Over the last few months, I’ve been working with graphic designer Jonny Tansley on a brand and design for my own site, www.glenscott.co.uk.

It’s progressing well, and you can see a small sneak preview of the branding below:

Development of the new site continues, and I will post updates on the blog as it gets closer to launch.

In the first part of this post, I looked at a few essentials that need to be considered when moving to a freelance role, including motivation, company structure, banking and marketing. This time we look at the slightly less glamourous, but just as important, subjects of tax and record keeping, invoicing and useful software. Again, I hope this post is useful for any other software developers considering going freelance.

Tax and record keeping

Whether you decide to use an accountant or not, it’s essential to keep records relating to your incoming and outgoing transactions. The Business Link site has an excellent guide on setting up a basic record-keeping system, and have some sample spreadsheets that you can use as a starting point. The records include:

1. Cash sales and purchases/expenses book
2. Sales ledger
3. Purchase ledger

These records will give you a thorough overview of any money going into, and out of, your business account.

When you open your business account, it is likely that you will also have the option to open a deposit account at the same time. This can be used to set aside money to pay your tax bill each year. For sole traders, income tax will be calculated when you fill in the annual Self Assessment form.

You can reduce your tax bill by claiming tax relief on business expenses. Business expenses could include advertising, travel costs and legal fees. If you work from home, it can also include part relief on costs such as broadband and even electricity. The following links on the HMRC site give further details:

• Tax allowances and reliefs if you’re self-employed
• Types of allowable expenditure when working from home

Invoicing

If you’re not invoicing, you’re not going to get paid. Therefore, you must keep on top of your invoice management. Freelance Advisor has a set of invoice templates that can be used as a starting point for creating your own. Make sure you issue invoices promptly, and be clear about your payment terms. Standard terms are 28 days, but you may wish to shorten this if you are just starting so you can get money into your business more quickly. Don’t be afraid of chasing late or non-payment of invoices.

As your business grows, you may wish to consider using a software package that manages both accounts and invoicing. Currently topping freelancesupermarket’s league table of accountants is Crunch. Crunch can handle both accounting and invoicing for a flat monthly or yearly fee. If you are a sole trader you need to switch to a limited company to use their service, a task which they will advise you on.

Useful software

There is a plethora of free software available to make freelance life easier.

Google Docs is an excellent way of organising documents, spreadsheets and databases for your business. One big advantage of using this is that your documents will be available from any machine that has internet access. The screen grab below shows a simple collection that I have put together to organise my documents. The top level collections are Accounts, Invoices and Quotes.

Skype is a great way of keeping in touch with your clients by instant messenger, voice or video call.

Ta-da List is a simple list manager, great for managing your “to do” list of day-to-day tasks.

SlimTimer is a simple browser-based application for tracking time spent on tasks. If you are billing by the hour, this is an excellent way of recording time spent working on a client’s project.

Summing up

One of the major challenges of freelancing is being able to juggle the actual work with the business administration side of things. As long as you are able to set aside a few hours each week to keep on top of the administration, you will have no problems. I hope that my experiences thus far can be of use to others setting out on the freelance path.

Read Part 3 of this series.

I have reached a natural fork in the road of my career as a software developer. Having been a full-time employee for the last 11 years, I have decided to take the plunge and start offering my services on a freelance basis.

After spending the last couple of years managing an engineering team, I am going back to hands-on development. The following post captures the experiences of my first month of freelancing, which I hope will be helpful to anyone else considering moving in the same direction.

Motivation

It’s worth considering the main motivating factors behind my move into the freelance world. There have been two major life events that have led me into choosing this path:

1. Being made redundant from my last job
2. The birth of my first child

Being made redundant has given me the opportunity to try freelancing for the first time: I now feel that I have the experience necessary to venture out on my own. I also want to spend as much time around my newborn son, so the option of working from home is very appealing. Furthermore, I wanted increased flexibility of my working hours, rather than being tied to a 9 to 5 routine — if baby is not sleeping, then I don’t want to worry about having to wake up early for work!

Company structure

After deciding to freelance for a living, I had two immediate decisions to make:

1. Choosing a business name
2. Deciding upon a business structure – sole trader or limited company

To keep things simple, I have decided to trade under my own name and set up as a sole trader. Setting up as a sole trader is very simple, and has less administrative overhead than a limited company. However, some larger companies may not hire freelancers that are self-employed.

Details on registering as being self-employed can be found on the HMRC website:

HM Revenue & Customs: First steps to register as self-employed

Banking

It’s essential to separate your personal and business finances, and that means getting a business account. Most high street banks offer business facilities for start-ups, usually without any fees for a certain period of time. Many also offer other perks such as free accountancy software or free business training. The most popular business accounts from the high street branches are:

• Barclays
• Lloyds TSB
• Natwest
• HSBC

I went for an account with Natwest as they were offering 2 years with no fees, and also one years access to Regus business lounges which may come in handy for client meetings.

Marketing

Marketing is all about bringing in work. I am in a fortunate position to already have a few contacts that require my services. However, it is crucial to be able to bring in new clients, and this is where marketing comes in. One thing that I have kept in mind as a freelancer is this golden rule:

Everyone you meet as a freelancer is a potential client

Potential clients could be your previous company, your friends, your family, your neighbours — the pool really is vast!

Another important point to remember: as a freelancer, you are marketing your skills. So, it’s important to highlight these whenever you come into contact with potential clients. Get business cards with your details and hand them out to everybody! Moo do a great range of designs, and are priced at a reasonable £10.99 per 50.

Spread the word via social networks. Updating your profile on sites such as LinkedIn, Facebook and Twitter can help market your skills for free.

Make sure you have a website with, at the very least:

• Details of the skills you have
• Examples of the kind of projects you have worked on, or are able to work on
• How people can contact you

I have started with a simple page containing the above details, that I expect to expand over time:

Glen Scott – Freelance Software Development

If you can, start a blog. Writing posts can be an excellent way of highlighting your own skills and attracting new clients. Make sure that it’s clear from your blog posts that you are available for hire. For example, I have inserted the following small ad on all of my existing blog posts:

If you have specialised in a particular area, make sure that you are clear about this. For example, is there a particular language that you prefer to work with? A favourite framework?

Useful resources

One book I can thoroughly recommend is Brilliant Freelancer by Leif Kendall. This covers all the main aspects of freelance life, and is written in a very accessible manner. The author also uses some many real-life experiences from other freelancers to highlight various aspects which is very useful.

Many sites are available to help freelancers: here are a few that I’ve found useful:

• Freelance Advisor
• Professional Contractors Group

Summing up

Going freelance is a huge change from what I have been used to, but a challenge I am already thoroughly enjoying.

Next time, I’ll look at these aspects of freelancing:

• Tax and record keeping
• Invoicing
• Useful software

Read part two of this post.