How to Easily Conquer Your Cash Flow Problems as a Freelancer

There are certain phrases out there with the magical ability to simply shut off my brain, regardless of whether they’re relevant to me or not. One of the big ones? Cash flow.

It’s one of those phrases that sounds like it should come out of Charlie Sheen’s mouth in an 80s corporate blockbuster… and I would much rather not listen to Charlie Sheen at all. This, my friends, is where I have to tell myself to get over it, because cash flow is a big deal.

For freelancers, cash flow is an epic deal.

Let’s unpack this phrase to make it a little more relevant and less like one should be wearing a power suit while saying it.

Cash = Something We Need, Big Time
Flow = Steady, Continuous Movement

Basically, we need cash to be flowing in and out of our businesses like a dependable river… or a chocolate fountain that never gets unplugged. And how do we do that? I think good ole Aesop got it right with his fable “The Ant and the Grasshopper.”

But first…

Before we explore an ancient fable and use it to understand cash flow, I want to briefly touch on the importance of a killer invoice when it comes to getting paid:

An invoice is one of the most effective ways to show your clients that you mean business when it comes to getting paid for your work. A casual, vague invoice tells your clients “Hey, it’s cool, man. Just pay me when you get to it,” while an invoice full of specific detail and clear expectations says, “You’re cool. I’m cool. I do good work, and you pay me for it… in no more than 15 days. Cool?”

So, remember, an invoice should include:
-A specific due date as well as your payment timeline (Net 10, Net 15)
-Itemization
-Easy payment options

Those are just the basics, though. Click on over here for a more in-depth look at invoicing.

Alright. Back to Ant, Grasshopper, Cash Flow.

In a very small nutshell, the ant and the grasshopper fable involves a frivolous grasshopper who sings his entire summer away, rather than stocking up on food for the upcoming winter. As the weather cools and the food gets scarce, he goes to his harder-working insect counterparts, the ants, and begs them for food.

Those ants totally turn him down.

Obviously, we’d all like to be freelancing ants: studiously keeping our heads down when the pay is good, and not fearing for our lives during a dry spell. Realistically, though, many freelancers end up following the ebb and flow of the feast or famine cycle, becoming intimately acquainted with Ramen noodles in bulk and the subtle art of casually mentioning your light bill is overdue in the presence of you parents and hoping they write a check.

How do we gracefully handle the feasts so that we never have to ride out a freelancing famine?

Take a hard look at your clients.

Are you taking in and maintaining the kinds of clients that will keep your cash flow steady? Clients who communicate openly, pay quickly, and want regular work from you are the ones who will keep you from having to deal with cash flow problems, and are the ones you should be focusing on in your search for work.

If you’ve got problem clients, it’s time to look at them and reevaluate. Is the work you do for them minimal enough to not cause problems as you wait for payment, or are you logging hours of work and not getting paid promptly?


In order to preserve your cash flow, sanity, and credit rating, it’s time to have a serious chat with your problem clients. If they can’t honor your payment needs, it’s time to find someone who will.


Another good idea is to diversify your client base. Do you think those brilliant little ants are banking on one single kind of food to get them through the winter? No. Crops die, kids get old enough to stop dropping food on the ground, and those ants need options if they’re going to feel secure.

It’s no different with you and your clients. If you put all of your financial eggs into one client’s basket, or even one specific niche, you run the risk of losing your entire income. There’s nothing protecting your biggest client from suddenly going out of business, and different industries are constantly in economic flux. Choosing multiple clients from a few (not a million) different areas of industry will help keep you afloat if one of your specialty niches is sinking.

Take a hard look at yourself.

A big part of cash flow is finding the clients to actually get that cash a-flowin,’ so it’s a good idea to check in with your marketing strategies. Do you need to spend more time promoting your services? Do you need to change your tactics? What are others within your industry doing to promote their businesses?

If you’re experiencing a famine or, at the very least, some freelancing downtime, ramping up your marketing efforts will make you easier for new clients to find, and help you stay consistently busy.

The other thing to look at is your spending habits. Are you following in the grasshopper’s footsteps? It’s essential to be aware of how much you spend on a monthly basis and what you spend money on. We’ll talk about numbers here it a bit, but what I’m focusing on are your habits. Are you aware of how much money you spend on day-to-day items? Do you even need those day-to-day items?

A freelancer without a budget isn’t a freelancer for long.

Take a hard look at your numbers.

Sometimes, the first step to a more consistent cash flow is to simply see what kind of cash flow you actually have. This is a great time to create a basic cash flow spreadsheet.

Now, you can get all crazy with formulas if you want, but a good look at your cash flow can be obtained by simply using columns for clients and months, with a running total at the bottom. This will show you, each month, what kind of income you can expect. Coupling this with a spreadsheet of your monthly expenses will give you a better idea of how much money you’ll need, and when.

(If building spreadsheets give you headaches, you’re in luck! We’ve created a handycash flow spreadsheet for your personal use right here, so click on over when you’re done reading and get started!)

Once you’ve got your business’ cash flow in front of your eyes, you’ll be able to create a plan that will send you in a more financially stable direction. Instituting a salary for yourself that sufficiently covers your personal bills and expenses will keep you from depleting your business stores, and build a comfy cushion for those times when unexpected expenses crop up.

You can even try changing and staggering your invoicing dates, if your clients are willing, so that you can avoid long periods of time without payment.

Stay aware and practice moderation.

I hate to fault that poor grasshopper for singing; it’s a creative endeavor, and that in itself is commendable. Singing all summer long, though? Without thinking ahead? That’s the part that makes it hard to feel sorry for him.

Obviously, I’m using this fable to make a point; it doesn’t mean that you’ve got to follow it to the letter. To be honest, I don’t think those ants had it all right, either. All work and no singing (or working on personal creative endeavors) doesn’t make much for a full life, and since the hope for a full life is what keeps us freelancing, I think it’s a good idea to fall somewhere in between “ant” and “grasshopper.”

Stay aware of your financial needs, sing and eat in moderation, and cultivate a cash flow for your business that allows you to live a full and satisfying life.

Over to you!

Thanks for reading! Got some killer wisdom you want to share? We’d love to hear from you below!

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Originally published at approveme.me/freelancing

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