Time-Tracking Freelance Work

  • How many of you use time-tracking so that you can accurately count your billable hours when on assignment? I still count hours the old-fashioned way and I know that I cheat myself out of no less than an hour or so every week. My bad! I’ve occasionally thought about time-tracking assistance, but I never knew where to begin. A new year will soon welcome us and that’s a traditional motivator to set goals and improve work habits.

As I suspected, time-tracking systems have their differences. Some are designed with remote teams in mind; others make a department manager’s life easier. Certain time-tracking systems have been created to address the needs of Freelancers and we’ll sort through a sampling here:

Due Time Tracking

Due Time is free and easy to use—just create a task, start the timer and launch your session. You can click and add notes to detail the project you’re working on. Due Time also includes an automatic idle time detection feature, so you’re able to make allowances for stepping away from your project now and again and still remain accurate in tracking your work hours.

You’ll be pleased to find that Due Time will generate hourly rate or project fee invoices when you enter the rate. Due Time makes it easy to organize client information by name, address, or even payment currency.  Due Time

TopTracker

Along with tracking the number of hours you spend on project tasks, Top Tracker offers screen shots and webcam shots that document your work. Screen shot pages can be deleted or configured to automatically blur before uploading, so that the image is recognizable to you but all text is obscured. The service works with nearly every freelancing platform and will produce a detailed project activity report to document your performance. The service is free.  TopTracker

Sighted Time Tracking and Invoicing

Sighted Time Tracking seamlessly integrates the functions of time-tracking and invoicing, packaged in either the free Basic Service plan or the Premium Plan at $4.00 /month. You can make detailed project notes for every session and also automatically send invoices for hours worked that are customized for billable hours or project fee.

Furthermore, users can send out quotes to prospects when invited to bid on a project and accept credit or debit card payments online and issue a receipt to the client. Plus, you can do it all on your desktop or mobile device.  Sighted

Tick

Each time you submit a time entry, Tick updates your project and task budgets in real time and reports it back to you.  If you regularly track your time against an hourly rate budget of project fee that involves an important deadline or penalties for late completion, then Tick may be your ideal time-tracking solution. It’s even possible to track time on multiple projects simultaneously.  While the service can be used by a solo Freelancer, it is especially suited for a team.

Tick is free if a single user employs the service for one project per month, $19.00/month for an unlimited number of users who’ll track a maximum of 10 projects/month and up to $149.00 /month for an unlimited number of workers to time track an unlimited number of projects.  Tick

Four more time-tracking options will be examined in the next post. Have a good week!

Thanks for reading,

Kim

Photograph: Sundial at the Gate of Honour at Gonville and Caius College in Cambridgeshire, England

Advertisements

Who Gets the 1099?

The year is drawing to a close and we’re crossing into the 11th month. Before you become enmeshed in the celebrations and obligations that the holidays demand of us, do yourself a favor and commence your tax planning. Create an accounts receivable and  invoicing strategy once you’ve decided when it would be most advantageous to receive payment for services rendered in this calendar/ tax year or the next. IRS Form 1099-MISC will be at the center of the action; understanding when you’ll need it and when you might avoid it is your goal.

The payment in question is $600, whether it was paid or received by your organization. Review the accounts receivable history of clients for whom you performed small jobs earlier in the year.  If a client paid you less than $600 in this calendar year, you will not receive or need to file a Form 1099-MISC for the money earned on that assignment.

Start with the easy stuff.  If you find yourself in mid-contract with a client as December approaches and the project isn’t urgent, might it be possible to work until just before Christmas and then resume work in the first week of January, if it appears that will allow you to cap your billable amount at less than $600 for the client in this calendar/ tax year?  That can be one less 1099-MISC to file and a little more money added to your P & L.

If the client has a deadline don’t even think of such a thing but if there is no urgency, why not ask the client if s/he might find it more convenient to take a “holiday break” starting in mid or late December? Many employees take vacation days at the end of the year in a “use it or lose it” strategy and offices can be short-handed just before Christmas and through the end of the year.  I suggest that you refrain from mentioning the tax implications.  Frame your suggestion as a way of being sensitive to what may be going on in the client’s office, i.e., customer service.

Similarly, might you be able to defer until the New Year certain invoices, as a way to keep a lid on this year’s income and taxes and wait until the first week of January to send accounts receivable for work that was performed in December? Let a couple of hours work spill over into January and make your New Year invoice legal.

Now let’s consider the 1099-MISC forms that you will generate and send.  Did you hire any sub-contractors to help you fulfill the terms of a project? Have you hired a part-time bookkeeper or social media expert or editor for your newsletter? If you paid $600 or more to anyone for business services or rents in this calendar/ tax year, then you must send that individual/ company a Form 1099-MISC no later than January 31 of the upcoming year.

So that you will have the information to complete the Form 1099-MISC, it will be necessary to request that all of your vendors and other business services providers complete a Form W-9, ideally before the work they perform commences.  Download Form W-9

Among the important pieces of information that the W-9 will surface is if your service provider’s business is incorporated as a chapter C or S entity, or an LLC or partnership that is taxed as a C or S corporation.  Along with commercial rent paid to or through a property management company (instead of the property owner), a 1099-MISC will not be required for those types of entities when payments for services rendered meet or surpass $600.

Payments for services rendered made by gift card, debit, or credit card are not to be included in the 1099-MISC tally.  Instead, the card issuers will send a Form 1099-K to your subcontractors, vendors, or you when the amount paid for business services rendered meets or surpasses $600.

Obtaining the 1099-MISC is an adventure. You must order forms from the IRS, or visit an IRS service center and pick up a few. The form is not available for downloading.  Click here to order Form 1099-MISC.

Thanks for reading,

Kim

Image: The Tax Collector, 1542   Marinus van Reymerswaele (1490 – 1546)                  Courtesy of Alte Pinakothek Museum in Munich, Germany

Will That Be Check or Credit Card?

As every Freelance consultant knows, it is our pleasure and privilege to perform interesting and often mission-critical projects for clients whom we like and respect.  However, getting paid is the endgame and without exception, we all breathe a sigh of relief when the check arrives.  One vital element of maintaining adequate cash-flow in your business is to invoice on time, a topic that I covered a while back  Invoicing Inertia: The Cure .

Invoicing is only half of the battle, alas; it is smart and proactive cash management to make payment of invoices as swift and seamless as possible for the client.  In good economic times and bad, every once in a while clients will experience constricted cash-flow, even if they are the larger entity.  The ability to use a credit card to pay one of your outstanding invoices can be a great relief to them and could get accounts receivable into your hands as many as a few weeks earlier.

Let’s explore the basics of accepting credit cards and how to get started as a merchant who accepts the cards.  Twenty years ago, I spent a couple of years as an independent merchant payment services agent, selling Master Card, Visa, Discover and American Express processing services and card terminals to small business owners, so this topic is a nice walk through history for me.

Let’s start with some likely good options for a Freelance consultant.  Along with credit cards, you will also want to accept debit cards and eChecks.  You’ll choose the card not present processing option, so that clients can call you when the invoice arrives and phone in payment.  You may also decide to accept mobile payments, meaning that you will be able to accept client payments through your smart phone or tablet while you are at their office, or other location and to make that possible, you’ll also select the card present option.  In all scenarios, 48 hours post-transaction, the payment will be deposited into your business bank account.  You may not choose to invest in a (costly) credit card terminal unless clients visit your office.  Your card present transactions, if you do them, will most likely be mobile device payments.  You may decide against accepting American Express cards, since its processing fees are at least a point higher than Visa, MasterCard or Discover.

Call your business bank to get information about processing fees (about 2.5% of the transaction amount and 3.5% for AmEx cards).  There is also a separate fee called a transaction fee.  Freelance consultants will process few credit card transactions in a month and your transaction fee will be higher as a result.  In addition, there will be a service initiation fee and maybe also an annual fee.  Finally, there will be a statement fee if you’d like to receive  the hard copy of card, eCheck and mobile payments that you accepted.

The merchant approval process will center around an evaluation of your credit history and credit score, so if you need to pay down/pay off bills to improve your financial picture, do that first.  The associated merchant services fees will probably be impacted by your credit score.

If mobile payments will be explored, I can almost guarantee that Square will offer good service at very competitive processing rates  https://squareup.com/  You can also call Discover, Visa and Mastercard directly and find out what they’ll charge for your chosen merchant services.  Your bank may be where you buy eCheck processing services but then again, you may be able to negotiate a good merchant services package with your bank and get all that you want in one place.

Then there is the matter of security during the age of hacking, phishing and data breaches. If you belong to a business networking group, find a colleague who does internet services and ask how you take security precautions on your end.  The merchant services industry stays on top of security matters, but they are not infallible.

To sum up, be advised that although the various merchant services fees are an issue and you’ll want to secure the most competitive processing rates, good service and convenience matter.  As much as the process of expert payment transactions, you must seek out a system that will be reliable and user-friendly for both you and your clients.  A positive, glitch-free experience and excellent customer support are usually worth somewhat higher fees.  Consider it the cost of doing business. Getting paid by clients ASAP is, after all, the endgame.

Thanks for reading,

KIm