Invoicing and salary

Hello there!

Sorry for writing in English, but my Swedish is like a 3 year old toddler :sweat_smile: ,

I have worked in a consulting company in Stockholm for a short period and then got employed directly at the client, but am thinking about the freelance gig now due to the connections I have made in my field and i see promising demand in it. I have understood most of the things through researching online. However, I have something in mind about bringing a designer in with me that I can pay him a usual salary but the following information is still not clear for me.

So I have a beginner question, When do you usually send your invoice to the client, Is it at the end of the month? or before the 25th, so you can get your salary on the 25th.

And in this case, does that mean if you’re a consultant at a konsultbolag you get paid your salary from the company own money before receiving the invoice payments from the client? Or do they pay you after receiving the invoice payments?
Is it possible time wise to do it like that?

Thank you in advance.

2 gillningar

Hello @Ally and thank you so much for your contribution to the community. The freelancing gig is certainly a promising road for anyone who has worked as a consultant before (if they can sell you, you can basically sell yourself too, in my opinion, and i recommend all hired consultants to dare to take the step of becoming self employed instead). Read more about that in my freelance guide article here: Frilansarguiden - Hur du blir frilansare | By Anna Leijon (i think you can translate it in your browser. I will write an english version of it as well down the road)

Anyhow, now to your questions. First of all, why do you want to bring in a designer “with you” and do you mean hiring him/her in your own company? Why is that something you want to do?

You usually send your invoice at the very beginning of the month every month. Probably after the last day of the month (due to time reporting reasons). However, you are then getting paid at a later stage (of course). Usually 30 days notice on the invoice (but can also be 60 or even 90(!!) days - this is stipulated in your contract with your client). The big companies can force you to invoice 60 or 90 days later (you just have to accept their terms if you want to work with them). But it is most common with 30 days. So, in effect, in can be as late as 30 + 30 days later (if you have 30 days notice agreement on the invoices). Therefore, it takes a few months to get some money into your company. Could be good to save up some money privately so you can afford your living situation OR, we also have a setup called the “1 year freelance deal” where we help people to become self-employed and particularly regarding the financial arrangement that is maybe something worth considering - check it out here: Hiring Tech Talents Aiming to Become Self-Employed | By Anna Leijon

The consultancy company probably pay you before they have received money from the client you are working at. That is how it works.

Let me know if you have any other questions and greatest of luck to you!!

BR,
Anna

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Hi @anna ,thank you for the reply. I have read most of the articles you’ve written (Google translate goes along way) about the freelance & consulting industry and let me say that they’re really helpful, informative and well articulated.

Regarding as to why I would do this, a short while ago I had some disscusions with a startup that I used to work with as a consultant, and they wanted me to handle the complete technical work of two of their projects, but I thought I wouldn’t be able to deliver well enough, this is why I’m wandering about the possibility of getting a designer with me. The client themselves don’t mind me doing this, “as long as in both scenarios I deliver what they’ve committed to”. It was all just talk but I still wanted to know if it’s feasible and worthwhile financially to do it like that, hence my question.

Kind Regards,
Ally

1 gillning

Hi Ally,

Not a freelancer myself, but basically: yes, sure. If you have your own AB you can definitely hire a designer that you work together with on one or more projects. All that is required is to be registered as an employer (in addition to having the AB set up), e.g. using this link: Anställa personal - verksamt.se

This is perhaps obvious, but you also want the client to pay for both of you. :slightly_smiling_face: Some clients would perhaps not be willing to take a designer at 100% and a developer at 100%, so the exact terms here would be something that you would agree on with the client (e.g. 100% + 50%, or whatever all of you think works best). Anyway, best of luck in your endeavor! :+1:

2 gillningar

@Ally I see, interesting! :slight_smile: great to hear that you have found my articles useful too. You could either just help them find a designer and perhaps get a “finder’s fee” (usually a one-time amount like SEK 10 000 or something or nothing at all - just helping them finding a designer out of good will for the client), or you can invoice your and his work as a project instead of by the hour (could be a good idea when you are more of a team delivery than a 1 person resource delivery) or you could just invoice for both of you by the hour and pay the designer a salary. There are lots of different setups available to achieve this.

Thank you @haxxormeister for your answer :slight_smile: and I agree. I just want to add that even if you do not hire a designer in your own company, you need to register as an employer anyway in order to pay out salary to yourself :slight_smile: so you will probably be registered as an employer anyway.

Best of luck and let us know if you have any more questions!

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Cashflow-wise, expect to go quite deep into negative cash from your company for the first few months (aktiekapital, laptop, phone, and the usually month + 30 delay of getting paid). You can alleviate it somewhat if you sell (finance) your invoice, or negotiate with your customer, but honestly, don’t.

Business-wise, if you’re going to employ someone, make sure you can get them upfront payment with plenty of time margin, and to follow all your duties as an employer and taxable entity.

If you have the money it’s worth it. It’s a good deal, so you might even find some business-savvy company to help you set things up for a share of the pie.

1 gillning

Hi @haxxormeister ,

Thank you for your reply. Yes, the way you described it is exactly right. And an on demand designer is an option too, at least for the beggining .

Hi @Simon ,
Thank you for your reply. I agree with you, its best to have money in advance and not fall short as you said and this is probably how am gonna go about it, if we actually moved forward. However, you mentioned something interesting (finance/sell your invoices), just out of curiousity, is this actually something that companies do? and who do you sell it to usually? is it other consulting companies ?

@anna , Yeah I’ve thought about taking it project wise instead of hourly, because it makes more sense this way since they want me to handle the complete technical work of the project.
we’ll see how it goes, thanks for the info, really appreciate it :slightly_smiling_face: