TOP 6 FINANCIAL MISTAKES CRIPPLING FREELANCE BUSINESSES — AND THE  FINTECH SAAS TOOLS TO FIX THEM

The freelance economy is rapidly expanding. Driven by a hunger for freedom and work flexibility, many professionals, just like you, are choosing to leave the traditional 9-to-5 work system and work independently. 

According to a SpendMeNot  report, about 1.57 billion people are freelancing as of 2025, representing 46.7% of the global workforce.

However, there's a common problem you face in your freelancing business: poor financial management.

You may struggle to manage your finances if you lack formal business training, especially since freelancing often starts as a side hustle aimed at making extra income rather than running a full-fledged business.

As a freelancer, you’re more than just a service provider; you’re a solopreneur. You set your rates, manage clients, send invoices, pay taxes, and track profits all on your own. And if you're not prepared to handle that responsibility, you may skip many essential managerial steps.

Fortunately, there are tools to make work easier for you. Fintech SaaS companies have provided tools that can save you time and money.

We will explore 6 key financial mistakes that are hurting your freelance business and how these tools can help to fix them.

1. Undercharging for your services

During the early freelancing stage, you are likely to undercharge due to a lack of confidence. Sometimes, it's the fear that clients may not pay if you charge your worth, or not even knowing your worth at all. You set your rates based on what “feels” right or what you think clients will agree to pay, rather than the value you provide or what the market supports.

Another mistake is failing to adjust rates as you grow and gain more experience. When you keep charging the same amount over the years despite the shifts in the economy, you limit your income potential, which leads to overworking and having nothing to show for it.

Fintech SaaS tools for setting rates

There are several fintech tools available to aid you in managing your freelance business. Here are two trusted tools to help you estimate and set your rates accordingly:

Bonsai pricing tool is an all-in-one platform offering contract creation, invoicing, time tracking, and intelligent pricing suggestions based on project scope. It is designed to help you estimate true costs and analyze competitive rates based on industry data. 

Plutio is a tool that performs task tracking, invoicing, proposals, and time tracking. It helps to understand how much time and money go into each job and determine if your pricing reflects your effort.

2. Poor Planning or Budgeting

Are you guilty of taking jobs as they come and hoping for the best, without a proper financial plan or income target?

Cash flow in freelancing is often inconsistent; one month may be abundant, and the other will be dry. Without adequate budgeting or planning, you will work tirelessly and still not be able to cover bills, keep up with your goals or even save for lean months. This results in financial regression, and you may even quit working, out of frustration.

Budgeting tools for freelancers

Here are two trusted freelance budgeting tools to help you control and manage your spending:

YNAB (You Need A Budget) uses zero-based budgeting to allocate every dollar. It helps to allocate income as it comes in, even if it’s irregular. YNAB offers goal tracking (like tax savings or business investments), alerts users when they’re overspending, and encourages adjusting in real-time. YNAB is great for setting monthly goals and building buffers. You can use YNAB to take full control of your cash flow and plan. 

Found features 

Zoho invoice dashboard 

5. Ignoring Taxes

When freelancing, you are responsible for your taxes, including self-employment taxes.  Failing to prepare for taxes ahead of time often leads to late fees, penalties, or even borrowing to cover tax debts. 

Without a system for setting aside a percentage of income for taxes (usually 20-30%) or proper tracking of deductible expenses, you risk facing large, unexpected bills you’re not prepared for, and may end up overpaying taxes unnecessarily. This makes it hard to reinvest or build financial security.

Fintech tools for tracking taxes

These tools are trusted to help you avoid piling taxes:

Keeper Tax works like a personal assistant employed to handle every tax-related problem. It tracks every spending and automatically scans bank and credit card transactions to find deductible expenses, helping the user to lower taxable income without manual effort. It calculates quarterly tax estimates, reminds when taxes are due, and helps to file fast.

Catch automatically withholds money for taxes, retirement, insurance, and health savings. Once Catch is attached to the user’s payment streams, it automatically sets aside a percentage of every payment for taxes, preventing unpaid taxes from piling up.

QuickBooks Self-Employed is designed to automatically track income, expenses, and estimated taxes with quarterly updates and set reminders for payment. It also generates ready-to-file tax reports, making both state and federal tax filing easier and more accurate. 

6. No Financial Reports or Forecasting

When you don’t look beyond your current workload, keep track of your financial progress, you will get stuck and disorganized.

If you don't forecast regularly, you won't be sure of the profits you make, what months are slow, and how much to save. Forecasting is a way to tighten your strategy so as not to be caught off guard when things get tough. Lack of financial reporting can result in missed income, unplanned expenses, and difficulty in growing strategically.

Fintech SaaS tools for finance forecasting

Financial forecasting tools are a necessity to have. Check out and use either one of these tools:

Float connects directly to an existing accounting software (like QuickBooks) and helps to visualize cash flow in real time. It pulls invoices, bills, and bank balances to show how much money you will make in the future. It auto-syncs with the connected accounting software and needs no manual entry. 

Brixx creates a long-term business model with scenario planning. It can help you simulate your business growth over months or years, for better decisions. It is a great option if you’re thinking ahead about scaling and diversifying, and it encourages strategic decisions by showing long-term effects.

Suggestion 

While all these tools are good and recommendable, it is advisable to use just a few. Using different tools for invoicing, tax estimating, budgeting, etc., can be overwhelming. Instead, get tools that perform multiple functions. For example:

QuickBooks Self-Employed can be used for bookkeeping, invoicing, mileage tracking, expense categorization, and tax prep.

Found provides tax estimation, invoicing, income logging, and banking

Lili offers mobile banking, budgeting, tax buckets, automated categorization, and invoicing

Each of these tools performs 3 or more tasks and will help to keep you organized and focused.

Conclusion

Freelancing goes beyond pursuing a passion; it also requires managing a smart, efficient business. Financial mistakes can hinder growth and deplete energy, but with the right tools, you can stay organized, have increased earnings, and reduce stress.

Adopting these smart tools early will elevate your operations, and you can build a financially sustainable business on your terms.