, even if you don’t receive a 1099-Misc form to file with your taxes. If you are audited and haven’t reported all of your income, you can be fined penalties. Keep good records of all your finances to avoid unnecessary fees.Missed deadlines: The secret key to a freelancer’s success is meeting deadlines. It’s impossible to meet all of your deadlines if you don’t keep track of each project in some sort of calendar or planner. A calendar helps you see when each project is due, how much time you have available to work on it between now and the deadline, and can help you schedule deadlines of future projects based on your current workload. Without it - you’re just guessing and before long, you’ll be missing deadlines.Client contacts: Most freelancers will agree that it’s better to gain repeat business from existing clients than it is to continuously have to find new clients so you can pay the bills. Keeping track of every client and their contact information, as well as notes regarding past work done for the client can help you retain them as a repeat client. You can send mailings or email regarding special offers or new services you offer, but only if you have an organized method for storing your contact information. Forgetting to do this is missed opportunities for increasing your income.

Disorganization does more than just give you a messy and cluttered workspace! Being disorganized costs you time and money as a freelancer. Here are some tips for getting yourself better organized to save time and money:

Reduce the amount of paperwork you’re dealing with. If you’re comfortable with technology, you can stay organised easier by using automatic and online billing for your bills. You can also send invoices electronically to your own clients, and eliminate the need to keep them on file in physical form.
Organize your files by client name. For most freelancers, you’re going to know the client by name, whether it is an individual person or a business name. It makes sense to organize your online and offline files using the client’s name so you can easily find anything to do with that project in one place.

Use a file box or cabinet for papers. For anything you can’t store online or in your computer, designate one spot and use labeled folders to help you find the paperwork. As soon as you have paperwork to file - put it in it’s proper space. Taking the extra few seconds to do it instantly will save you tons of time when looking for paperwork later; and it’s much easier compared to filing a week’s worth of information all at once.

Backup everything. With so much of your important data being stored online, it’s a good idea to have a few backup sources of your electronic files. You can keep current files on a flash drive or portable hard drive in addition to your computer’s hard drive; back up your project files and invoices to an online backup system or burn to CD’s and store off site. There are many options to store information but the trick is to do it regularly and have more than one copy in case something gets corrupted.

Like it? Share it!