Freelancing is an increasingly popular option among professionals. And why wouldn’t it be? You are your own boss, have control of your business (and your destiny), and can even work from home in shorts, a t-shirt, and flip-flops (if that’s your thing).
That said, dealing with the bureaucracy and keeping tabs on your money flows, receipts, and accounts as a freelancer can be a real pain. Even the act of getting paid can be a little tricky, as there are numerous options for collecting money, such as cash payments, wire orders, bank transfers, and online payments, each with its own requirements, procedures, and peculiarities.
Why online payments?
Of all these options, online payments are probably the most convenient for both personal business owners and their clients, as they minimize the bureaucracy and make it easy and fast for freelancers to get paid.
Direct cash payments are inherently messy and only work for local clients. They are also dangerous, as the freelancer receiving them is left with a large chunk of cash on himself, making him into a potential robbery victim.
Wire and bank transfers are somewhat better and work internationally, but there’s still some hassle involved (having to have a bank account, prove your id to collect, etc), and both kinds of transactions can take several days to clear because of laws against money laundering. It’s also tricky to keep a real-time track of your cash flow with these kinds of payments.
Easy online payment methods such as PayPal, Stripe, VivaPayments, WePay, Amazon Payments, etc.) solve all of these problems at once and help you to get paid faster for your freelance work. They allow you to receive payments from all over the world, provide a nice web-based interface to manage and monitor your accounts, can handle disputes, returns, and chargebacks, and follow strict security standards (imposed and validated by national regulatory bodies) so that your and your client’s money and account information are safe.
With online payments, you can also transfer any earnings to your bank account fast and securely, while some can even be configured to do that themselves at specified intervals. Advanced online payment services may also provide features such as coupon codes, seasonal sales, bundling, and special discounts, that help buzz up interest in your business.
Hey, what’s the catch?
All this convenience comes at a cost, either in the form of a percentage share of the payment, a fixed transaction cost, or a combination of both. Those costs differ depending on the service provider, with PayPal, for example, charging 30 cents plus 2.9% per transaction and VivaPayments 2.4% + €0.24 per “successful charge”. Some services might also charge a setup fee or recurring charges.
With such variety on offer, we suggest you shop around before choosing your online payment provider. Besides price and features, some other important things to consider are ease of use, reliability and reputation, and availability (not every online payment service accepts payments to and from all countries). It might also make sense to consider signing up for two or more such services to avoid putting all your eggs in one basket.
If you’re wondering if all this convenience of accepting payments outweighs the costs, the answer is probably yes. See, unless you’re a large company with lots of resources (and a legal team on standby), setting up your own payment processing is extremely difficult and costly, not to mention dangerous.
Do you know the difficulties inherent in accepting payments and paying VAT to each country you do business with, or in following their trade legislation? And, most importantly, do you really want to be responsible for your client's credit card details, with the possibility of suffering a huge lawsuit in case they are exposed or hacked?
Compared to such headaches or to the limitations and bureaucracy of cash and bank payments, giving an online payment service a few percentages off of your sales suddenly sounds like a very good deal. (Not to mention that you’ll be losing a lot more in sales if you’re not accepting online payments).
Cool, let’s do business!
All in all, using an online payment service is a no-brainer. And if you want to keep a tidy shop you’ll be better off using an online billing system too. Sure, you could use Word or even Excel (people do!) to generate your invoices. Or perhaps some specialized desktop program that comes with a 100-page manual and dates back to Windows 95 (complete with a clunky interface and all)
Or you could opt for something like Elorus, our online invoicing and billing software for freelancers and small businesses. Unlike Word, Elorus is specialized in creating, editing, managing, and sharing invoices. And unlike your grandfather’s desktop invoicing software Elorus is wired to the Cloud, accessible from any device with web access (from your laptop to your iPhone), easy to use, and safe.
Plus, with Elorus you don’t just issue and manage invoices: it also gives you complete control of your sales and expenses, allowing you to monitor your cash flow and watch the performance of your business or freelancing gigs.
It even integrates with online payment services such as PayPal and VivaPayments, letting you generate online bills for commercial transactions and invoices to be paid through them.
And because we know freelancers are often struggling when starting out or are between gigs, we made Elorus free for all professionals that deal with no more than three clients or suppliers per month.