It’s no secret—getting paid is important. Here’s how to figure out payment terms and how to get paid.
Freelancers (in any discipline) have several important processes to develop before jumping into client work.
At the top of the list is deciding how you’re going to charge for your work and insure you actually get compensated for it.
Here are a few considerations to evaluate as you select what works best for you and your services:
Hourly Pay vs. Project Pay
First and foremost, build out these two charging options.
You should have rates for both of them and classifications for what necessitates an hourly pay endeavor versus a flat project rate. Every client you’re going to come across has different needs, and you’re going to need to be able to provide the best and most-rationalized quote possible.
Suggested Uses for Hourly Pay:
- Any project with an unknown amount of hours involved
- Otherwise you run the risk of putting in far more work than you’re getting compensated for
- Any project that will require you to appear in-person for extended periods of time
- Your time is valuable–be sure to get compensated for it
- Common for media training and other business coaching sessions
- Edits or modifications occurring after the project’s end date
- Common for designers and developers
- Pro tip: Use a formal app to track your time. It will help your clients and your personal process. I recommend using the free, in-browser app Tracking Time.
Suggested Uses for Project Pay:
- Streamlined project types that have a set, proven and limited amount of hours automatically built in
- Example: A logo design with two rounds of edits. A good designer knows how much time this will cost and how much time two rounds of edits will take.
- Any project thats value far exceeds your hourly rate and the amount of hours you put in
- Common for products that have are reusable for quite some time (design pieces, branding, copywriting, templates, systems, websites)
- A package of services
- Pro tip: Consider using “retainers,” or monthly flat rates, for ongoing services that you can strategically anticipate the allotted time of. Retainers guarantee you a certain amount of payment for a certain set of activities and give your client a digestible way for paying you.
When You Get Paid
There are several common time frames that freelancers get paid in:
- Half up front; half upon completion
- All up front
- All at the end
- Monthly (retainers)
Getting paid according to a schedule is obviously extremely vital. So often, however, freelancers are screwed out of money for services that they can’t take back because they simply don’t set up a specified payment rate. An anticipated payment timeline will keep you and your clients on the same page throughout your relationship.
Also build in late fees for overdue payments. The standard is charging a set rate for every 15 days of late payment. Don’t feel bad about it either–you have costs (living, overhead, time) you have to take care of just as much as they do.
- Pro tip: If you’re working on a monthly retainer basis and the client is 21 days late in paying, I highly recommend halting your services until payment is received.
- The longer time goes on, and the more your owed, the harder it’s going to be to recover your deserved pay.
How You Get Paid
- Direct deposit
Decide on one from the outset. What works best for both you and your clients?
- Pro tip: For clients located far away, I suggest setting up a way to receive direct deposits. Checks can easily get lost in the mail, and once that happens, recovery is going to be difficult.
Also, it’s a professional standard for you to supply an invoice for your services. It helps your clients with accounting. Luckily there are countless free invoicing softwares available. My personal favorite is an in-browser app called Wave.
Making Sure You Get Paid
One thing will help make sure you actually get paid: contracts. I’ll say it again: contracts.
Anyone who offers services without a formally signed agreement is just asking to be taken advantage of. Put everything we just discussed in writing and have your clients sign on the dotted lines. It will keep them accountable and give you a resource to point back to if discrepancies emerge.
There are tons of templates online you can adopt, but be sure to at least include the following:
- What the work is, specifically
- The more specific the better
- When the work ends
- Especially relevant for retainers—pick an end date (ex: Sept. 24 at 12 a.m.)
- Who owns the copyrights to that work
- What the payment is for that work, when it’s delivered and how its delivered
- What happens if payments are late. You should enforce a compounding late fee of three percent. Bad behavior should not go without negative reinforcement.
- What happens if legal action is taken (who pays for attorney fees, which is usually each party separately)
- Pro tip: I highly suggest using Adobe EchoSign to gather signatures. Not only can you conveniently do it online, but you have an extra layer of protection and credibility if your client would ever deviate from the contract.
Here’s to getting paid,