Introduction
As a freelancer, you are free to work on your terms. You are your boss. But there are many aspects which must be considered and carefully planned before you begin your venture. Many responsibilities are to be scrutinised in advance to avoid stress. To read more about freelancing, check out our other blogs for freelancer newcomers.
In the digital age, it is easier to find and work on international projects and receive international payments. However, this requires a great deal of understanding and research into cross-border payments and foreign currencies to ensure smooth payment navigation. Receiving payments safely and securely should be a top priority as a freelancer, especially when international fund transfer is involved.
There are so many aspects such as payment methods, payment models, conversion fees, etc., that can be very complex to understand initially.
Managing finances as a freelancer can be a hassle when you want to receive money from abroad. In this article, we will look at how to deal with currency exchange and cross-border transactions as a freelancer:
Currency Exchange
- Communication
Being clear and concise is a key element while working. If you have clearly discussed and mentioned aspects of the project with the client, including how you wish to receive your payment, it makes the job easier. Remember to consider the currency and conversion rates and communicate this to the client. Ensure that these aspects of the project are cleared early on and included in your freelance contract for future reference and proof in case of a legal dispute.
- Financial Planning
Since your income isn’t fixed, plan your income and expenses in a way that can help you live comfortably. Planning helps you handle finances and navigate your personal and professional life seamlessly. Communicate with your client and find a way which can help you secure your income and keep the project going. See if you can set milestones within a project and get paid for each milestone. This will keep both you and your client happy. Additionally, you can also choose to get paid a percentage of your fees at the beginning to avoid potential scams.
- Stay Updated
Stay updated about the laws and obligations on currency exchange in your and your client’s country. Understand and stay updated on the financial market in both countries. Communicate with the client about the bank operation days and holidays which will ensure seamless transactions and avoid transaction timeline issues.
Cross-border transactions
- Invoicing
Remember to include important aspects such as the contact details of you and the client in the invoice. Even if you have already communicated and included the details like payment method, pricing model, potential conversion fees, currency exchange rates, etc., it will still need to be well listed in your invoice. To learn more about creating freelance invoices, click here.
- Tax compliance
Remember to understand the tax guidelines in your country. Taxation can sometimes even have special laws or regulations when you handle international projects since they involve an international money transfer. There can be different rules and charges with forex income. A salaried professional may not have to worry about taxes as it is usually discounted before they get their salary. It is also essential to keep all the documents and paperwork organised in advance to avoid missing due dates and late payment penalties. Read more on freelance taxation here.
- Security
This priority cannot be neglected. There are so many frauds happening with freelancers, or they do not get paid for their work on time. This is unethical. Be aware of the potential scams who would give “tests” and eventually ditch you. If you spot a red flag in a potential customer in any way at the initial stage, do not take the project. As this person is from a foreign nation, you may never get to find them and end up not getting paid for your hard work. It is better to be safe than sorry. Try to build a trustworthy relationship with your clients and establish a relationship to create a healthy working environment for you and your clients.
Summing up
As a freelancer, always ensure your cross-border transactions are secure. Remember to seek legal advice and action in case of an issue. You can choose an escrow service to ensure both you and your client feel safe. Additionally, consider signing up with a cross-border payments platform. The global payments platform helps you create multi-currency accounts so you can maximise the workforce without having to worry about cross-border payments. To know more, contact BRISKPE today! BRISKPE assists clients to receive international payments in India effortlessly saving time and money on hefty fees.
