Escrow and freelancing sites like Upwork help freelancers get paid but if you have direct sources of clients, there is a risk of not getting paid.
Even a misunderstanding in billing can make the relationship sour and so how you can avoid such misunderstanding and request payment and get paid.
Consider Every Aspect
If I am working for clients on Upwork, I have stopped applying When I see no prior Upwork experience. I learned this recently when working for a client who did escrow the money but for 3 months he could not find time to review my work and was traveling.
Instead of running after him to release the funds I just refunded back and canceled the project. It was an easier option to cancel the project than taking the pain to release payment from such clients but this gave me a good learning experience to avoid no experience with Upwork clients in Upwork.
Not a legal contract and just understanding of requirements being written down. Here are few things I prefer writing for development projects.
- What is the scope of your work?
- What’s your understanding of the requirements?
- How you handle bugs, and what will be considered as bug fixes?
- How and what will be the timeline?
- What will be the payment terms?
- What will be your availability of time?
- What will be your turn around time when dealing with bug fixes?
Feel free to use them or make your own list of items to docuemnt.
Normally down payment is between 30 to 50% but I ask for upfront payment if project is above certain value.
You can have a tough time when you ask for upfront payment and if clients don’t agree, I prefer an escrow. If they don’t agree on either, I let them know to look for someone else who is fine working without upfront payment and without escrow.
For regular clients, I do not ask for any upfront fees but definitely weekly payments. Use documentation to let them know about the billing in percentage terms or in dollar terms whichever is convenient.
Use An Invoice
A professional looking invoice with each item in detail helps reduce misunderstandings. You can use any of the Microsoft excel’s invoice template and customize as per your needs.
Always send an invoice as soon as it is due and even if they don’t need an invoice because an invoice is a way to remind clients that payment is due.
If the invoice is as unpaid for a week or two, send a reminder and include if any late payment will be levied after a certain date. If there is a late payment make sure you mention the exact date after which a late payment will be applied and what will be the amount.
When sending reminder make sure you re-attach the original invoice.
After an invoice, wait for a couple of weeks before sending a reminder. Once you have sent a reminder, wait for another a week or so and then try an alternate method to contact like on Google hangout, Skype call or even a phone call.
Make sure you don’t start with “you did not pay” even if you are certain client has delayed the payment. Starting with “you did not pay” hurts the ego and confirms you will not be paid either.
Be polite and let the client know that you have sent an invoice in email and they may have either missed the email or it may have landed in the spam folder.
As a freelancer, always opt for your client’s preferred payment and not your preferred method of payment.
My most preferred payment option is TransferWise but my clients prefer PayPal and so it is one of the most used payment method by me.
If you don’t make it easier for your clients to pay you, you can have a tough time getting paid.
Know your risk
I have set a risk limit for new clients at $500 which means if a client has a payment due of more than $500, I stop working till the payment is cleared.
If a client is an old one, I increase the limit to $1000 and then to $2000. Haven’t set any client’s limit to more than $2000 and if a client has more work, I move to weekly payments.
If there is a payment due of more than the limit I am comfortable with the client, I stop working or let my contractors stop working for clients and only continue working once payment is cleared.