Freelancing Isn’t Free: Make Sure You Get Paid
Landing a new client is one of the most rewarding feelings when you’re self-employed. The only thing you want to do is get to work - after all, the sooner you finish the project, the sooner you get paid. Before you do so though, it’s important to make sure that you and your client are on the same page in terms of how and when you’ll receive payment for your work. It might not seem like a big deal, but non-payment from clients is more common than you may think.
According to a study done by the Freelancers Union, on average freelancers lost 13% of their annual income because of nonpayment from clients in 2014. As our friends at the Freelancers Union like to say: “Freelancing isn’t free.” We fully agree. If you follow the hashtag #freelancingisntfree, you can read some horror stories about people who got stiffed by their clients, which totally sucks and would be wise to avoid. We asked a few of our hardcore freelance friends about how to make sure you get paid and put together this list with their responses!
1. Do your homework. Before you make any agreements with a client, do a quick google search to see what other freelancers have to say about working with the company. If you’re working with a more established client, checking the Better Business Bureau can be a great way to make sure that they don’t have a bad track record.
2. Get some cash up front. This is actually fairly common, especially when working with a new client. Getting 25%-30% can be a great way to establish a trusting relationship, get the client to put some skin in the game (it’s harder to bail on a project if you’ve already paid something to get it done), and set the precedent that you won’t do work if you’re not getting paid.
3. Get it in writing. Having a contract that is clear and concise is crucial to making sure you and your client are on the same page. This also gives you a chance to set the expectation for payment terms and late fees if clients decide to skip a payment or draw out that final bill when the work is done. Bonsai is the perfect tool to help freelancers spin up bulletproof contracts in a matter of minutes and while having a contract doesn’t guarantee payment, clients will feel more obligated to pay when the terms are in writing.
4. Use discounting to your advantage. Incentivize your clients to pay you on a weekly basis by offering discounts. Instead of thinking about penalizing your client for late payment, consider giving them perks (10% off for instance) for paying as soon as a project is done instead of waiting a full 15 or 30 days to send your cash.
5. Set up a payment schedule. Getting paid once a week is great. Period. This gets your client invested in the project and greatly reduces the chances of not getting paid. Not to mention, you’ll find it a lot easier to do quality work when you have a steady influx of income.
6. Use invoicing tools to your advantage. Finding a good invoicing tool can be helpful in couple of ways. For one, having nice clean invoices to send to your clients helps create a sense of professionalism, which can go a long way when it comes making your clients feel good about the work and ultimately collecting payments. This is also an easy way to offer flexible payment methods to your clients. Some of these tools even help you track your hours and aggregate them on the invoice so your client knows exactly what they’re paying you for. Tools like Quickooks Invoicing and Freshbooks makes it easy to get paid via credit card, bank transfer (ACH), and peer-to-peer services like PayPal and Bitcoin through secure transactions. They also make linking your personal Stripe or PayPal account super easy, which makes accessing your money quick and painless.
Staying on top of your billables is crucial when you’re self-employed and it’s important that you have a solid foundation for how you interact with your clients when it comes to receiving payments. It can seem like a convoluted, time consuming process at first, but taking advantage of some of the tools out there can automate the entire process of creating contracts, sending invoices, and receiving payments. All in all, this gives you more time to focus on delivering top quality work that your clients are happy to pay for.