How to do a client audit as a freelancer
This simple exercise can reveal where your best clients came from and what needs to change.
Every year, I try to take two weeks off at the end of December. I rush to finish all my client work during the first half of the month so I can spend the remainder watching Netflix, enjoying holiday leftovers, and reflecting on my year.
One way I do this is through a client audit. I got the idea when I read The Four-Hour Workweek by Tim Ferriss, and I’ve continued to expand on his ideas as I do my own audit year after year. I tend to do my client audit at the end of the year, but you can do it anytime you feel you need a reset or just want to gain new insights into your business.
Here’s the process I follow:
1. List all your clients and how much they paid you annually
I always start with a simple spreadsheet that looks like this:
The first step is pretty easy — you’re going to list out every client you had that year and how much they paid you. If you use bookkeeping software like QuickBooks, this part should be pretty straightforward.
From there, you’ll figure out what percentage of your annual income each client represents. I always make a note of my top five clients for that year and what percentage of my income they accounted for. This helps me ensure my client roster is diversified enough and that I’m not overly reliant on a small handful of clients.
2. Track where each client came from
Next, you’ll write down how you found each client. This can also be really revealing, showing whether there’s a marketing opportunity you can lean into more. It can also show you if you need to diversify the ways you look for clients.
For example, I used Upwork to find most of my clients in the early days of freelancing. And one year, I realized I found 36% of my clients on Upwork, which felt like a yellow flag to me. I didn’t want to be overly reliant on a third-party platform that could change the rules at any time, so I knew I needed to diversify my outreach.
Once I’ve run all the numbers, I like to take some time to just think about each client and make notes. If they assigned me one article and never talked to me again, I’ll write that down. If I really like writing for a certain client and want to find more clients like them, I’ll write that down. Honestly, I’ll usually come back to this part over several days because new ideas will come while I’m on a walk or doing dishes.
3. Look for patterns
Once you’ve filled out the spreadsheet, the next step is figuring out what the numbers actually mean. Here are the kinds of things I’m looking for during a client audit:
Is one client more than 25%-30% of my income?
Where did my best clients come from? Do they have anything in common?
Which clients were high effort and low-paying?
Where did any recurring work come from?
Which of my marketing efforts paid off the most?
For example, I remember doing this in 2017 or 2018 and realizing that one of my lower-paying clients actually accounted for about 20% of my work for that year. At first, I was kind of baffled, but then I realized it was because they consistently gave me 2-3 articles a week, while most of my other work was one-off jobs.
That taught me that I needed to look for more recurring work with higher rates. That was what eventually led me to focus on personal finance publications, a strategy that worked for me for many years and actually got me to six figures.
I also learned that once a client pays me $5,000 (total, not from a single project), they usually become a long-term client. So now, every time I start working with a new client, my number one priority is to reach that first $5,000.
However, watch out for outdated trends that no longer apply. For example, I did a client audit in 2021 and realized that three of my best clients came from one conference that I attended. I got excited and shortly after, signed up to attend that same conference later that year.
But when I finally went, I was disappointed to realize the experience was completely different, and I walked away with little to show for my efforts. After thinking it over, I realized that I attended the original conference in 2019 — then COVID happened, and everything changed. The point is, what works once won’t necessarily work forever.
4. Implement this information slowly
Okay, once you’re done with the client audit, how do you implement this information? My best recommendation is to slow down and not make any sudden decisions based on what you learned.
I know this may seem counterintuitive, but I find that whenever I want to take immediate action, it’s usually reactionary and not always in my best interest. So instead, I’ll sit with the information for a while and look for patterns. Then I’ll decide what I want to try in the coming year — maybe prioritizing referrals or doubling down on the channels that brought in my best clients.
The point of the audit is to learn more about your business. Over time, the patterns you notice help you make better decisions about marketing, what kinds of clients to pursue, and what needs to change if you want a sustainable business.
You don’t need to overhaul everything overnight. You just need to pay attention to what the numbers are telling you and use that information to make better decisions going forward.