Freelancers - Get Your Money
Great! Wow! Hooray! You just finished your first project ever! Hey, when are you
getting the dough you were promised?
Getting paid is the single most important aspect of being a freelancer, so make sure
that you take your time and do things right. If you don't, you might land up getting
screwed in the end. Just because you have completed a huge profile job and you are
looking to receive big dough in return, doesn't mean that the client is going to pay
on time or even pay at all. There are many strategies to deal with delinquent clients,
but there are also many precautionary measures that you should take when initiating
a relationship with your client.
1. Check Credit Reports
If you are taking on a substantial project that is going to occupy a big chunk of your
schedule, you should spend the money on a credit report. The most reliable website to find
this sort of information is Experian. Their reports include credit status, legal filings,
collection agency filings, payment behaviors and trends, and company background information.
Experian - Searching the database is free. When comprehensive information is available,
Experian will provide a full Snapshot report, including a credit risk category, for
$14.95. When little information is available, a limited report without the risk category
costs $5. Of course, if Experian has no information about a business there is no charge.
2. Contact / Legal Agreement
A legal agreement is the most important step in the whole process of getting paid. Make
sure on your contract to specify the time schedule, price for your service, and terms
that were agreed upon mutually between you and the client. I was screwed out of getting
paid on my first freelance gig because I didn't insist on a contract. If for some reason
a client won't sign the contract, then they aren't a trustworthy company to work for.
So learn from my mistakes and find a contract to use in your freelance business. MAKE
SURE THE CLIENT SIGNS AND SENDS TO YOU A COPY!
• Get Ideas for Your Client Contracts from a Contract Swipe -
This swipe file is filled with example contracts that you can use. My suggestion is to
take a little from one and add to another until you have a perfect contract. These contracts
are meant for web developers but can be used for any profession with a little change on
your part. Remember, it is always a good idea to have a lawyer look over your contract.
3. Down Payment / Retainer
I always have clients pay $100 - $200 up front to show they are good for the money.
Also, this enables me to have at least some money in case they back out of the contract
early. Don't forget to take the retainer amount out of the last invoice amount. I know
that one of my associates ask for a 20% retainer to help pay for the upfront costs that
he pays to printers and other vendors. This is a wise system to follow for you if you
also have many out-of-pocket purchases.
Make sure to use net 30 on your contracts. What this means is that your client has 30
days to pay up the money that they owe you. Since many companies routinely pay 30-90
days late on all invoices, I would never make your terms net 60 or net 90. You might
also want to consider implementing a late fee, but I would suggest instead raising your
fee a little bit and then offering a 5% discount if your client pays on time.
5. Scheduled Payments
It is easier for a client to remember to pay if you have a schedule for his payments.
Also, if you break up the payments into smaller invoices, you can always refuse to
continue if you aren't receiving the money that you are owed. Most clients won't risk
falling behind schedule and they will pay up. Think of it this way. your clients won't
have very much to lose if you ask for all of your money at the completion of the
project, because they already received the completed work.