Getting Paid as a Freelancer
October 18, 2019 9:33 AM Subscribe
What can I do to get paid as freelancer in a more timely fashion?
I work as a freelancer providing a digital audio service. Don't wanna go into too much detail as to the exact service but essentially I'm providing clients with audio files. Like any other freelancer getting paid for my work is often a challenge. I'm looking for suggestions as far as tools that I can use to help get paid in a more timely fashion. I know asking for payment upfront is one option. I do occasionally do that but I find it really sets a bad tone for the working relationship. And to be honest I don't blame the clients...I don't like paying for a product/service upfront either.
Paypal is my first choice of payment because it avoids the whole waiting for the check in the mail thing. But I've found recently a lot of companies aren't willing to pay via PayPal or they say their accounting can't do it. Seems a bit fishy to me. Is there a type of company they I can work with to help secure payments more consistently? What about an online tool that is designed to help? Any suggestions here are greatly appreciated!
I work as a freelancer providing a digital audio service. Don't wanna go into too much detail as to the exact service but essentially I'm providing clients with audio files. Like any other freelancer getting paid for my work is often a challenge. I'm looking for suggestions as far as tools that I can use to help get paid in a more timely fashion. I know asking for payment upfront is one option. I do occasionally do that but I find it really sets a bad tone for the working relationship. And to be honest I don't blame the clients...I don't like paying for a product/service upfront either.
Paypal is my first choice of payment because it avoids the whole waiting for the check in the mail thing. But I've found recently a lot of companies aren't willing to pay via PayPal or they say their accounting can't do it. Seems a bit fishy to me. Is there a type of company they I can work with to help secure payments more consistently? What about an online tool that is designed to help? Any suggestions here are greatly appreciated!
1. I would not rely on Paypal to get paid. The company can arbitrarily put a hold on your money, and unfreezing that can be extremely difficult. Also, might just be me, but I feel like using Paypal conveys the impression that you're more of a hobbyist. Also, of course, Paypal takes a significant cut.
2. You can consider offering a discount for early payment. I've never done this myself, but it's fairly common to set terms as "10 net 30."
3. Refuse to take additional work from a client until all past-due bills are settled. Obviously this only works if a significant share of your business is repeat business.
posted by adamrice at 9:43 AM on October 18, 2019 [4 favorites]
2. You can consider offering a discount for early payment. I've never done this myself, but it's fairly common to set terms as "10 net 30."
3. Refuse to take additional work from a client until all past-due bills are settled. Obviously this only works if a significant share of your business is repeat business.
posted by adamrice at 9:43 AM on October 18, 2019 [4 favorites]
Get signed estimates with clear terms and conditions regarding payment schedules (and cancellation fees!) probably on a net30 basis. Include late fees that are the maximum allowable by law in your area. Make those same terms and conditions appear on your invoices, too. Follow up with clients when they are late (or approaching late, saying "Hey, your payment deadline is next week") and enforce your late fees.
It won't work with every client, but it will work with many. This is what I've done for about 15 years as a freelance photographer.
posted by msbrauer at 9:44 AM on October 18, 2019 [4 favorites]
It won't work with every client, but it will work with many. This is what I've done for about 15 years as a freelance photographer.
posted by msbrauer at 9:44 AM on October 18, 2019 [4 favorites]
Oh, one more thing. For larger budget projects, ask for a percentage up front before any work begins. I ask for 25% up front for estimates above $5000. For those sorts of jobs, there's usually a lot of fees I need to pay to my subcontractors (or equipment rental, travel, etc.) before the client will pay, so that really helps.
posted by msbrauer at 9:46 AM on October 18, 2019 [4 favorites]
posted by msbrauer at 9:46 AM on October 18, 2019 [4 favorites]
Paypal is my first choice of payment because it avoids the whole waiting for the check in the mail thing. But I've found recently a lot of companies aren't willing to pay via PayPal or they say their accounting can't do it.
Well, they probably can do it, but it's a major hassle. My company reimburses some people using PayPal and accounting isn't a big fan. If you're dealing with a company of any size they probably have a system that involves entering purchase orders to pay vendors and then processing that through approvals and cutting a check or sending a direct payment. AFAIK there's not a good way to integrate PayPal into that system, which makes PayPal payments an exception, and nobody who processes lots of transactions likes exceptions.
Depending on the size of the jobs / invoices I'd look at doing a partial payment up front and then a final payment once complete.
You can try having payment terms like Net 30 or whatever, but if it's with a company of any size, you're going to get paid on their terms most likely and not yours. If they do net 45 with vendors, you're getting net 45.
posted by jzb at 9:48 AM on October 18, 2019
Well, they probably can do it, but it's a major hassle. My company reimburses some people using PayPal and accounting isn't a big fan. If you're dealing with a company of any size they probably have a system that involves entering purchase orders to pay vendors and then processing that through approvals and cutting a check or sending a direct payment. AFAIK there's not a good way to integrate PayPal into that system, which makes PayPal payments an exception, and nobody who processes lots of transactions likes exceptions.
Depending on the size of the jobs / invoices I'd look at doing a partial payment up front and then a final payment once complete.
You can try having payment terms like Net 30 or whatever, but if it's with a company of any size, you're going to get paid on their terms most likely and not yours. If they do net 45 with vendors, you're getting net 45.
posted by jzb at 9:48 AM on October 18, 2019
If you’re working with businesses, everyone above is right. It’s annoying but you just have to wait for it to get though accounting and keep track when things are TOO late and chase them down (because then there’s usually a problem). I have all of my invoices through Square to keep them organized and would generally prefer to wait for a check to avoid fees, but depending on the size of the job a lot of businesses will be fine paying right away with a credit card.
I honestly prefer to deal with businesses because chasing the money down is a lot less personal; but if you’re dealing with individual clients I would ask for 50% deposits upfront to help mitigate problems, and do away with that only for repeat clients who you know pay in a timely manner.
Other than that it’s all about getting to a place where you just always have checks coming in and/or doing it long enough that you can save enough money to have a buffer. This is really hard; I have a business and a personal freelance career and it took probably 5-6 years to get there with my business and I’m still struggling with that for my “personal” business after doing it for about 3.
posted by jeweled accumulation at 9:59 AM on October 18, 2019
I honestly prefer to deal with businesses because chasing the money down is a lot less personal; but if you’re dealing with individual clients I would ask for 50% deposits upfront to help mitigate problems, and do away with that only for repeat clients who you know pay in a timely manner.
Other than that it’s all about getting to a place where you just always have checks coming in and/or doing it long enough that you can save enough money to have a buffer. This is really hard; I have a business and a personal freelance career and it took probably 5-6 years to get there with my business and I’m still struggling with that for my “personal” business after doing it for about 3.
posted by jeweled accumulation at 9:59 AM on October 18, 2019
Payment up front does set a weird tone, but depending on the size/scope of your projects it may be reasonable to set partial payments at certain milestones, like 50% of the way through the work or after X number of delivered files or whatever makes sense given the particulars of your work.
Otherwise, my experience was that if I wanted to get paid via something other than checks (from universities/companies) or PayPal (from individuals; companies rarely could work with PayPal), I had to set myself up with a credit card provider so I could take credit card payments outside of PayPal. Square seems to be the way folks do this now; my experience predated that by a bit. Ultimately, the fees I had to pay for that were not worth it compared to the portion of my invoices that got paid that way, and I reverted to just Paypal, waiting for checks, and accepting the odd wire transfer from overseas clients (building the fee for that into my billing). But credit-card processing fees might be worth it to you if you're doing enough volume.
posted by Stacey at 10:11 AM on October 18, 2019
Otherwise, my experience was that if I wanted to get paid via something other than checks (from universities/companies) or PayPal (from individuals; companies rarely could work with PayPal), I had to set myself up with a credit card provider so I could take credit card payments outside of PayPal. Square seems to be the way folks do this now; my experience predated that by a bit. Ultimately, the fees I had to pay for that were not worth it compared to the portion of my invoices that got paid that way, and I reverted to just Paypal, waiting for checks, and accepting the odd wire transfer from overseas clients (building the fee for that into my billing). But credit-card processing fees might be worth it to you if you're doing enough volume.
posted by Stacey at 10:11 AM on October 18, 2019
As someone who pays freelancers, the best way to increase the speed at which you get paid is to submit complete, accurate invoices with all the necessary information, following the process that is laid out.
For example, in our company all invoices need to be sent directly to accounting. If you send them to the person who contracted you, it may languish in their inbox for days to weeks to months. When you're contracted, ask who to send the invoice to, and their preferred method (email - get the preferred address, paper copy etc).
Make sure you have ALL of the information on your invoice. So, name and address, but also your tax and/or business registration number (if you collect tax), a clear description of what you did (so NOT freelance work - 5 hours, but Processing of audio files for XYZ project - 5 hours at $X/hr), and the name of the person who contracted you, purchase order number, contract number or any other information that can let accounting track down who hired you.
With regards to payment, when initially discussing the invoice ask if they need direct deposit information. In Ontario at least, we can not do email transfers, and we would absolutely reject a PayPal request. Direct deposit is preferred, but cheque is an option, and if you have wiring information, the company will wire you the funds. You will likely be responsible for the wire fee though, which ranges from $15-30.
Finally, if you don't see payment within 30 days, absolutely be the squeaky wheel. Send emails, make phone calls, copy in accounting and your contact at the company. Sad to say, but if cash flow problems are an issue for the company, the squeakiest wheels often get the cash.
Hope that helps.
posted by valoius at 10:22 AM on October 18, 2019 [6 favorites]
For example, in our company all invoices need to be sent directly to accounting. If you send them to the person who contracted you, it may languish in their inbox for days to weeks to months. When you're contracted, ask who to send the invoice to, and their preferred method (email - get the preferred address, paper copy etc).
Make sure you have ALL of the information on your invoice. So, name and address, but also your tax and/or business registration number (if you collect tax), a clear description of what you did (so NOT freelance work - 5 hours, but Processing of audio files for XYZ project - 5 hours at $X/hr), and the name of the person who contracted you, purchase order number, contract number or any other information that can let accounting track down who hired you.
With regards to payment, when initially discussing the invoice ask if they need direct deposit information. In Ontario at least, we can not do email transfers, and we would absolutely reject a PayPal request. Direct deposit is preferred, but cheque is an option, and if you have wiring information, the company will wire you the funds. You will likely be responsible for the wire fee though, which ranges from $15-30.
Finally, if you don't see payment within 30 days, absolutely be the squeaky wheel. Send emails, make phone calls, copy in accounting and your contact at the company. Sad to say, but if cash flow problems are an issue for the company, the squeakiest wheels often get the cash.
Hope that helps.
posted by valoius at 10:22 AM on October 18, 2019 [6 favorites]
I'd try something like waveapps.com - they actually don't charge for creating invoices, just for payment processing. When I've paid freelancers, I think it's so much easier to get an invoice that's payable online with a credit card and automated reminders. It also involves less awkward back and forth about money.
posted by beyond_pink at 10:50 AM on October 18, 2019
posted by beyond_pink at 10:50 AM on October 18, 2019
Paypal takes a significant cut.
PayPal Business Payments takes $0.50 per transaction, I use it with Harvest to submit invoices. (of course whether it's useful depends on your clients)
posted by RobotVoodooPower at 10:53 AM on October 18, 2019
PayPal Business Payments takes $0.50 per transaction, I use it with Harvest to submit invoices. (of course whether it's useful depends on your clients)
posted by RobotVoodooPower at 10:53 AM on October 18, 2019
We use Freshbooks. It's fantastic...everyone seems to be able to pay however they like. (Also: charge late fees.)
posted by nosila at 11:01 AM on October 18, 2019 [1 favorite]
posted by nosila at 11:01 AM on October 18, 2019 [1 favorite]
Lots of great suggestions. It makes a lot of sense to require a deposit, and I would think that's fairly expected. One thing that I do when I wrap up a project is to present my end product to the users (usually via online video conferencing). There are many ways online to do this depending on your deliverables. I don't hand over the actual deliverable until the invoice is paid in full. I do make exceptions, but new clients and those that have trouble paying on time definitely go through this process. Clients can approve/request revisions and then be satisfied that the job has been completed to their satisfaction before they pay. I have a bit of leverage (for me, it's digital files) to compel payment.
posted by banjonaut at 12:01 PM on October 18, 2019
posted by banjonaut at 12:01 PM on October 18, 2019
I don't hand over the actual deliverable until the invoice is paid in full.
This is the best way to ensure you will be paid in a timely fashion. Since your work product is a deliverable, you would submit an invoice up front with stated terms, and advise the client when the audio files are complete and that you will send them upon confirmation of payment. That puts the impetus in the client's court to pressure accounts payable into releasing your payment on time.
If you plan to relax your terms for repeat clients that you trust, ensure you have a late fee for payment beyond 30 days from invoice submittal— some large corps don't start the clock until they process the invoice, which can itself take a couple weeks. But still do get 50% 'up front' which could still be 30 days out from contract.
posted by a halcyon day at 1:20 PM on October 18, 2019
This is the best way to ensure you will be paid in a timely fashion. Since your work product is a deliverable, you would submit an invoice up front with stated terms, and advise the client when the audio files are complete and that you will send them upon confirmation of payment. That puts the impetus in the client's court to pressure accounts payable into releasing your payment on time.
If you plan to relax your terms for repeat clients that you trust, ensure you have a late fee for payment beyond 30 days from invoice submittal— some large corps don't start the clock until they process the invoice, which can itself take a couple weeks. But still do get 50% 'up front' which could still be 30 days out from contract.
posted by a halcyon day at 1:20 PM on October 18, 2019
As a person who does not create things, and is not a freelancer of any sort, I recently hired some contractors to do some work on my house. I was /surprised/ when there was no upfront cost. I has assumed there would be at least a 10% deposit.
Obviously, I don't know your industry, or your client relationships, but from this buyer's perspective a downpayment wouldn't make things weird at all. It seems like perfectly normal business to me. If the people you're working with who do make it weird are also the people not paying you... then maybe you should feel free to make it weird.
posted by Zudz at 1:20 PM on October 18, 2019 [1 favorite]
Obviously, I don't know your industry, or your client relationships, but from this buyer's perspective a downpayment wouldn't make things weird at all. It seems like perfectly normal business to me. If the people you're working with who do make it weird are also the people not paying you... then maybe you should feel free to make it weird.
posted by Zudz at 1:20 PM on October 18, 2019 [1 favorite]
Require a deposit up front, and a partial payment at a reasonable midpoint when you can produce enough work to prove that you're actually working on it and that it's going the direction they expect.
Read Clients From Hell and learn the warning signs for clients you don't want to deal with.
Have a contract, even if it's a simple one, that adds a fee if you're not paid on time, whether that's 30 days, 45 days, or whatever. Have it mention that copyright isn't transferred to them until you receive final payment - that way, if they take your draft files and run with them, you have recourse for a solid lawsuit, and if you handed over the finals and they didn't pay (maybe the check bounced; maybe you believed "we'll send you the check Friday but we absolutely must have these for the presentation tomorrow"), you still legally own the files.
You may need a system other than Paypal; sorry. Add a couple percentage points to the fees to cover the cost of waiting and administrative overhead. If you like, let them know about that: "Cost is $1000 via Paypal in three payments, $250 at start, $250 more at the halfway point, and $500 before final transfer of results, OR cost is $1200 at Net 30, with the $250 start/midpoint payments still due as normal."
posted by ErisLordFreedom at 2:33 PM on October 18, 2019 [2 favorites]
Read Clients From Hell and learn the warning signs for clients you don't want to deal with.
Have a contract, even if it's a simple one, that adds a fee if you're not paid on time, whether that's 30 days, 45 days, or whatever. Have it mention that copyright isn't transferred to them until you receive final payment - that way, if they take your draft files and run with them, you have recourse for a solid lawsuit, and if you handed over the finals and they didn't pay (maybe the check bounced; maybe you believed "we'll send you the check Friday but we absolutely must have these for the presentation tomorrow"), you still legally own the files.
You may need a system other than Paypal; sorry. Add a couple percentage points to the fees to cover the cost of waiting and administrative overhead. If you like, let them know about that: "Cost is $1000 via Paypal in three payments, $250 at start, $250 more at the halfway point, and $500 before final transfer of results, OR cost is $1200 at Net 30, with the $250 start/midpoint payments still due as normal."
posted by ErisLordFreedom at 2:33 PM on October 18, 2019 [2 favorites]
To begin with, go back and re-read valoius' comment above, because this is essential advice. Putting as much detail as possible on the invoice and following the steps of each customer is critical.
I know asking for payment upfront is one option. I do occasionally do that but I find it really sets a bad tone for the working relationship.
So as someone who also pays a lot of freelancers, I'm here to flip this on its head. Our company's standard contract pays 50% of the cost as soon as the work begins and the rest on delivery and I prefer it that way! I absolutely don't see it as setting a "bad tone".
Why? Because by paying the freelancer up front I have more assurance that they will be giving my job priority and have more incentive to hit deadlines.
Some of this comes from my experiences as a freelancer myself. Unconsciously I gave myself more permission to let things slide when I hadn't received a cent. Exchanging money for the promise of a service makes the project real, now you're on the hook to deliver.
posted by jeremias at 6:59 AM on October 19, 2019 [2 favorites]
I know asking for payment upfront is one option. I do occasionally do that but I find it really sets a bad tone for the working relationship.
So as someone who also pays a lot of freelancers, I'm here to flip this on its head. Our company's standard contract pays 50% of the cost as soon as the work begins and the rest on delivery and I prefer it that way! I absolutely don't see it as setting a "bad tone".
Why? Because by paying the freelancer up front I have more assurance that they will be giving my job priority and have more incentive to hit deadlines.
Some of this comes from my experiences as a freelancer myself. Unconsciously I gave myself more permission to let things slide when I hadn't received a cent. Exchanging money for the promise of a service makes the project real, now you're on the hook to deliver.
posted by jeremias at 6:59 AM on October 19, 2019 [2 favorites]
I used to* require half (sometimes in installments, depending on the project) before any deliverables were provided, *and made sure that the 50% was what I actually needed to make on that job, so that the rest was gravy if it came in, but if I had to write it off it didn’t kill my business.
*I don’t work for myself anymore, otherwise I still would.
posted by okayokayigive at 10:35 AM on October 19, 2019
*I don’t work for myself anymore, otherwise I still would.
posted by okayokayigive at 10:35 AM on October 19, 2019
I know freelancers that have an aggressive IP agreement that only allows temporary use of their work by large corporations. Gigging has gotten so bad that, after the suicide of a mutual colleague, they hired a lawyer to find all the violations of their IP. now it's like they make more money on IP than on gigs.
it's rough out there, take care of yourself, defend what's yours.
posted by eustatic at 5:44 PM on October 19, 2019 [1 favorite]
it's rough out there, take care of yourself, defend what's yours.
posted by eustatic at 5:44 PM on October 19, 2019 [1 favorite]
and I echo jeremias. when i've let professional services contracts, it's standard to pay a chunk up front, and then installments, then a big chunk at the end of the service period upon completion as an incentive.
How is the contractor supposed to eat otherwise?
posted by eustatic at 5:47 PM on October 19, 2019 [1 favorite]
How is the contractor supposed to eat otherwise?
posted by eustatic at 5:47 PM on October 19, 2019 [1 favorite]
eustatic, I’d love to see that agreement! Interested to see how it defines the ‘temporary license’ part in a palatable way for corp clients that often want perpetual use.
posted by a halcyon day at 8:10 PM on October 19, 2019 [1 favorite]
posted by a halcyon day at 8:10 PM on October 19, 2019 [1 favorite]
This thread is closed to new comments.
posted by warriorqueen at 9:37 AM on October 18, 2019