The Consistent Freelancer - 20 Metrics You Need To Track

As a freelancer, you’re your own boss. That means you have the freedom to decide how your time is spent and how much you earn. It also means that there are some things you need to keep track of (and learn) if you want to succeed long-term.

If you’re feeling unsure about where to start tracking, don’t worry! We’ve got 20 metrics any freelancer should monitor below:

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Takeaways
1. Tracking metrics is crucial for freelancers’ consistent growth and success.
2. Implementing key performance indicators (KPIs) helps measure progress and identify areas for improvement.
3. Financial metrics like revenue, profit margin, and billable hours provide insights into freelancers’ financial health.
4. Client satisfaction metrics, such as client feedback and retention rate, reflect the quality of services provided.
5. Time management metrics help freelancers optimize productivity and prioritize tasks effectively.
6. Marketing metrics, including lead generation and conversion rates, gauge the effectiveness of marketing efforts.
7. Tracking industry-specific metrics allows freelancers to benchmark their performance against peers.
8. Monitoring metrics related to skill development and certifications ensures professional growth and competence.
9. Evaluating project metrics, such as project scope, deadlines, and deliverables, aids in successful project management.
10. Collaboration metrics, like client referrals and team feedback, foster strong relationships and partnerships.
11. Technology adoption metrics assess the utilization of tools and platforms to enhance efficiency and effectiveness.
12. Monitoring self-care metrics promotes freelancers’ overall well-being and work-life balance.
13. Tracking metrics regularly enables freelancers to make data-driven decisions and adjust their strategies.
14. Leveraging technology and automation simplifies the tracking and analysis of freelancers’ metrics.
15. Regularly reviewing and updating the metrics tracked ensures relevance and alignment with freelancers’ goals.
16. Incorporating a growth mindset and continuous learning allows freelancers to adapt and improve their metrics over time.
17. Tracking metrics helps freelancers demonstrate their value and achievements to clients and potential employers.
18. Monitoring metrics creates accountability and helps freelancers stay on track with their professional goals.
19. Seeking guidance and mentorship from experienced freelancers can provide valuable insights into effective metric tracking.
20. Implementing metrics tracking systems and tools streamlines the process and enhances freelancers’ efficiency.

Table of Contents

1. Revenue

You should be tracking your revenue as a freelancer. If you are not, you’re missing out on some key metrics that will help you improve your business.

Revenue is an essential metric because it tells the story of how well your business is performing and if there are growth opportunities. It also helps determine how much to charge for projects so that you can adequately cover all of the costs associated with running a business (like taxes and marketing).

It’s important to make sure that you’re charging enough for each project to make a profit and possibly even turn a small profit at times! However, it’s also important not to overcharge yourself because then your clients will think twice about hiring someone who charges too much money for his or her services.

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2. Client Acquisition Cost

With CAC, you’re able to determine a client’s ROI. You can also use it as a benchmark for the effectiveness of your sales strategy, marketing efforts, and customer acquisition tactics.

In addition to tracking overall CAC across all channels (e.g., organic search vs paid ads), you should also track it by channel and lead source (inbound vs outbound).

This will help you identify which channels are delivering high-quality leads and which ones aren’t worth spending as much time on in the future.

In addition, tracking costs per acquisition by service or product will help ensure that you’re profitable from day one with each new client prospect that comes through your door no matter how large or small their business is!

3. Gross Margin

Gross margin is the difference between revenue and cost of goods sold (COGS). It’s important to track gross margin because it’s a measure of how much money is left after paying for your actual costs. If you have a high gross profit, you can use that extra cash to invest in marketing, hire new employees or pay yourself more money.

Gross profit is calculated by subtracting the cost of goods sold from revenue. The gross profit percentage tells you how much of each dollar spent was retained by your business as gross profit (or “profit”).

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4. Net Profit Margin

Net profit margin is the ratio of net profit to net revenue. It’s essentially a measure of how much money your business is earning on every dollar it earns in sales.

To calculate net profit margin, simply divide your annual net profits by your annual revenue:

Net Profit Margin = Net Profits / Annual Revenue

You can find these metrics on your income statement (the one that shows an overview of all your financial information). This page will also have another metric called “gross margin,” which represents the percentage of total sales that cover variable costs.

5. Operating Expenses

Operating expenses are the costs of running your business. They’re made up of various costs that come from doing business, such as sales, administrative expenses, and general and administrative expenses.

Operating expenses can be broken down into fixed or variable costs:

Fixed

These are costs that you pay each month (or quarter) regardless of how much revenue you bring in. Examples include rent, insurance premiums for equipment, and other business-related items.

Variable

These are more related to what happens on a day-to-day basis than anything else. These can also be categorized as controllable or uncontrollable operating expense categories:

Controllable

These include things like employee salaries and office supplies that have some level of flexibility when it comes to pricing changes or spending cuts if more cash is needed right now;

Uncontrollable

This includes fixed monthly payments such as utilities even if they’re not being used by the company (for example, because everyone is working remotely).

6. Cost Of Goods Sold

Cost of goods sold (COGS) is a financial measure that can be used to track the profitability of your business. It’s important to understand how this metric works so that you know how much money you need to make per product to break even.

In simple terms, COGS refers specifically to the cost of the products that are sold by your company not just the materials but also labor directly related to creating them.

For example, if your company makes custom wooden tables and chairs, then COGS includes both wood purchased for construction as well as any other materials needed for assembly (e.g., screws).

However, COGS does not include marketing costs or sales commissions; those expenses fall under revenue instead.

So when calculating COGS and revenue metrics together, remember: revenue = selling price – COGS

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7. Account Receivables

There are a few ways to collect your receivables. You can simply ask clients to pay you on time, and you can even charge a late fee if they don’t. The more proactive method is to hire an agency that specializes in recouping money from delinquent debtors.

This will cost you some percentage of what they recover, but it’s worth it if you’re owed thousands or tens of thousands of dollars in unpaid invoices.

The longer you wait before collecting what’s owed to you, the more money will be lost due to fees and interest (which accrue at the same rate as credit card interest).

8. Account Payables

Account payables are a metric that shows how much you owe and to whom. It is important to track this metric because it shows your financial health. This metric can be tracked in several ways:

Account Payable Aging Report – An account payable aging report will show all outstanding invoices (those not yet paid). You can use the report to assess your current debt and plan for future payments.

If you find that you have too many past-due invoices, then perhaps it is time for you to look into hiring an accounts receivable manager or collections agency who can help with collections activities such as phone calls, letters, etc.

But if none of these options work for your business model, then maybe it’s time to consider switching from cash on delivery mode of payment where customers pay only after receiving their order; instead, try invoice discounting where the customer pays upfront before receiving his/her order without having any physical possession over anything at all!

Credit Card Statement – Another way of tracking account payables is by using credit card statements sent by banks every month stating how much money has been spent across various categories like groceries/foods/household items etc.

9. Accounts Payable Turnover Ratio (Working Capital)

To calculate your accounts payable turnover ratio, you need to know some things about your business. The first thing you’ll need is the total amount of money your company owes and the total amount it has spent on bills.

Next, you’ll need to know how long it takes you to pay off those bills. For example, if you owe $10,000 and spend $5,000 per month on bills (including payroll), then it would take six months for those two numbers the money owed and the amount spent to equalize each other.

If we assume that there are 52 weeks in a year, that means that we only owe approximately $500 per week ($10,000/$500 = 20 weeks). If our payment terms are 30 days after the invoice date (which is standard), then this means that we pay off half of our accounts payable each month ($5,000 / 30 days = 166%).

So if our average accounts payable turnover ratio is 166%, then every three months we wipe clean another half of our outstanding balance!

10. Networking Capital (Nwc) To Current Liabilities Ratio

The networking capital (NWC) to current liabilities ratio is also known as the “quick ratio” or “acid-test ratio.” This is one of the most important metrics that you need to track to get a complete picture of your business performance.

The NWC is calculated by taking the total current assets and subtracting all current liabilities from it. Current assets are all those assets that can be turned into cash within 12 months, such as cash, accounts receivable, and inventory.

Current liabilities are due within one year and include accounts payable, accrued expenses, and wages payable.

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11. Days Sales Outstanding (Dso) (Accounts Receivable Turnover Ratio)

Days sales outstanding (DSO) is a good indicator of the health of your business. It’s also known as the accounts receivable turnover ratio, and it measures how long it takes you to convert receivables into cash.

In other words, DSO tells you how many days it takes for your clients to pay you. The higher this number is, the longer it will take for you to convert your accounts receivables into cash. Why does this matter?

If your DSO is too high, that means that some customers are taking longer than usual before paying their bills which may indicate one of several things:

They’re having financial difficulties themselves;

They’re dissatisfied with the service they’ve received; or

You’ve been sending invoices that aren’t up-to-date or accurate enough for them to pay easily (or at all).

12. Cash Conversion Cycle (CCC) (DSO + DIO – DPO)

The cash conversion cycle (CCC) is the time it takes to convert cash into cash. It’s the amount of time that elapses between when you get paid and when you pay your bills. The formula for CCC is:

DSO + DIO – DPO = CCC

13. Cash Flow From Operations (Operating Cash Flow Margin)

This metric measures a company’s ability to generate cash from its operations. It’s also a measure of how well the company can meet its financial obligations. The operating cash flow margin is calculated by dividing a company’s operating cash flow by its revenue and then multiplying this number by 100:

Operating Cash Flow / Revenue * 100 = Operating Cash Flow Margin

14. Pay Attention To The Numbers

Numbers are important. They can help you make decisions and better understand your business. It’s a good idea to track the numbers that matter to your business, no matter what they are.

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Conclusion

Now that you know the numbers to track, what’s next? Well, take a look at these numbers every day or week. I would suggest you set aside just an hour or two each week to compile all these metrics and then review them.

You don’t have to do this in one sitting. You can just check one metric every day when you have time and then on Friday, sit down and review everything together. It should only take an hour or so and will give you valuable insight into what works for your business and what doesn’t.

Frequently Asked Questions

What Is The Consistent Freelancer?

The Consistent Freelancer is a set of tools and resources designed to help you track the most important metrics for your freelancing business. It’s designed to help you keep track of what matters, so you can make better decisions, be more productive, and grow your business faster.

What Kind Of Metrics Should I Be Tracking?

Tracking your time and money spent on projects is one thing and it’s certainly important! But there are other things to keep an eye on as well. For example, we recommend tracking your customer satisfaction ratings (CSAT) and customer retention rates (CR).

You might also want to keep track of how much time goes into each project so that you don’t overcommit yourself or undercharge for services rendered.

How Do I Get Started With The Consistent Freelancer?

First off, sign up for a free trial on our site! Then head over here for some helpful tips on how best to use our products once they’ve arrived in your inbox. We also recommend checking out some of our blog posts about freelancing, like “The One Minute Guide To Starting A Business Online” or “

I’m A Freelance Artist. How Can I Track My Career With The Consistent Freelancer?

You can use the Consistent Freelancer to track your career by setting up your own goals and creating a budget that matches your income goals.

Then, you’ll be able to track how much money you make on each project, which will give you a better idea of what your rates should be for future projects.

What If I Don’t Have Any Projects?

The Consistent Freelancer isn’t just for freelancers with existing clients it’s also designed to help people who are just starting to find clients and get paid. When you sign up, we’ll send you pre-written pitches that you can send out to potential clients to secure new business.

How Do I Know If The Consistent Freelancer Is Right For Me?

We suggest using the Consistent Freelancer if you work as a freelancer or independent contractor and need help finding new clients or managing work-related expenses like travel costs or equipment purchases.

Costantine Edward

Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.

The Consistent Freelancer – 20 Metrics You Need To Track