How Can Freelancers Guarantee Their Payment?
One of the most stressful things about being self-employed is managing your cash flow. This is especially difficult when clients don’t pay you on time. What can you do to make sure your invoices are handled promptly?
Although it’s common, I still have no clue why it happens. Customers expect their work to be done as early as possible. However, when it comes to paying for their work, they’ll take their sweet time. This, like most problems in customer relations, can be mitigated. This article discusses How Freelancers Can Guarantee Their Payment.
This, in my opinion, can be considered a kind of social contract, one that holds us together. After all, not many people have been charged with legal violations, but most people are aware of how we feel when we break a promise to someone.
I will offer you some tactics that will help you guarantee your payment. But keep in mind that even these tactics won’t succeed in stopping non-payment 100%. You will probably encounter issues with your payment one day, and that’ll make you feel very bad. But don’t forget that this is business and when this happens one day, try to take lessons from the experience and determine precautions to prevent it from happening again.
Ask for an upfront deposit
An upfront deposit is an indicator of respect for your time and commitment. Businesses rarely ask their customers to make advance payments for their services but I think it’s sensible and necessary. 25–50% of the fee as an upfront deposit is usually enough to discard frauds. If your customer isn’t able to make an advance payment, they probably don’t have money to pay you at all. I have been told lots of excuses by customers as to why they can’t pay a deposit but this is not open to discussion for me.
Freelancer friendly terms
Demand payment in 7 days from the service delivery. Why would your customer delay payment once you have delivered the service? Why would you care for a company policy that stipulates payment after 90 days? This is not acceptable and to be honest, it smells like a fraud.
It is very important that you sign a standard supplier contract with your customer. Besides this, I add a clause to the contract to clarify interest on late payments. In this way, I prevent the customer from dragging their feet.
In the case of non-payment, courts are not your only option, you can also apply to debt collectors. The important thing is that you shouldn’t feel too worried about something that is beyond your control — this will cause you unnecessary stress. Just think that this is possible and get ready for it in advance.
Milestones
Rather than asking for full payment at the end of the project, set payment milestones not exceeding one month. Doing so will ensure that you pay your bills. Worrying about when you are going to get paid for a project is the worst thing that ruins the project. The focus provided by the payment milestones will benefit both you and your customer.
I also believe that payment milestones should be defined independently of project milestones. Sometimes your project may have to be delayed or may require more effort due to external factors. When such a thing happens, you need protection to be paid to help you successfully overcome these issues.
With the benefit of hindsight, you may grow an instinct for the sort of person who will fail to do what they are supposed to. When a customer gives you this feeling, don’t hesitate to trust your instinct. I hope this article will help you. Please leave a comment below.
