How do independent consultants get paid? Proposals, invoices and payment plans

I am a chartered management accountant, and the first thing that training drills into you is that a sale and cash are not the same thing. Revenue is what you are owed. Cash is what arrived. A business can look healthy on the first and still run out of the second.

In a salaried job you never have to think about it. The money arrives on the same day every month, and somebody else did the chasing.

Solo, you are that somebody. A yes on a call is not money. It becomes money when the proposal is agreed, the invoice is raised, and it is paid.

Before anyone says yes, check you can take money

Do it now, not the week somebody agrees. Are you invoicing as a company or as yourself, and is that set up? Is there a business bank account, separate from your own? Is there an invoice template, and does it carry what your country requires on it?

Whether you need to register for anything, and what you charge on top, are questions for somebody who knows your jurisdiction. I am a chartered management accountant, not a tax adviser. Ask one before your first invoice, not after it.

The proposal: one page

What you heard, what you will do, and what it costs. The first part is the feed back from your call, written down. If they recognise themselves in it, the price is a formality.

One offer, one price. And send it within a day, while the call is still fresh.

How they pay: in full, or in instalments

A payment link means you are paid before you start and there is nothing to chase. An invoice is for the client whose company needs one, and it has a due date, which means it can go past it.

Then decide whether to offer a payment plan. For the buyer, it lowers the first number they have to say yes to. For you, it spreads the income across the months, so one good month does not have to carry the next three. That is cash, not revenue, and solo it is the thing that decides whether a quiet month is a worry or a plan.

Price the plan slightly above paying in full. You carry the risk of the later payments, and the difference covers it.

Your sales and expenses, tracked for you

In a job, finance did this and you never saw it. Solo, it is the job nobody does until the end of the quarter, when there is a pile of receipts and a bank statement to piece together from memory.

This is the automation that pays back fastest, because it runs on things that are already happening.

Sales. When a client pays, the payment is recorded against them: who, what for, how much and when. An invoice that has gone out and not been paid shows up as owed, so you see it before it turns into a chase.

Expenses. Photograph or forward a receipt when it arrives. It is read, categorised and filed, with the receipt kept alongside it.

Once a week, one summary. Money in against money out, with anything still owed flagged, instalments included. The sale and the cash side by side, which is exactly the difference my training drilled in.

An automation does not wait. It runs when you are not there, so the record is up to date on the day you need it, not the day you finally sit down to do it.

What it does not do is tell you what is deductible or how much tax to put aside. That stays with your accountant or tax adviser. What they get from you is a clean record instead of a pile of receipts.

If you have not set your price yet, start with price the consequence, not the hours.