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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 - provider.com/contracts.htm 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.

4. Terms

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.

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