Freelancing has become more popular these past few years with a lot of people leaving their full time jobs to become freelancers. It comes with the perks of being your own boss. Freelancers take charge of their career by deciding how they work and most especially working from the comfort of anywhere they like. They decide how many clients they can work with, how much to charge and the conditions of work sounds like the dream doesn’t it.
As a freelancer myself I can say that being your own boss comes with some unexpected challenges. In this case the challenge is getting paid on time and keeping track of my payments in order to observe the cash flow of the business. It’s quite annoying when you have to keep reminding and bugging clients about payment because it’s past the due date. Sometimes the clients may claim to have made the payments and now you have to go back to your transactions history and find out if he/she was right. So I embarked on a journey to design a solution that’ll help freelancers get paid on time and keep track of their payments
Managing multiple clients and projects is a part of running a business as a freelancer. However, sometimes clients don’t pay on time. How can I help freelance business owners keep track of payments from their clients, and make sure that they receive payments from clients promptly for every project?
I led the design of ApexFunds focusing on user-centric design and clean interface.
The goal was to create an intuitive product
Before I could come up with a solution I needed to explore how freelancers manage their payments and finances. This led me to ask some freelancers how they were receiving payments from their clients. I discovered that freelancers used payment methods that are fast and allow them receive payments from all over the world. Some of this methods are:
Some popular payment methods used by freelancers
These methods accommodates all the payment needs of the clients but freelancers still complained of experiencing late payments with these methods.
Managing their finances had to do with keeping records of transactions and payments. This helps observe the cash flow of the business and is crucial for a freelance business owner. But it can be quite tedious sometimes. The freelancer has to be careful because a mistake can give the them wrong information on the state of the business finances. So I asked them how they keep records and manage payments. My research revealed they do so using invoicing, payment tracking software, spreadsheets, and payment platforms.
It didn’t seem like the freelancers should be having any problem because there are tools at their disposal to help them so why are they still having late payments and difficulty keeping track of payments
Understanding the problem
To understand the problem I used first principles thinking framework so that I can gain a comprehensive understanding of the underlying factors and intricacies involved helping me gather insights that will drive my decision making and ideation.
I asked some freelancers why they think they get late payments and why they have difficulties keeping track of their payments. This was my attempt to break down the problem to its fundamental truth.
This revealed that the problem with late payments started because of unclear agreements which contains the payment terms and conditions and they didn’t have a way to enforce the agreement ensuring the clients have to follow them. This didn’t provide protection for the freelancers. Freelancers weren’t properly establishing clear payment terms prior to accepting work from clients because they were unaware of the significance of doing so.
On the other hand, keeping records was tough because the tools to use are quite advanced and they are different platforms so the constant movement from one to the other wasn’t very pleasing.
With this I had a clear understanding of the problem and an idea for a solution.
Five questions informed my design process
1. How can I help freelancers know the importance of using contracts
2. How can I help freelancers develop and make use of concise contracts
3. How can I make it easy for freelancers to track their payments
4. Which payment method would reduce late payment
5. How can I ensure freelancers get paid on time
This led to 4 key components in my design which are
1. A contract
2. An invoice
3. A suitable payment method
4. Easy to use and user-friendly interface
I spent a couple of days researching and learning about contracts and agreements, payment methods, and invoices because these were at the core of the solution. Here’s how they combine to make a system that works for the freelancer
How the solution works
In order to make the freelancers utilize contracts and invoices often, I made them important steps when starting a new project with a client so they should be established before carrying out a job. This is what the process looks like for a freelancer who wants to start working on a new project with a client.
The freelancer can complete the contract and invoice steps at a later time but this leaves the project marked as not started and saved in the archives. Until those steps are completed the project doesn’t start. At the end of this steps, the system sends the contract created to the client and the invoice is scheduled to be sent after agreement of the contract has been confirmed This way it prevents any form of miscommunication about the project and the terms of work
Encouraging the use of contracts
I know writing a contract can be tedious and some of us don’t have the technical skills for it that’s why some freelancers don’t take out the time to prepare one. To help with this, I designed a contract template with the help of a lawyer. It comprises of sections that offer protection to the freelancer needs. The payment method and conditions, terms of work, services, and ownership rights are contained in the contract.
Client view of contract made for them by the freelancer
Making freelancers to always use upfront payment
A lot of freelancers aren’t using upfront payments and this isn’t helping them. They are scared of loosing clients because they think talking about money very early isn’t encouraging to the client and might scare them off. I made upfront payment mandatory and it’s contained in the payment section of the contract. This was the payment condition to make sure the client pays. The freelancer can choose the percentage of the total fee they want to charge as upfront fee and the client is required to make the payment before the work starts.
Client view of contract made for them by the freelancer
Using a payment method that prevents late payment
To further ensure early payment, the type of payment method used had to also be considered because how you pay also determines if the payment will arrive on time. I explored payment methods that will best help with early payment. The answer was Direct Debit. Why Direct Debit you might be wondering…what exactly is Direct Debit
Source: Zoho books
Direct Debit is a simple, secure and convenient ‘pull’ payment method that allows businesses and organizations to automatically collect recurring payments from a payer's bank account with their prior authorization. It streamlines the payment process by reducing the risk of late or missed payments, offering payers a hassle-free experience. The Direct Debit is covered by the Direct Debit Guarantee and accepted by most banks so it’s safe. That’s why it’s the suitable payment method to use. So after the clients set up the direct debit payment the upfront deposit and the remaining outstanding balance are paid automatically
Using invoice to keep record of payment
Invoicing is really good way of keeping track of payments and was another crucial part of the design. Remember the accounting features I mentioned earlier, this is where it happens. My goal was to make it easy to create invoices even without prior knowledge and structure the invoices using a user-friendly interface so it’s easy to keep track and account for the payments
I did so by designing a simple form for the invoice. Freelancers just have to fill in the details. And the invoices page has the invoices arranged for easy navigation, filtering, and sorting. Everything is presented to the freelancer at a glance with few clicks. The freelancer can see the total number of invoices, those that have been paid, unpaid, and overdue.
Client's view of invoice
It was almost time for me to finalize on my design and the solution but I had to test it out first. I had a session where I described the working of the product to some freelancers and they were excited about it and wanted to see how it works. I presented a prototype to freelancers. My goal here was to discover how they feel about the product and how easy it is for them to use the features. I noticed freelancers were pleased with how easy it was to navigate and how everything is on one platform.
I presented another prototype to the clients to find out how they feel about the product and how the features impacts how they work with the freelancers for every project. They were pleased with it but there was a little problem they voiced.
Direct Debit the controversial payment method
Apparently they had an issue with the payment method. They said it felt like an ultimatum and didn’t find it fair. This caused a conundrum for me. What was once the best option wasn’t resonating with the clients. Now there’s a new challenge; What can I do about the direct debit payment method.
I asked clients what problem they had with the payment method and discovered they wanted to be able to use other payment methods and still didn’t feel very comfortable dropping their account details with a third party. I had to make a hard choice; add other familiar payment methods allowing clients to choose their preferred method
Making payment less controversial
I implemented this by adding a new feature to the payment section on the contract which allows other forms of payment methods to be used. This is reflected on the invoice sent to the client allowing them choose which payment method they prefer. But I still wanted to make direct debit the preferred payment method so I made it the recommended payment method. This signified to the clients that this is the preferred method of payment but they’re free to choose from the rest.
After completing this I tested the new design with both the freelancers and clients. The response this time was better. Both parties were more positive about the design. The clients felt more involved as they could now choose their preferred payment method and the freelancers were pleased with the multiple payments methods because they already use some of this methods and have a registered account. This way they can keep using it and not have to transfer funds or create a new account.
In conclusion
At this stage I was content with the design and saw its potential to solve the problem. Freelancers now know the significance of using contracts, they use them for every project and they find it easy to record and keep track of their payments using invoices In the future more features can be included to the web app such as allowing freelancers create proposals, instant messaging, and a mobile version having all functionalities as the web version. With this design freelancers have all the tools they need to ensure they get paid on time and keep records of payments in one place.