Challenges faced by freelancers in 2021 and best practices to ensure that you get paid in gig economy.
From home tutoring to a side hustle and now to a full-time work, freelancing and overall the gig economy now holds huge potential. Economists have predicted that the freelancers would contribute to up to 50% of the nation's workforce volume. The market expansion is estimated to reach up to 25 billion USD by the year 2025.
Freelancing offers many perks like freedom, flexibility, charging according to your abilities, location independence, and most importantly managing your own operations at your own convenience. However, freelancers face multiple challenges from payments to managing multiple projects at the same time. In this article, we explore the issues faced by freelancers in 2021 and the practices that freelancers can employ to ensure that they get paid.
Hurdles Faced By Freelancers with Payments
Besides a primary skill, a freelancer has to be good at a lot of other things. They have to play crucial roles like pitching, persuasion, negotiation, decision-making, and networking to build a successful career.
1. Multiple Roles and Responsibilities
The freelancing job differs from the traditional job style. One is required to manage multiple roles apart from delivering work. A freelancer is required to manage responsibilities that include finding clients, marketing, sales, and advertising.
As a freelancer, you will also be required to market your skills on different channels. It is important that you showcase your projects and your skills so as to continually gain work. It is one of the challenges that every freelancer faces when starting out.
From receiving payments to getting projects, there are multiple intermediaries that freelancers face at each step. The service providers facilitating you to seek clients will take a cut of nearly 20% for providing its services.
Getting paid late has become an increasingly common issue that freelancers face even in 2021. Apart from causes like the client is unwilling to pay, the current system lacks in proper tools enabling real time payments. A survey reveals that over 70% of freelancers have a trouble getting paid on time and this has become inconvenient.
4. International Payments
International payments are another major hurdle that freelancers have to face regularly. It is majorly because the payments take longer to reach you and have high transfer charges. Service providers typically charge anywhere between 3-7% for international payments and the money transfer takes up to 10 days to be credited into your bank account.
Tips for Getting Paid as a Freelancer in 2021
One of the most stressful things about being self-employed is managing your cash flow. Here are some of the tips that will help you make more organised and tools that you can use to ensure that your payments are credited in time.
Always begin your freelancing work until you have read and signed a freelancing contract. If you want to prevent payment delays, then you make it as simple as possible for our clients to pay you. Offer multiple payment options so that they can choose the one in which they are most comfortable.
2. Provide Regular Invoices
You must not wait for too long to provide the invoice for the work you have completed. Invoicing seems like a distraction, but it is crucial to keep earning revenues from your hard work. If you don't provide the invoices on time, your clients might need additional reminders. It would also leave an impression that you are in no rush to get paid for your work. The most common way for a freelancer is to manage payments is through monthly invoices.
3. Follow Up
Sending invoices doesn't ensure that you will get paid. Thus, it is recommended to reach out to your clients and politely ask them to pay you. It is best to have regular communication pertaining to your fees, charges, services, and following up on your invoice.
4. Be Upfront
It would be best if you always are upfront about the cost so that there are no surprises for the clients. If you are not sure about the amount, then don't hesitate to provide an estimate. But make sure that the client understands that it's a soft quote.
If you provide a discount to your clients, then make sure your client knows about it. It will help you to earn appreciation and also to build a healthy relationship with the client.
6. Use XanPay
XanPay is a tool that helps freelancers, Small Medium Enterprises, and organisations to manage their overseas payments. It is a payment solution, developed by industry leaders, that can easily be integrated into your current website.
With XanPay, a freelancer can receive almost instantaneous payments without heavy charges for international transfers and foreign exchange fees. While typical PSPs charge as high as 6% for international transactions, XanPay offers a flat rate of 1.99% even for overseas transactions. Moreover, you do not have to pay an annual fee for setup or maintenance. The payment solution has a simple procedure to set up and you can start using its services within 3 to 5 days.
XanPay also provides an option for you, as a freelancer, to offer local payment methods to your clients. For instance, you can offer your client in India to pay in INR through its local payment method - UPI. XanPay's infrastructure ensures that the amount gets credited into your bank account in your fiat currency. This also allows you to leverage more projects as you do offer premium services to your clients and its the first step to building your brand.
It is true that the gig economy offers lucrative opportunities but it is also valid that a freelancer faces multiple challenges from managing operations to getting paid on time. But using the right tools and deploying the right practices will help you address these issues. Moreover, right tools will help you automate your operations and allow you to concentrate on integral things such as delivering satisfactory work.