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TORONTO — Nov. 13 2018 FreshBooks, the #1 invoicing and accounting software in the cloud designed exclusively for self-employed professionals and their teams, today released results from its new study: Money Matters — The Freelancer Finance Report.
27 million Americans plan to become self-employed by 2020. To make the transition from traditional employment to a freelance career easier, Money Matters — The Freelancer Finance Report breaks down the challenges freelancers face at different stages of business, and analyzes the financial habits of top-earning freelancers.
For this report FreshBooks, in conjunction with Research Now, surveyed more than 2,500 people in the U.S. who work full time as independent professionals, or small business owners.
“Freelance income is often inconsistent, which makes money management especially difficult. Whether you’re just starting out and searching for freelancing tips for beginners, or you’re an established small business that wants to maximize your earnings, the data and insights from Money Matters will help you find financial success in self-employment, faster.” Matthew Baker, VP of Strategy, FreshBooks.
Findings From The Study Reveal:
The Top Challenges Freelancers Face
- 37% of freelancers with businesses under two years old say their biggest challenge is finding new customers.
- As freelancers gain five years or more experience, their most significant struggle shifts to finding talented staff or contractors.
35% of Freelancers Struggle Significantly with Financial Management
- The majority of freelancers who earn $100,000 or more regularly implement financial best practices such as maximizing tax write offs, and separating personal and business finances.
- Conversely, 1 in 10 freelancers who earn $50,000 or less don’t implement any financial best practices.
Freelancers Feel at Odds with the Current Tax Code
- 20% of freelancers spend 10 hours a year or more filing their taxes — which is three times as long as traditional employees.
- Freelancers are 50% more likely than a traditional employee to pay a professional to file their taxes.
- 31% of freelancers say they’d rather get stuck in line at the DMV than file their taxes.
Prospective Freelancers Are More Likely to Consider Fin-Tech Solutions
- In 2017, 75% of freelancers said they were uncomfortable working with financial technology companies (fin-tech). In 2018, over half of Americans planning to become freelancers said they’d consider working with fin-tech solutions as an alternative to banks.
Freelancers Aren’t Retiring
- 1 in 3 freelancers say they’ll have to work past retirement in order to make ends meet, but another 6 million freelancers say they’ll bypass retirement because they love what they do.
FreshBooks conducted this study in collaboration with Research Now. More than 2,700 people who work full time – either as traditional employees, independent professionals, or small business owners – were surveyed online in November of 2017. Samples have been weighted (as required) to reflect various characteristics of their target populations (e.g., age, gender and industry) leveraging data from the U.S. Census, U.S. Small Business Administration, the NAICS Association and other sources. The study’s margin of error is +/- 2.3% at 95% confidence.
FreshBooks is the#1 invoicing and accounting software in the cloud, designed exclusively for freelancers and growing service based business owners. The company has helped more than 10 million people worldwide process billions of dollars with its ridiculously easy-to-use invoicing, time tracking, online payments and expense management features. Recognized with eight Stevie awards for best customer service in the world, the company’s mantra is to “execute extraordinary experiences everyday.” Based in Toronto, Canada, FreshBooks serves paying customers in 160 countries. www.FreshBooks.com
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