Keys to Freelancer Pay: Invoicing, Payments, and Bookkeeping

Business Tips + Tools

April 10, 2023

Establishing a good workflow to your bookkeeping early on is paramount. Keeping it diligently organized from the outset will pay dividends down the road and make your life much easier during tax time and throughout the years 

As we’ve written before, it’s extremely important to keep your personal and professional finances separate. At best, mixing the two can cause confusion when trying to figure out your taxes. At worst, it opens up your personal finances to any sort of business litigation, should it be unfortunate enough to occur. This is why we recommend setting yourself up for success early on by establishing a rigorous freelancer pay workflow that flows seamlessly through invoicing to receiving payments, and diligent bookkeeping to keep track of it all. 


Invoicing is essentially handing over a bill of sale. It details the work being offered and the agreed upon price for that work. If you work for a small business or individual that doesn’t demand an invoice, we still highly recommend creating one for documentation, if nothing else. 

Besides just setting down the above parameters on paper, a well-crafted invoice looks highly professional and makes it easy for the client to pay. You don’t want any barriers to payment—clients will often create plenty of those without your help.

You’ll likely send an invoice after you’ve had a deep-dive meeting with the client and after the contract has been signed (or send it with the contract). Most of your payment parameters will be put into the contract—the invoice just states exactly what the client needs to pay you, for what, and when it needs to be paid.

There are plenty of great invoicing templates out there that you can customize and brand as your own. Canva, in particular, is a visual graphics program that has several customizable invoice templates and is easy to learn. There is a paid tier, but even the free level gets you hundreds of good-looking templates you can tweak to your heart’s content. Check out our invoice building article for more tips. 

Stripe is another service that allows you to invoice clients, though they’re really more of a payment processor. It’s easy to set up recurring payments through them as well, though we’ll get more into that in a bit. 


It sure is nice to get paid for your work, isn’t it? Seems like a silly question but…as a freelancer, how does that work? Unless you’re living in a cave, you’re aware that modern payment tends to be purely electronic. There’s also the question of when a freelancer gets paid. 

Payment Schedules


For project-based work, for example building a website, you generally ask for a deposit up front. This is often 50%, although many freelancers ask for the full amount before they start. How you do it is up to you, but we recommend getting that initial deposit pay before you start. 

After the deposit, the remainder usually gets paid out at agreed upon milestones, whether it be completion of the entire project or at established benchmarks along the way. This again reinforces how important it is to have a solid contract in place so that both you and the client are protected and feel comfortable with the arrangement. 

Retainer / recurring work 

For recurring tasks and general retainer work, freelancers typically receive their pay on a  monthly basis. Again, this should be laid out in the contract before any work begins. 

If the work or payment amount is the same from month to month, it’s easy to set up recurring payments in Stripe or Paypal (although they both takes a slice of your pay: 3-4% of the total plus 30 cents for every transaction)). Stripe allows you to use ACH deposits for a very reasonable fee—under 1% at the time of this writing. If that’s an option for you, it’s worth looking into. 

If the work or pay will vary from month to month, many freelancers will manually invoice at the end of each month. This should be pretty simple once you’ve set up an invoice template with a paylink on it, you just fill in the hours/work details and amounts. 

Payment Methods

As mentioned above, Stripe is a great way to streamline your freelancer pay, though they are just one of several options. Many digital banks such as Novo and Mercury now give you the option to invoice directly through them, keeping the fees low or nonexistent. 

Virtualcopia’s websites fully integrate with Stripe as a payment processor, or you can easily add paylinks or payment buttons directly on your site. If you have multiple businesses, be sure the name you use on the payment processor matches what you use with your client!


Most people don’t love this part of the business, but it’s critical that you stay on top of your finances at all times. It will give you a good look at the health of your business on a day-to-day basis and make quarterly and end of year taxes easier and a lot less stressful. 

Good bookkeeping is based on a simple principle: record everything. Any money that comes in and any money that goes out. Store physical and digital receipts in one place, and do it immediately. If you wait to do it later, you’ll find yourself digging through pockets or scrolling through your emails to try and track down some errant receipt. Form the habit early and you’ll thank yourself later on.

Having a good bookkeeping workflow is key to making it easy, and if it’s easy, you’re more likely to stay diligent. There’s a slew of different apps that help you stay organized and keep everything tidy and in one place. Being a member of the Virtualcopia collective grants you access to Virtualbooks and time tracker, though there’s a number of other ones out there that do a good job and don’t cost an arm and a leg:


Freshbooks is an extremely powerful all-in-one app that allows you to invoice, time track, project manage and much, much more. You can connect your bank account to it so any receipt or payment gets directly plugged into the program for you. 

Their “Lite” tier at $180 per year only lets you handle five separate clients, so you may grow out of it quickly, depending on your freelance niche. $360 lets you handle 50 clients, $660 for unlimited, plus several added features like inviting your accountant and granting more employee access. They run specials all the time so chances are you’ll be able to get it for a little less if you keep an eye on them.


Honeybook offers many of the same features as Freshbooks, but simplifies the tier system, offering everything they do for a monthly or yearly payment. You get full access to everything and no limits on client or account numbers. It’s refreshing to have it be so simple without a sales angle on it. They are also known for their robust CMS, or client management software. Get 20% off your first year of Honeybook with our link.


Quickbooks has been the gold standard for freelancers since 1983, before hardly anyone even had home computers. From the beginning they’ve set the bar for all other apps that followed. They have a very affordable tier for freelancers at $15 per month, and like Freshbooks, often offer discounts. At the time I write this, they have 50% off of the first three months. 


Wave actually has banking as a feature, tying everything neatly together. As far as a bank goes, it’s not exactly the best option. You don’t earn any interest and the features are somewhat lacking, though the big pull is the convenience of having everything in one place, and its banking, invoicing and bookkeeping are all free. 


Virtualbooks is included as part of the Virtualcopia Business Collective. It’s a handy tool to calculate income and expenses, showing you in real time your estimated tax burden. 

Hiring a Pro

One big question that’s difficult to answer is: when should you hire a professional accountant for your bookkeeping? With all of the initial start-up costs of a new freelancer business, it can seem like something for much further down the road. And that’s fine. If you’re not really bringing in much income, that makes sense. Though, at some point you’ll need to establish an income threshold where hiring outside help is the right choice. Whether you do it when your business’s income exceeds $5000 or $50,000 is up to you, though it’s better to have a professional accountant making sure you’re doing everything correctly before you get too deeply entrenched in your workflow. It boils down to your own personal comfort level, really.   

Keep it Clean

The biggest piece of advice we can give a freelancer or new business owner is to keep your business and personal finances separate, and your records spotless. IRS audits can seem like someone’s worst nightmare, but if you’ve established a watertight bookkeeping system right from the get-go, then everything will be in its right place and you’ll have nothing to fear. 

Matt Ogden

Matthew Ogden is a Minneapolis-based copywriter and content writer and editor. He’s written for national retailers and lobster roll companies alike. When not writing he can be found nose deep in a book, writing and performing music, or nerding out about guitar tone.

P.S. This post may contain affiliate links. We only recommend products and services that we would use ourselves—we’re not just in it for the money.

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