Working as a freelancer is a stressful career, particularly when it comes to getting paid.
How and when do you ask your clients for payment? Should you ask for payment upfront? And, if so, how much? The full amount, half, or a percentage?
Our team has seen freelancers ask for upfront payment because they’re afraid they won’t get paid. They think, “Even if I get only a percentage of what I’m owed, at least it will be something.”
Our team has decades of freelance experience and we’ve had clients who were slow to pay and, on one rare occasion, a client who never paid at all. Luckily, this is a very rare occurrence!
Here are some things to consider when establishing payment schedules for your clients.
Invoicing at the End of the Project
I prefer my clients pay me after the project has been delivered and they’re 100% satisfied. It shows confidence in the fact that you’re sure your client will be thrilled with what you deliver. It also reinforces you as a seasoned professional.
For novice freelancers, it’s better to charge only after the project is delivered since they’re more “untested.” It’s a risk for a client to hire them for the first time. Asking for payment once the project has been delivered and the client is satisfied is an excellent way to take that risk off a client. Asking them to hire a newer freelancer and to pay upfront for the services may be too much risk for many clients to take.
Just like you’re concerned about a client not paying you, clients may worry that you’re not going to deliver your project!
If you’ve worked with a client before and didn’t charge upfront, then keep invoicing upon delivery of work. If you suddenly decide to start charging upfront then that may leave your clients wondering what happened to the trust built in your relationship. This trust is critical to your long-term working relationship.
Charging Clients Upfront
If you’re going to charge clients for any work upfront, consider what makes sense for the project. Say, for instance, the project will take two months of work, then consider a 50% deposit with the other 50% due upon the project’s completion.
If your gut is telling you to charge the entire payment upfront, go for it! However, from a client’s perspective, I more readily will hire someone if I pay only once I get the promised deliverables—and I’m satisfied with them.
Consider what is the best win-win situation for you and your client, especially if you don’t want to walk away from the project. This involves a bit of negotiation, which you will find (if you haven’t already!) is a huge part of your work as a freelancer.
If you have ongoing work with a client who you asked for an upfront payment, you may want to consider asking for payment upon completion for the next job. At that time, you’ve built some rapport with the client and invoicing upon delivery may be something you’re much more comfortable with.
Charging Clients Using Retainers or Deposits
Sometimes it may be worth considering charging a client who is new to you or a client that is a startup and may not have a lot of expendable cash a retainer or deposit. This could be a one-time thing as you establish a long-term working relationship.
Just be sure to set the payment at a reasonable amount. You don’t want your final invoicing to have you owing the client (too much) money!
Don’t Expect a One-Size-Fits-All Solution
Successfully running a freelance business depends on knowing when to enforce some policies and when you can be more flexible.
For example, if you’re working with a major corporation, they will already have a system for billing (and they’re good for the money! See “retainers” section above). Other clients may not have an established system set up for billing or a payment department. And you may not have as much trust that they’re good for the payment. That doesn’t mean they won’t be a great client!
You can charge some clients upfront for work and invoice others only after you’ve completed the project. However, you need a system for tracking invoices. If you have that, it’s easy to know where each clients stands. This will also help you determine how you want to invoice them when the next project comes along.
Do you charge a client upfront? Do you request a deposit? Have you ever had a client not pay? Let us know in the comments below!