How can I outsource my invoicing?
October 29, 2011 11:30 AM Subscribe
I am a freelance translator and editor. I hate managing the billing/financial end of it myself and want to figure out how to outsource it.
Right now I handle my invoicing through an industry-specific invoicing software, and I'm very happy with how that works. I'm getting better at remembering to send out invoices after I complete jobs to my relatively straightforward clients.
However, I have a lot of clients where invoicing is more complicated: at least half a dozen clients with their own job allocation/tracking sites, and there are often different rates, currencies, payment terms, and invoicing requirements/formats for different clients. I'd say I average 3 invoicable projects a day that I have to deal with, either as a separate invoice or by logging them on a monthly invoice for clients who preferred to be billed each month. I probably invoice 20 different clients in a month, and 50 different clients over the course of a year.
If all of this were handled through purchase orders with the terms clearly spelled out, it would be easier to hand off to someone else to prepare, send, and monitor invoices. But only a portion of my clients are at that level of formality.
I am even worse when it comes to recording payments. Some clients pay via PayPal, some via check, some via bank transfer. Some clients indicate my invoice number with their payment, some indicate their internal reference number, and some just send me a payment with no additional notation whatsoever, and I've got to dig in and figure out what it's for. Which leads to me not recording payments consistently, and then I can't figure out who has paid me what.
I guess what I envision happening is to first put together a master list of my regular clients and their standard billing process, including logon information to their job allocation site if necessary. Then, as jobs are completed, I would forward relevant info to my billing person (purchase order if any, and additional information about volume of work completed) who could then prepare the invoices and send them out (perhaps doing them once a week as a batch).
Then, for payments received--I guess send copies of my monthly account statements once a month? I'm not sure about how most effectively to keep the billing person informed about paper check payments without making too much work for myself, since the whole point of this is to reduce my workload. For example, scanning checks and payment stubs to send to the billing person seems like more work than just updating my invoicing software myself and would defeat the purpose. But my bank statement is not going to have enough granularity to figure out who check deposits are from or what they are for.
Armed with this information, the billing person could then follow up with delinquent clients on my behalf.
All told, I think it would be about 2 hours of work a week to stay on top of my billing (I probably spend about an hour myself, but I don't think this is quite enough), and I feel like around $200-300/month would be the most I would want to spend for the service.
Does this make sense? How do other freelancers/small business owners handle outsourcing billing? How do I find a person who can grok how all this works? Do I need an accountant, a bookkeeper, a clever college student, or what?
I have the same fear here that I do here of hiring someone to clean my house: given the fact that my house and my billing system are both cluttered messes, I'm afraid it will wind up being more work getting things ready for others to take over and do the work than I would expend actually doing the work myself.
Right now I handle my invoicing through an industry-specific invoicing software, and I'm very happy with how that works. I'm getting better at remembering to send out invoices after I complete jobs to my relatively straightforward clients.
However, I have a lot of clients where invoicing is more complicated: at least half a dozen clients with their own job allocation/tracking sites, and there are often different rates, currencies, payment terms, and invoicing requirements/formats for different clients. I'd say I average 3 invoicable projects a day that I have to deal with, either as a separate invoice or by logging them on a monthly invoice for clients who preferred to be billed each month. I probably invoice 20 different clients in a month, and 50 different clients over the course of a year.
If all of this were handled through purchase orders with the terms clearly spelled out, it would be easier to hand off to someone else to prepare, send, and monitor invoices. But only a portion of my clients are at that level of formality.
I am even worse when it comes to recording payments. Some clients pay via PayPal, some via check, some via bank transfer. Some clients indicate my invoice number with their payment, some indicate their internal reference number, and some just send me a payment with no additional notation whatsoever, and I've got to dig in and figure out what it's for. Which leads to me not recording payments consistently, and then I can't figure out who has paid me what.
I guess what I envision happening is to first put together a master list of my regular clients and their standard billing process, including logon information to their job allocation site if necessary. Then, as jobs are completed, I would forward relevant info to my billing person (purchase order if any, and additional information about volume of work completed) who could then prepare the invoices and send them out (perhaps doing them once a week as a batch).
Then, for payments received--I guess send copies of my monthly account statements once a month? I'm not sure about how most effectively to keep the billing person informed about paper check payments without making too much work for myself, since the whole point of this is to reduce my workload. For example, scanning checks and payment stubs to send to the billing person seems like more work than just updating my invoicing software myself and would defeat the purpose. But my bank statement is not going to have enough granularity to figure out who check deposits are from or what they are for.
Armed with this information, the billing person could then follow up with delinquent clients on my behalf.
All told, I think it would be about 2 hours of work a week to stay on top of my billing (I probably spend about an hour myself, but I don't think this is quite enough), and I feel like around $200-300/month would be the most I would want to spend for the service.
Does this make sense? How do other freelancers/small business owners handle outsourcing billing? How do I find a person who can grok how all this works? Do I need an accountant, a bookkeeper, a clever college student, or what?
I have the same fear here that I do here of hiring someone to clean my house: given the fact that my house and my billing system are both cluttered messes, I'm afraid it will wind up being more work getting things ready for others to take over and do the work than I would expend actually doing the work myself.
I am also a translator. My situation isn't as complicated as yours, but it's something I've struggled with. I typically have 3-4 clients in a month and 10-15 in a year. Except when a client demands per-job invoices, I send them once/month, and I rarely have 2 billable events per day.
I never found a piece of software that does everything I want for job-logging, invoicing, and payment tracking. I wound up making a couple of Numbers documents that get me about 80% of the way there (payment tracking is my weak spot). I'd be happy to provide them to you if you want, but I don't know that they'd be much of an improvement over your current system.
This is the kind of thing you could surely hire a remote assistant in India (also called virtual assistants, but I think Siri is going to take over that term soon) to do on your behalf. I've never done that, but a programmer friend has. You'd clearly need to spend a day or so getting all your ducks in a row—writing out procedures, preparing templates, that sort of thing. After that, in theory, you could simply e-mail the assistant "new project ABC123 for client XYZ, PO 987654, 2500 words @ $.15/word, invoice immediately." This doesn't seem like that much less work than the way I handle job logging and invoicing right now, but I don't see how you could make it much less work than that.
posted by adamrice at 12:23 PM on October 29, 2011
I never found a piece of software that does everything I want for job-logging, invoicing, and payment tracking. I wound up making a couple of Numbers documents that get me about 80% of the way there (payment tracking is my weak spot). I'd be happy to provide them to you if you want, but I don't know that they'd be much of an improvement over your current system.
This is the kind of thing you could surely hire a remote assistant in India (also called virtual assistants, but I think Siri is going to take over that term soon) to do on your behalf. I've never done that, but a programmer friend has. You'd clearly need to spend a day or so getting all your ducks in a row—writing out procedures, preparing templates, that sort of thing. After that, in theory, you could simply e-mail the assistant "new project ABC123 for client XYZ, PO 987654, 2500 words @ $.15/word, invoice immediately." This doesn't seem like that much less work than the way I handle job logging and invoicing right now, but I don't see how you could make it much less work than that.
posted by adamrice at 12:23 PM on October 29, 2011
What you are describing is my job. Here's how we do it:
My employer is in an office in Melbourne, almost half the country away from me. I was recruited through www.odesk.com. A friend told me about the site, I joined and uploaded my resume, was contracted by a particular company to do a small amount of research, and then when the company needed a bookkeeper, they remembered me and got in touch to ask if I was interested.
I issue invoices for new clients when I am notified via email (the client is emailed to advise how much is due and what the due date is, etc, and I'm cc'ed in at my email address, accounts@myemployer.com.au). Repeating invoices are issued after setting up a system to record when they are due (a common old Excel spreadsheet would do, but our system is a little more convoluted due to it being simple when they were starting out, but as the business has grown dramatically it's become more complicated). After three or four months, as their trust in me built, I was given online access to their bank account so I can record payments in and out. (I have my own login so they can trace who has done what - if I transfer all their money into my account and take off to Brazil, they'll know who did it.)
If a cheque is sent to the office, they send me a quick message via Skype saying "chq $999 from Client ABC deposited today" so I don't have to waste time figuring out which client made the payment.
We talk via Skype maybe once a fortnight. During the initial learning curve of maybe a couple of months, we'd talk on Skype almost every day because I had so much to learn about their business methods.
Bear in mind, though, that Australia a lot less cheque-centric than the US. 95% of our payments are done by internet bank deposits or credit card payments (which I take over the phone and process online). But if you got into the habit of notifying your bookkeeper about cheque or Paypal payments with a quick email, it would take only a few seconds for notification of payment to be recorded.
I loathe MYOB with a vengeance, but it can be used to track billing hours, issue invoices, record payments, etc.
Feel free to mefi-mail if want any more of my perspective.
Upon preview: adamrice is right. My employer has a couple of virtual assistants in Asia and that seems to work well for them, as well as being very inexpensive.
posted by malibustacey9999 at 12:31 PM on October 29, 2011
My employer is in an office in Melbourne, almost half the country away from me. I was recruited through www.odesk.com. A friend told me about the site, I joined and uploaded my resume, was contracted by a particular company to do a small amount of research, and then when the company needed a bookkeeper, they remembered me and got in touch to ask if I was interested.
I issue invoices for new clients when I am notified via email (the client is emailed to advise how much is due and what the due date is, etc, and I'm cc'ed in at my email address, accounts@myemployer.com.au). Repeating invoices are issued after setting up a system to record when they are due (a common old Excel spreadsheet would do, but our system is a little more convoluted due to it being simple when they were starting out, but as the business has grown dramatically it's become more complicated). After three or four months, as their trust in me built, I was given online access to their bank account so I can record payments in and out. (I have my own login so they can trace who has done what - if I transfer all their money into my account and take off to Brazil, they'll know who did it.)
If a cheque is sent to the office, they send me a quick message via Skype saying "chq $999 from Client ABC deposited today" so I don't have to waste time figuring out which client made the payment.
We talk via Skype maybe once a fortnight. During the initial learning curve of maybe a couple of months, we'd talk on Skype almost every day because I had so much to learn about their business methods.
Bear in mind, though, that Australia a lot less cheque-centric than the US. 95% of our payments are done by internet bank deposits or credit card payments (which I take over the phone and process online). But if you got into the habit of notifying your bookkeeper about cheque or Paypal payments with a quick email, it would take only a few seconds for notification of payment to be recorded.
I loathe MYOB with a vengeance, but it can be used to track billing hours, issue invoices, record payments, etc.
Feel free to mefi-mail if want any more of my perspective.
Upon preview: adamrice is right. My employer has a couple of virtual assistants in Asia and that seems to work well for them, as well as being very inexpensive.
posted by malibustacey9999 at 12:31 PM on October 29, 2011
I wonder if you would benefit from switching to a system that does invoicing and keeps track of bank balances and expenses, all in one place. I use Xero and have been very happy with it. Here's how it works:
- I do the work. I keep track of my hours using Freshbooks or a similar punch in, punch out app.
- I create the invoice in Xero and send it from that site.
- Eventually, the client pays and the money goes into my bank account (whether it's a check or whatever).
- Every week, I reconcile my bank accounts with Xero, either by uploading a file from the bank or through an automatic link between the bank and Xero.
- Xero notices the deposits and guesses the invoice that each deposit pays, based on the amount of the deposit. To record the invoice as paid I just have to click OK to say, "Yep, that's the right invoice."
I can check Xero at any time to see which invoices are outstanding, which are late, etc.
If I outsource this, I'll give the person accountant-level access to Xero and access to my Freshbooks timesheet. Then I'd just tell the person, "Compile all my hours for client X and send them an invoice that meets their picky formatting requirements, and assign the income to category Q."
I probably wouldn't have the outsource person reconcile my bank statements, since the reconciling requires me to identify expense categories for all the stuff that isn't paid invoices. But reconciling takes literally minutes.
I would also have the person check for overdue invoices every week or whatever and pester the late payers.
Apparently, Freshbooks also links to Xero, but it wasn't clear to me how I would benefit from using Freshbooks for invoicing when Xero has invoicing built in. So I just use the free version of Freshbooks to track my hours and so clients can log in to see how many hours they've used. Then I hop over to Xero to enter the hours into an invoice.
posted by ceiba at 5:09 PM on October 29, 2011
- I do the work. I keep track of my hours using Freshbooks or a similar punch in, punch out app.
- I create the invoice in Xero and send it from that site.
- Eventually, the client pays and the money goes into my bank account (whether it's a check or whatever).
- Every week, I reconcile my bank accounts with Xero, either by uploading a file from the bank or through an automatic link between the bank and Xero.
- Xero notices the deposits and guesses the invoice that each deposit pays, based on the amount of the deposit. To record the invoice as paid I just have to click OK to say, "Yep, that's the right invoice."
I can check Xero at any time to see which invoices are outstanding, which are late, etc.
If I outsource this, I'll give the person accountant-level access to Xero and access to my Freshbooks timesheet. Then I'd just tell the person, "Compile all my hours for client X and send them an invoice that meets their picky formatting requirements, and assign the income to category Q."
I probably wouldn't have the outsource person reconcile my bank statements, since the reconciling requires me to identify expense categories for all the stuff that isn't paid invoices. But reconciling takes literally minutes.
I would also have the person check for overdue invoices every week or whatever and pester the late payers.
Apparently, Freshbooks also links to Xero, but it wasn't clear to me how I would benefit from using Freshbooks for invoicing when Xero has invoicing built in. So I just use the free version of Freshbooks to track my hours and so clients can log in to see how many hours they've used. Then I hop over to Xero to enter the hours into an invoice.
posted by ceiba at 5:09 PM on October 29, 2011
You might like Solo, which claims to be project management software for the modern freelancer. I don't have enough events to make it worth the time to try it out, but it might work well for you.
posted by chrisinseoul at 5:50 AM on October 30, 2011
posted by chrisinseoul at 5:50 AM on October 30, 2011
This thread is closed to new comments.
While designing an AP/AR system for a small synagogue with many offsite staff and board members, I made heavy use of ScanDrop, a free gizmo that sends scanned items DIRECTLY to Google Docs (and actually works as advertised). A strict policy of scan-and-shred for excess paper may clear things up a little bit, whether it's you or your bookkeeper that's later inspecting the scanned images.
Also keep in mind the new deposit-by-scanning-checks technology. This means when you get the check, you feed it to a scanner and then destroy it. This scanner, depending on your bank, can either be a smartphone with a camera and a particular app, or a proprietary device the bank rents to you for a small fee (which may or may not be worth it to you).
Both of these helped us handle a LOT of offsite workers, so if you go that route, I hope you can benefit from them, too. Good luck! It's good to be working, right?
posted by skbw at 11:46 AM on October 29, 2011