5 Most Common Payment Problems Freelancers and Creators Face (And How to Fix Them)

By
Lauren Russo
August 5, 2021
The beauty of being a freelancer or creator lies in the freedom it provides, but that freedom has a cost. Although you might be free from the office and the hangups of a company structure, that also leaves you in charge of everything from conceptualizing, producing, editing, and writing to scheduling, billing, doing taxes, providing customer service, and tracking down late payment. You might be able to set your own hours, work from wherever, and choose your own clients, but at the end of the day, you’re still running a business.

The beauty of being a freelancer or creator lies in the freedom it provides, but that freedom has a cost. Although you might be free from the office and the hangups of a company structure, that also leaves you in charge of everything from conceptualizing, producing, editing, and writing to scheduling, billing, doing taxes, providing customer service, and tracking down late payment. You might be able to set your own hours, work from wherever, and choose your own clients, but at the end of the day, you’re still running a business.

Wearing all of the hats can be exhausting, but there are solutions out there. Let’s check out 5 common problems solopreneurs face and how to solve them.

#1: Tracking payment = Endless spreadsheets

The Problem:

No one ever found major inspiration by staring at an accounting spreadsheet (if you have, please reach out... we’ve got questions). Having to update and stare at spreadsheets just to track who has paid and who has not is costing you 5 to 10 hours a week that could be better spent creating.

The Solution:

This is one of those times where “work smarter not harder” applies.

You could hire a personal assistant or manager to take all of this off your plate...  OR you could sign up for Lumanu, create a FREE account, and automate your invoice creation, tracking, and payment reminders all in one place. With Lumanu, it only takes a couple seconds to create a professional invoice that has payment process built in and all of your tracking, status updates, and reminders will happen automatically in your app dashboard.

With Lumanu, you can...

1) STOP creating invoice templates

2) STOP having to manually track payment status updates

3) STOP logging details of collaborations in spreadsheets

4) STOP sending endless followup emails to “check in on payment status”

Click here for an example of what the invoice looks like. It’s simple, sleek, professional, and most importantly easy for your clients to pay you instantly to your bank account.  

#2: Chasing down overdue invoices = Constant follow-up emails

The Problem:  

Having to chase down payment from a client can make things feel tense and awkward.  Sending endless “Hi, just checking in to see if we are on track for payment” emails can be agonizing for both sides to endure, and can really put a damper on the relationship.

The Solution:

In times like these, it would be nice for you to have a collections agency to help chase down the payment to protect the client relationship.

Instead, you can use Lumanu. Not only will Lumanu automate the payment reminder emails, it will also chase down late or missing payments on your behalf. If you find yourself in a situation where your Lumanu invoice is overdue, just chat Lumanu and give them the scoop. They will have a real human step in and help you get the money in your account ASAP.  

#3: Net payment terms = Constantly waiting for money

The Problem:

Ever hustled to complete and deliver work for a client on a tight deadline, for them to turn around and hit you with the terms of their months-long net-60 payment cycle? Unfortunately, it’s unfair—but not illegal. And it’s not an uncommon feature of working with bigger brands or corporations.

Experienced freelancers and creators will advise you to negotiate payment terms up front. As a business owner, cash liquidity is king—so the best case scenario is being able to work out a 50% upfront and 50% due upon completion with a brand client. Still, not all brands will be open to this type of arrangement because of the bureaucratic red tape that comes with bigger corporations.

The Solution:

You don’t have to accept defeat. With Lumanu EarlyPay, you can cash out on YOUR terms without disrupting the brand’s payment terms. When you use Lumanu to send invoices, you will have the option to cash out instantly with Lumanu EarlyPay for a small fee.  

Once you cash out with Lumanu, that’s it. The money is yours to spend. You don’t have to worry about anything else—Lumanu will work with your brand partner directly to collect the payment per the brand’s preferred payment process and timeline. It’s a win-win.

#4: Payment processing fees = Paying to get paid

The Problem:  

When it comes to getting paid safely online, most freelancers face limited options that often times come with a high fee to not only collect payment, but to get the money into your bank account. Trying to evade the fees can get you in hot water and even cost you your pay or get you locked out of your account.

Even easy-pay solutions like Paypal, Quickbooks, and Venmo can charge fees up to 3.4 percent per transaction.

The Solution:  

You shouldn’t have to pay to get paid. The best solution (besides asking for a check, which...LOL) is to use a payment processor that does not charge fees to invoice, collect, request, or process payments. And the only solution out there built specifically for creators is Lumanu.  

We’ll say it again louder for those in the back: LUMANU DOES NOT CHARGE ANY FEES FOR CREATORS TO INVOICE, COLLECT, OR PROCESS PAYMENTS.  

#5: Account security = Constant stress about getting locked out

The Problem:

Obviously, you have to provide some information to a client or brand to get paid, but you shouldn’t have to provide both your SSN AND your banking information to a random brand manager when you don’t feel comfortable. How do you know if the brand you are working with has invested in security infrastructure to house your financial and tax information on secure servers?

This is often why many creators and brands will opt to use Paypal to process the transactions safely online.  But then you’re back in a loop with the problem of fees... transactions are subject to the 2.9% +30 cents seller fees. Many creators have been caught and penalized with frozen or suspended accounts when trying to evade these fees by using “friends and family.”  When this happens, you may lose access to your funds entirely or be locked out for months.

The Solution:  

Instead, opt to use payment processors that have secure technology to encrypt your information such as Plaid.  

Lumanu uses Plaid to link your bank so that you can securely accept payment directly to your bank, instantly, with no fees. Linking your bank through Plaid is entirely encrypted. At no point can Lumanu access, view, or sell your data and they will have “deposit only” access to your bank.

If you’ve read this far, you now know how Lumanu can solve it all

Lumanu is the app built for creators, and the answer to all of your payment woes.  

1) End the endless spreadsheets → Lumanu has automated tracking, invoice creation, reminders, and status updates all in one place.

2) Never chase down overdue invoices or deal with missing payments again → Lumanu automates friendly payment reminder emails, and can also step in to act as your personal collections assistant when you need help chasing down payment. Protect your relationships with your clients AND get paid on time.

3) No more waiting for payment → Lumanu EarlPay helps you fast forward to payday and cash out on your own terms without disrupting your clients’s payment preferences.  

4) Stop paying to get paid → Lumanu is free for creators to invoice, collect, and process payment directly to their bank without any transfer steps or fees.

5) Let go of security stressors → Lumanu uses the fully encrypted bank linking solution Plaid to gain deposit only access to your bank and will hold a balance or lock you out of your money.

Ready to get Lumanu? Get early access here.

Lauren Russo
Senior Product Marketing Manager
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