If you’re a freelancer or a small business owner, then you’ll know that managing finances can be a time consuming and complicated process. Preparing invoices, chasing payments and keeping track of cash flows can end up feeling like a full-time job – eating up hours that could be spent generating ideas or making creative work. But there is help available, from government-run websites to digital apps and templates that can reduce time spent on financial admin.
Fintech startup ANNA is one such product. Its subscription-based service launched last year and offers a business account and debit card as well as invoicing and tax support. The brand uses a mix of AI and human customer service teams to prepare invoices, track finances and chase payments on its users’ behalf. As we’ve been exploring the subject of money at Creative Review, we asked ANNA for some tips on making ends meet. Here, Chief Design Officer Daljit Singh answers some common questions on managing money – and explains how ANNA can help make life easier for creatives.
Q: I’m new to running a business. Where do I start?
A: The UK Government’s Business Support Helpline and website has lots of free advice for setting up a new business, writing a business plan and keeping your company going. The Government’s Business Is Great initiative offers more support, advice and inspiration.
You should also get some advice from an independent consultant or advisor that specialises in the creative sector. The Business Side provides really great practical legal, financial advice, templates and coaching and there’s Upstarter, which runs programmes like ‘Six Weeks to Pop-Up’ and offers loads of support for creative micro businesses.
Freelance networks and online communities are popping up all the time – check out Leapers and The Professional Freelancer – plus talks and events such as those by Clever Boxer and Power Suit Social, which offer insights and tips on running a business and managing finances.
Many of the team behind ANNA have been involved in what are typically described as ‘creative’ sectors such digital and graphic design, fashion, media and architecture, and worked in those industries for a long time, so that’s why our whole raison d’etre is to support freelancers and creative small businesses – to try and take some of the pain and time-consuming hassle out of financial admin by simplifying things like managing invoices and keeping on top of what’s coming in and out, helping you to keep your cash flow healthy.
Q: Do you have any advice on keeping track of expenses?
A: Make sure you’re up to speed on what HMRC considers allowable business expenses and what you can legitimately claim. And keep your receipts. Some accountants supply a simple spreadsheet into which you can input your expenses and keep track. You’ll need this information for when you or your accountant submit your annual tax return.
Q: I’m spending too much time preparing invoices. What can I do?
A: Get digital! There are lots of templates available online that you can download and customise as well as some great time-saving apps and software. Some people prefer to just set reminders in the standard calendar and reminder apps that come with your phone. Others find that those built into finance and banking apps make more sense, so all business admin stays neatly in one place. ANNA comes with invoice templates, so you never have to make an invoice again – just create it in ANNA and the app sends it for you superfast. And it’ll ask if you want the payment chased, which saves you time on your scheduling reminders
You don’t want invoicing to feel too personal. It can actually be a bit awkward
Q: How long should I wait before chasing up an invoice? And what’s the best way to do this?
A: It’s inevitable that you’ll have to chase an invoice from time to time, but there are ways of mitigating the likelihood of it. From the outset, when negotiating a contract or starting a new relationship with a client, make sure you include details of your payment terms and any late payment fees in your main contract terms, so that clients know what your expectations are from the start and also that they will face a penalty if they don’t meet these – although all this might only be a deterrent at best. Unfortunately, there are always a few badly behaved clients that pay late regardless.
In terms of chasing up payment, this is very much a case-by-case basis, but once the payment due date has passed and you’ve delivered the work, you can start to send gentle reminders. If the payment is late by a significant amount of time (weeks rather than days), the firmer in tone your reminders can be. It’s best to send reminder emails rather than leaving voicemails, as that way you can keep track of when and how often you’ve had to chase should the situation become really problematic.
But also, you don’t always want invoicing to feel too personal. It can actually be a bit awkward, so to take the personal element out of the equation, you can automate invoicing and payment chasing. At ANNA, we gently nudge clients on your behalf – it’s a useful way of making the process feel a bit more objective.
Q: If someone doesn’t respond to my payment reminders, what can I do?
A: It sometimes helps if, rather than chasing the accounts or procurement department, you ask your direct client contact – the person with whom you have the closest relationship and who commissioned your project – if they can also chase on your behalf. It’s harder for Brian from accounts to ignore his colleague in the same company than to ignore an email from a freelancer he’s never met. There are some options out there such as what’s known as factoring, and do remember that if an invoice remains unpaid after six months, it can be written off as a bad debt.
Everyone who works for themselves or runs a small business knows that admin can be very time consuming. At best it’s a bit tedious. at worst it’s quite overwhelming
Q: How do I work out how much I should be charging for jobs?
A: You can get a sense of the typical day rate or project rate for your specialist area by talking to your peers and checking guidelines issued by industry trade bodies. You work out the amount to charge based on that, and of course, how many days or weeks you think it will take to complete the work.
Q: How can I plan for months where work is slow? Or payments arrive late?
A: It’s partly about having a good new business strategy – try and keep the pipeline healthy so that projects are staggered and the next one is lined up not too far from the previous one ending. In terms of money, just be organised and try and save a little for a rainy day.
Q: I feel like I’m spending too much time on finances, and not enough on being creative. What can I do?
A: Everyone who works for themselves or runs a small business knows that admin can be very time consuming. At best it’s a bit tedious, at worst it’s quite overwhelming. Try and compartmentalise your week so that you slot in admin tasks at a particular time. Pick a day or time when you’re usually feeling least creatively inspired anyway and use that for sorting out your finances instead.
The more efficient the apps and software you use, the quicker it’s all over. ANNA comes with lots of time-saving tools and functionality designed to lessen the stress taking up space in your head and saving valuable time so you can get back to being creative and doing what you’re best at.
See anna.money for more information about ANNA’s products and services.