As a self-employed freelancer, it’s vital you use your time wisely, find ways to be more productive, and spend money on things that matter.
So when it comes to accepting payments virtually, why do we let online payment systems rob us of our hard-earned income? I talk to lots of freelancers each week and the one topic they always asking me about the best way to get paid without losing a large chunk of it to fees.
Sites like PayPal, charge anywhere from 2% – 6% to accept payments from clients using their service. And since this is the most widely accepted form of online payment, most clients request it.
After realizing I was tired of giving up my money to pay fees, I started looking for other options. I found a simple hack that will save you hundreds — yes, hundreds — of dollars in invoicing fees as a freelancer.
How to pay $0.50 per transaction with PayPal Business Payments
Many popular online invoicing tools, like FreshBooks, (which I use personally and highly recommend) have the option to click the PayPal business payment button when creating invoices for clients.
How does it work? Essentially they’ve worked out a deal, when your client pays the invoice via PayPal with their account balance or echeck you’ll only have to pay a $0.50 flat fee, instead of the usual 3ish percent.
Beware though, this does not include a credit payment option. So in order to receive the $0.50 per invoice paid option your clients have to be willing to pay via this method only. However, it can be worth the savings (in my opinion and experience) and most clients don’t mind using this payment process at all.
This is mostly only available for U.S. currency but if your clients pay you using this method, it could potentially save you hundreds of dollars each year. The only way you can take advantage of this simple hack though, is to use an online invoicing service (like the ones mentioned above).
If you create an invoice directly through PayPal, or through QuickBooks, you won’t have access to this money-saving option.
Where to find the $0.50 in invoicing fees option
As I mentioned, Freshbooks is the invoicing system I have been using for almost three years now, and there are multiple reasons I love it.
Among the many features, are time tracking, creating estimates and sending professional invoices to clients. But I also use it for the simple feature of PayPal Business Payments, which is specifically helpful for us freelancers who run our own businesses.
Start by creating a new invoice
Click the “New Invoice” button to create a new invoice for a client, or you can replicate your template from a past invoice.
On the right-hand side of your new invoice, look under the Online Payment Options section and you’ll see the different payment options you currently offer your clients.
Choose the PayPal Business Payment option
Be sure to check the “business” PayPal Business Payment box under the PayPal tab when creating an invoice, and you’ll only be charged $0.50 per transaction — no matter how large your invoice.
Here’s how it works for me
So the process looks like this –> New Invoice –> Accept Payments Online –> check boxes for different payment options, the PayPal Business Payments option is under the PayPal tab.
You can’t use it with credit cards, only a direct transfer from a bank account. But most of my clients use this option and I’ve never had an issue. I also pay my small team of freelancers, and have a bookkeeper who helps me keep everything running smoothly.
We all use FreshBooks to clock our time with client projects, bill for expenses and services, and then receive payments each month. For the most part I bill out about $7,000 a month for client work. If you’re doing the calculating, I was originally wasting over $210 A MONTH in Paypal fees. ($7,000 x PayPal’s standard 3% = $210)
Yes, FreshBooks charges a small monthly fee to use their services (about $19-30 a month), although they do have a free service with less features. But that’s small change compared to the fees PayPal charges, and how much money you could save using this invoicing hack.
And if you’re still keeping track, I was losing out on nearly $2,500 a year paying invoicing payment fees. Talk about highway robbery! I also know another small business owner who use this service, and it helps saves her over $1,500 a year in fees.
With this simple feature — using a program that’s totally free no less — you can instantly give yourself a raise! Now you’ll be spending less time working and more time doing other more important things on your list of priorities.
If you’re still losing your hard-earned money to PayPal fees, consider signing up for FreshBooks and use this simple back to keep more of your hard-earned money!
Got any other invoicing payment hacks or tips? Leave a comment sharing your ideas so other freelancers can save money too!