Study: 40% of Freelancers Will Head into the Holiday Season with Unpaid Invoices
More Americans are choosing to work for themselves, and the benefits of freelancing make it easy to see why. Working for yourself means you can choose your hours, your clients and set your own rates.
But the very nature of freelancing means income is often inconsistent, which can be especially trying around the holidays. There’s no such thing as a holiday bonus for freelancers. In fact, based on a sample of 10,000 customer invoices, the data scientists at FreshBooks discovered that 40% of freelancers will enter into December with $2850.00 in overdue invoices.
To get a detailed look at how much freelancers are owed, we sliced the findings by state. Here’s what we discovered:
States where freelancers are owed the most:
- New York $4244
- Delaware $4094
- New Jersey $3951
States with the highest percentage of unpaid freelancers:
- South Dakota 56%
- Mississippi 52%
- Vermont 51%
FreshBooks also discovered that clients typically take 15 days to pay their invoices in December, so if freelancers want to get paid before Christmas day, they should send their invoices by December 10th.
Check out the infographic below for the full findings and a breakdown of all 50 states. Plus, the FreshBooks team has compiled some tips to help freelancers get paid faster.
State by State Breakdown
Entering into the holidays with unpaid invoices? Here are 5 tips from FreshBooks to help get you paid faster
1. Make invoicing a priority
- Cash flow is vital to small businesses, so make invoicing a priority and make the time for it. Feeling stuck? Use a free tool like this invoice template as a place to get started.
2. Be polite
- FreshBooks research indicates that being polite really matters. Invoices that use please and thank you get paid a median of two days faster than invoices that don’t.
3. Be specific in your payment terms
- State your invoice payment terms clearly on all invoices — and keep them consistent.
- Be clear about how much you’re charging, how long clients have to pay, and any late payment fees that might be added.
4. Make it easy to pay you
- Lots of people still deal primarily in checks, but there is a notable delay with checks (sending, depositing, processing, etc.) that may impact cash flow for the business.
- There are more online payment options than ever before that enable small businesses to accept credit cards online, right at the time of invoice receipt. If cash flow is important for you, it’s worth exploring the available options to find one that might help you get paid faster.
- FreshBooks research shows that businesses using FreshBooks combined with an online payment gateway, typically get paid twice as fast than those not using an online gateway.
5. Send payment reminders
- No matter how much you may dislike doing it, following up on unpaid invoices at regular intervals is necessary for ensure you get paid on a timely basis. Note: FreshBooks enables you to automate late payment reminders.
Methodology
The data scientists at FreshBooks analyzed a sample of 10,000 customer accounts, and found 40% of freelancers are entering into December with a median of $2,850.00 in unpaid invoices. Invoices are considered overdue if they have been unpaid for at least one month, up to six months. Any invoices with amounts owing after six months are considered bad debt.
Contact
Lindsay Lapchuk, research@freshbooks.com
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