How to Get Paid On Time and Increase Cash Flow as a Freelancer

increase cash flow

As you can probably guess by now, I’m on a mission to help freelancers and self-employed biz owners get paid on time. Nothing is more frustrating to a growing business than not having the cash flow you need to pay the bills, buy much-needed equipment, pay team members on time, or have the money to invest in yourself.

This is a personal pet peeve of mine when working with clients. If they aren’t willing to pay a small deposit up-front, or pay invoices within the net term period, I won’t continue working with them.

I understand the way I run my business is not their priority, however, not paying the people you work with on time is a very selfish way to do business.

Step 1: Take inventory of cash flow

It’s not always the most interesting of subjects, but as a solopreneur you’re responsible for the success (or failure) of your business ventures, so it’s important to know the basics, and how you stack up.

Don’t worry, it’s relatively simple! Cash inflow refers to money coming into the business, and cash outflow is money going out.

There are 3 different types of cash flow:

  • Operational Cash Flow. This refers to any activities related to money coming into the business, through products sales, services, etc., as well as expenses spent on behalf of the biz. This also includes paying yourself a regular salary, which is then paid out for personal bills and other expenditures that keep your business and personal ventures afloat.
  • Investment Cash Flow. As you can probably guess, investment cash flow comes from cash received, or spent, through investing activities. Any equipment or assets you purchase to grow or expand your business, or sell in the future, will fall into this category.
  • Financing Cash Flow. This last form of cash flow can be a dangerous one. It’s anything related to leveraging debt (like buying an office space, or personal loans) as well as payments made on those debts. When you can’t repay your debts, then your business enters into a Cash Flow Crunch stage, which can lead to bankruptcy if you aren’t able to turn the situation around.

The main reason why I wanted to explain the different types of cash flow is because it may help you figure out what type of income problem you have. Taking inventory of where your business is at, and finding out how to increase cash flow is the first step towards success!

In the past, I shared that the major problem with my freelance business was an operational cash flow issues, or rather, an income problem not a spending problem.

What kind of cash flow problem do you have? Do you need to invest into your business? Are you using too much financing cash flow (or debt) to keep things afloat?

Now that you know the answer to your cash inflow problem, use these next steps to increase the amount of money coming into your business.

Step 2: Send out professional invoices

The first step to getting paid on time is sending out professional, clean, and easy to read invoices (duh!). I mean, do you really think your clients will pay you on time without a prompt from an invoice?

It doesn’t have to be anything fancy, but something as simple as a free invoice template created in Microsoft Word, Google Docs or Invoice Home is a great place to start. If you want something a bit more in-depth, you can sign up for FreshBooks for free and test out their service.

I have personally used FreshBooks for the past year and love the fact that it sends a payment reminder if a client hasn’t paid within a specific time-frame. It keeps me from having to follow up, but reminds the client I don’t work for free!

You can also send a simple invoice straight from your PayPal account, although you’ll have to pay higher fees to receive payment. However you create your invoice, make sure it includes these important details:

  • A professional header
  • The client’s contact info
  • Project/invoice details
  • A description of services
  • Payment address and email

If this is your first time creating an invoice, check out this detailed guide I wrote for The Write Life, on how to create your first invoice as a freelancer.

FreshBooks invoice example
My template for invoices for freelance writing (although each client is billed at a custom price rate, my base is currently $0.30 per word).

Step 2.1 is also to use a service that creates recurring invoices so you don’t have to create them manually. This will save you time, headache, and make sure you don’t forget to invoice someone (yes, that’s happened to me before).

FreshBooks does offer this as a feature by clicking on Invoices —> Recurring —> Create a Recurring Profile. If you don’t want to use FreshBooks, something as simple as a copied template could work too. The point is to simplify your invoicing process so you still get paid without having to spend a lot of your precious time.

Step 3: Bill more often

I recently asked how often the members of the Careful Cents Club send invoices to their clients and I received some surprising answers. Most of them were very much against the idea of billing clients on a weekly or bi-monthly basis, and instead only send out invoices once a month.

But how is that maximizing cash flow? You have to be REALLY disciplined to stretch your money out over the entire month and stick to a budget, while hoping your clients pay you on time at the beginning of the next month. This logic just didn’t make sense to me, so I decided to experiment.

Since the beginning of October, I started invoicing my freelance clients on the 1st and the 15th. (This was prompted because a new client requested this and I thought it could be good to implement across the board.) I haven’t had cash flow issues AT ALL, since then. No taking money out of savings to cover a transfer, and no stressing out when I needed to pay my rent.

I know it’s only been a few months since I started experimenting with this, and not all my current clients have been switched over to this frequency, but so far I like sending invoices twice a month. It’s been a huge game-changer for my bank account, and something that’s enabled me to get off the financial roller coaster.

I’m not the only one who thinks this idea is best for freelancers. In the definitive guide to getting paid as a freelancer, Brennan Dunn talks about strategies that help you get more money in your pocket. And his second tip on the list is to invoice more frequently — at least once a week!

“When I was first starting out, I invoiced twice a month. However, you should invoice as frequently as you can — preferably once a week. The shorter the loop between sending out an invoice and getting paid, the better. If you’re working on NET 30 terms (meaning: the client has 30 days to pay your invoice) and you invoice once a month, you’re looking at upwards of 60 days (2 months!) before getting paid for your time. This is less than ideal, especially since many of us don’t have the cash flow to support that.” — Brennan Dunn

HA. See? I wasn’t even suggesting invoicing once a week, but that’s a smart idea too!

Brennan has over a decade of experience building his own freelance agency and brings in thousands of dollars each month. If you don’t want to take my advice, then I hope you’ll consider his.

Not sure it will work for your business? Don’t think clients will agree to pay more often? Give it a try and see what happens. What have you got to lose?

Since doing this experiment I’ve noticed that clients like being billed more often because it works better for their budget too. It’s a lot easier to pay an invoice that’s $100 each week, than to shell out $500 at the beginning of each month (during the same time your other bills are due).

Makes sense doesn’t it?! #dontknowwhyIdidntdothisbefore

Step 4: Create and enforce a payment process

You’re only as good as the systems you create and actually follow! So whether you have a system for sending out invoices, or an e-commerce business that sells products, you have to outline the exact process for getting paid.

Should clients pay you via PayPal only? Do you accepts checks, or direct deposits? Do you have a way to accept credit cards? Are the payments split into installments?

Even though it may come with a small convenience fee, credit cards have been proven to increase how quickly you get paid, and the amount of overall sales. In fact, 52% of those surveyed made at least $1,000 more a month by offering credit cards as a payment option. I accept credit cards via PayPal as well as WePay (through FreshBooks), but there are lots of other payment options available.

Aside from how I get paid, every potential and current client of mine knows exactly when I send out invoices, and what happens if they fail to comply. Why? Because I created a Google Doc that outlines every detail for them and is integrated into the contract we sign before working together.

A few things that I mention include;

  • Topics I specialize in
  • Turnaround time for completing a project (so there aren’t unrealistic deadlines)
  • Business hours and how often I respond to emails
  • If an image is included in addition to the freelance writing work
  • How often I invoice

It also includes the fact that I won’t continue working for them if I don’t get paid in a timely fashion. Of course I do give everyone a grace period, but if a client continues to be late on payments, I will cancel the contract.

This should be one of your non-negotiables, because as a biz owners we don’t have time to chase down payments owed to us, especially when there are literally hundreds (and maybe even thousands) of other clients we can work with.

If you run a product-based business, there are simple services like Ejunkie, Gumroad, or Shopify, that make it easy (and inexpensive) to get paid before delivering the product. And yes, you should be charging for your guides, courses, and physical products up-front.

I do this with my biz coaching sessions; if you want to get the link to schedule a time on my calendar, you’ll be prompted to pay an invoice from PayPal first. This is only fair to the other clients who need calendar slots — so if you don’t pay, then you don’t get a premium time slot.

Need more ideas to get paid on time? Check out this infographic from Citizens and how to use small business loans to maximize cash flow!

Business Cash Flow Infographic

Step 5: Set realistic expectations

The key to most of these steps is setting expectations for both you and your clients to follow. Be up-front with what you require to do business, how you want to get paid, and what happens if you’re not paid on time.

This will help you increase cash flow each month and maybe even allow you to start socking away money into your savings account. (Imagine that!)

A few of my favorite and really helpful ideas from this infographic, include;

  • Offering discounts to clients who pay within the first few days
  • Prioritizing who gets paid first based on what’s essential to your business
  • Using an automated payment reminder system to follow-up
  • Setting earlier deadlines so you don’t have to wait 60 days
  • Keeping an accurate Accounts Receivable and Accounts Payable system

Increase your cash flow this week

Now it’s your turn! I want to hear how you plan to increase your cash flow and enforce getting paid on time. Is there a system or method you already use? Or are you planning to implement one of the steps listed here?

What action are you taking THIS WEEK to put more money in your bank account? Care to join me on the experiment of billing clients twice a month, or maybe even every week? I’d love to hear your experience and how it’s worked/hasn’t worked for you.

Please leave a comment with your ideas and plan of action!


This post was underwritten by Citizens Bank (which means the content is written by me and approved by the sponsor). All opinions are my own, and was no way influenced by any brand. I only share content or products that I personally use or find helpful.
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  1. Kayla says:

    I’d like to do mine twice monthly, but for some reason the majority of my clients prefer monthly. Luckily, this is not my only source of income or I’d probably have operational cash flow issues too. I do have a few clients that prefer to pay per item, so sometimes they are paying me multiple times in the same week. I try to do what works best for them and for me.

    • Carrie says:

      I think that’s a smart approach, Kayla. I’m doing this because many of my client prefer it (or asked for it), so that works out. But I think it’s important to meet in the middle with what works best for the client AND you!

  2. Melanie says:

    This is a fantastic post! I plan on boosting my income in 2015 by increasing my rates and getting better paying clients. I do have one client that pays me weekly and that is nice! I think maybe I’ll see about getting paid twice a month from some people. Cash flow is an issue for sure, and this would help!

  3. Marley says:


    I’ve been trying for awhile to write and make money out of my blog but feel lost. I’ve decided that at the end of December I’ll start. I really need some step by step help. Have you thought about offering a step by step guide to making money from a blog? 🙂

    • Carrie says:

      My official payment date for clients is NET15 so payment is due within 15 days or they will start receiving payment reminders. But for the most part, billing twice monthly does constitute a pretty immediate payment so they don’t get behind and have 2-3 invoices that are outstanding at once. It’s a psychological strategy that works well!

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