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The Filipino Freelancer’s Guide to Cash Flow Management

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The freelance market in the Philippines can be tough and unforgiving. Without the right connections and a steady pool of clients, your funds can dry up in a matter of months—even days depending on how green you are.

If you’re a ghost writer or a freelance creative, achieving a stable cash flow can be as simple as managing your cost of living and your project fees. However, cash flow management could be a challenge for freelancers focused on selling goods to customers. The lack of reliable shipping services and secure payment options here in the Philippines doesn’t help either.

The following is a basic overview of effective cash flow management to make sure you don’t flame out on your freelancing journey.

1. Get Diverse Clients


Big clients may seem like a dream to a freelancer. One big client can provide a steady flow of work and income. However, they are few and far between and usually require more tedious paperwork.

A diverse client roster—on the other hand—that includes some smaller, project-based work, is usually a better insulation against the costs/risks of putting your faith in big-ticket clients.

Getting international clients is also a good idea as they usually pay better, but they also might be harder to bill.  Luckily, services like Payoneer helps you simplify cross-border transactions. You can set up payments into one local receiving account, make it easier for your clients to pay you in USD, EUR, GBP, JPY, AUD, CAD, MXN & CY as if they’re making a local bank transfer, make invoices or even pay suppliers with their all-in-one suite.

Once you get the logistics out of the way, it’ll open up a ton of freelance marketplaces like Upwork, FreeUP, Crossover, OnlineJobs.ph and even expanding your shop through Amazon, eBay, or Shopify.

Pro tip: Start getting small clients through word of mouth! Store your portfolio/product lineup online and spread the word whenever you have the chance. Exhaust your connections!

2. Set Prompt Payment Terms


This is where we get very specific. Aggressive payment terms, such as upfront payment or short payment periods of 15 days or less, ensure you receive money promptly after providing services. Set this expectation at the very beginning of your agreement. For products, this should be almost instant.

If you give a company 30 days to pay, it will typically use that time as part of managing cash flow for its own business. Don’t let late payments fester; communicate consistently and do not complete additional work without receiving your hard-earned money.

3. Budget


It’s hard to take cash-flow management seriously if you do not keep a detailed budget. A detailed budget gives you visibility into your anticipated revenue and expenses for a period of time. If the revenue-expense relationship is unfavorable, efforts to earn more business and reduce expenses contribute to improving your cash flow.

4. Cut Costs/Borrow Money Wisely


On the cash outflow side, minimizing expenses is a great place to start! If you’ve exhausted your wiggle room and have cut costs on all corners, you can also look for opportunities to borrow money at a low rate with favorable repayment terms. With low interest rates, the costs of borrowing money become advantageous as you can hold on to your cash longer.

5. Look for Great Payment Services


You are not alone in the world of cash flow management. There are service providers, like Payoneer, available to help you collect payments on-time, maintain revenue and expense records, communicate with clients, and make predictions.

All of these features help you receive payments quickly and have visibility for your cash flow into the future. These efficiencies enable you to focus on attracting new clients and producing quality work.

The Takeaway


The ability to manage cash flow is critical to freelancers that want sustained success, especially in the Philippines where freelancing is still in its adolescence. Follow these basic strategies for optimizing cash flow management to build a business that is viable and thriving for a long time to come!

This article was originally published on Payoneer’s website.

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