Freelancing has become a thriving and increasingly integral part of the UK economy, yet only a small proportion of the country’s freelancers regularly check their finances.
According to recent YouGov research, just 38 per cent of freelancers keep tabs on their overall financial position on a weekly basis, while one-in-ten review financial health only once a year.
To mark National Freelancers Day – established by the The Association of Independent Professionals and the Self-Employed (IPSE) – on 9 June, co-founder and CEO of FreeAgent Ed Molyneux warned that despite the growing number of freelancers, the one area that most let themselves down is their finances.
“If you don’t regularly check your financial information – or have access to all of the details that you need – you won’t know how your business is doing at any given time. And if you only look at this information every three to six months, you run the risk of not being able to identify or deal with potential cash flow problems until it’s too late,” said Molyneux.
In order to give businesses the best chance of success, Molyneux and the IPSE have encouraged freelancers to check their financial health more regularly whilst frequently updating their accounts.
“We know that most self-employed people are great at putting in long hours, working hard and running great businesses, but they need to be better at staying on top of their finances,” added Molyneux.
The comments follow news earlier this year that Britain’s freelancers are paid for just two thirds of the work they should be paid for each year on average due to frequently working unpaid overtime.
Roughly 31 per cent of the hours worked by freelancers in 2015 were not invoiced for, according to FreeAgent research, meaning that the nation’s 1.88m freelancers have been missing out on thousands of pounds in income.
Have you declared the people with significant control in your micro business? Read on to find out why you should.
Sign up to our newsletter to get the latest from Business Advice.