This article was originally published in March 2015, but with our app launching soon we thought we’d update it to include some extra tips and ideas.
So you’re all set up as a MUA, the bookings are rolling in and you’re living your dream. However, it can’t all be glamour and fun – now comes the serious bit. How on earth are you going to manage all your invoices, ensure a steady cash flow and keep your new business in the black?
In fact invoicing proved to be such a pain in the behind to Ashley that we decided to make it one of the key features of TinyPA – the app we’ve built to help makeup artists manage their businesses – more on that at the end!
This article will tell you all the things you need to think of when starting your makeup business so that you get paid for your hard work, with hints and tips on how you can make invoicing less of a headache. We’ll cover:
- What you need to think about when deciding how and where you get paid
- How to invoice so both you and your clients are happy
- Two killer tips to keep your cash flow steady
- How TinyPA can make invoicing easier and more organised
So lets get into it – where do we begin?
1. Decide how you want to be paid and where
So you’ve got the booking but how are you going to get that cash? The easiest way is by bank transfer, cheque or cash. You could also offer credit card payments – however, for this you would have to ask your bank to set you up with a Merchant Account (which can be expensive), or use a third party provider such as PayPal or Worldpay (who will charge a percentage on each transaction). The ability to accept credit card payments can be useful if you are dealing with impulse buyers or international customers, and often allows you to quickly track which invoices have been paid or not, but it isn’t strictly necessary and so you’ll need to decide what’s right for your business.
So where are all your earnings going? You could just get it all paid into your personal current account. Perfect…? Actually no! With all those in and outgoings things could start getting confusing.
Having a separate account for your business will make it easier to stay on top of your cash flow, make sure you stay in the black and keep your finances in order come Tax Return time. You can get a current account at most High Street banks but shop around – some offer additional perks such as credit cards, overdrafts and favorable interest rates.
However, if you are a Partnership or Limited Company and do not declare your earnings through Self Assessment then you will have to have a Small Business Account (for businesses with a projected turnover up to £2m. Man, that’s a lot of makeup…). But, just to warn you, banking in these accounts is no longer free. For each cheque, automated transfer or cash paid into your account, expect to pay a small fee and/or percentage of the total. Ouch. So again make sure you shop around to find the best deal. For more info on your business type and tax, check out our article on setting up your business and operating legally.
2. Raise an invoice
So you’ve got the booking in the diary – now you need to send the client an invoice to let them know how much they owe you and, more importantly, when they need to pay to secure the booking.
The key things you need on your invoice are:
1. The word INVOICE clearly written
2. The date
3. An invoice number – some people start with 001 and work up. It doesn’t really matter as it is for your reference and keeping track later
4. How much they owe you and how they can pay you
5. How long they have to pay – usual terms are 7 or 30 days from the date of the invoice but it’s up to you.
It’s also a good idea to put yours and the clients name and address, along with the date of the job, and to ask for a deposit so you won’t be out of pocket if everything gets cancelled.
In TinyPA invoices are set up like this as default, although you can customize them as you see fit.
Killer Tip No.1: Spread the load
For certain bookings, such as weddings, you may also need to invoice for any trial sessions you do. To keep things seperate and organised, and to provide a steadier flow of income, Ashley issues two invoices with deposits and final balances, one for the trail and one for the wedding.
Invoice 1: Trial. Deposit payable 7 days before the trial and the balance on the day of the trial
Invoice 2: For booked date. 50% deposit to be paid within 7 days of the trial to secure the booking and remainder to be paid 7 days before the day of the booking
It’s up to you how far in advance your client can cancel without having to pay the invoice and under what circumstances (if any) deposits are refundable. Whatever you decide should all be clearly stated in your Terms and Conditions.
3. Keep an eye on invoice payment
This is when you need to keep your Organised Hat on and stay on top of your invoices to ensure you don’t end up doing work without getting paid. In our previous article on managing your bookings we recommended setting aside regular time to manage your admin, and invoicing will be a part of this.
If you do find clients are not hitting their deadlines for payments, here’s some example follow ups you could use to gently prod them:
Looking forward to seeing you on Saturday 24th February. Just a quick reminder that your payment is outstanding – please let me know if there are any problems.
Just to remind you that I’ve still not received payment for your booking on 24th February. I require payment at least 1 month before the booking otherwise I may have to cancel.
It can be tricky dealing with a non-payment as even though you need to get paid you don’t want to damage your client relationship (and therefore any glowing recommendations you may get!) Keep those reminder emails professional, polite but concise – and keep letting them know your terms and when you will have to cancel.
Killer Tip No. 2: Little and often does the trick
Lots of gentle reminders about the outstanding invoice will make sure things don’t escalate too quickly – and to do this you need to be keeping track of all your invoices. Check out our article on Managing your Bookings for more on this.
And finally get things organised and in one place
If you’re just getting started out then an spreadsheet can be sufficient to track your invoices. Provided you number them sequentially and keep track of what’s paid and what isn’t you’ll be able to stay on top of things. However, as your booking load increases a spreadsheet can prove tricky to keep up to date.
This is a big reason why we decided to build TinyPA – to help Ash and other makeup artists keep all their bookings and invoices organised, and their status up to date.
And importantly we wanted to make it possible to dash off an invoice on your mobile phone – or from whichever device you’re on.
We’d love to hear your suggestions and comments – how do you manage your invoicing? Had any issues that you’ve overcome, or got any outstanding questions? Drop us a comment below!
Want to continue to optimise your makeup business? Register for our course below on doing just that