Should I request payments at freelance milestones?

https://news.ycombinator.com/item?id=5876880

by tommaxwell • 13 years ago

1 5 13 years ago

news.ycombinator.com

I'm using Elance (I know, I know) to make some money on the side, and this is my second client. This time the scope of the project is larger, and it's expected that this job will take about 2 weeks to complete. However, in the terms proposed by the client they're asking to pay for the whole project once it's completed. Does this mean I have to send them everything first, or can they just dispute afterwards if the deliverables they get aren't what they asked for?

I don't really feel comfortable sending everything before receiving payment.

ahmad19526• 13 years ago

I would ask them give you 25-50% up front then the remaining after they have accepted the finished work. I don't know the nature of your work but maybe you can give give them 50% half way through the schedule and they give you the pay for that work, then you give them the remainder when it's done and they pay you back.

I definitely wouldn't trust them with all my work/result and then hope they'll get around to pay me.

tommaxwell• 13 years ago

Good suggestion, I may try this. Forgot to mention that I'm doing front-end engineering work as a freelancer. Not confident enough in my Ruby skills yet to offer those services. :)

phasevar• 13 years ago

100% of my income comes from freelancing. I build web apps and APIs in Node.js. I charge an hourly rate and I bill once every 14 days. I only take on projects that are going to be at least two months in duration and I give my clients 14 days to pay after being invoiced.

I don't usually have much spare time, although it's not because of my billing practices.

If you're doing projects that are only going to last a week or two, just get 50% up front and 50% on completion.

gexla• 13 years ago

First off, the project is only two weeks. How many milestones can you fit in two weeks? For some clients, dealing with billing more than a couple times a month can be a pain in the ass. Additionally, you are working on this project as a side gig, so it's probably not a lot of hours. In this case I would be fine with taking the whole payment at the end. Just have the client put the money in escrow. The client could still screw you over, but at least you know it won't be because of a lack of funds.

On the other hand, since this is a side gig you probably aren't on the same feast / famine cash flow cycle that most full time freelancers are on. You can probably afford to be picky. So, if you don't feel comfortable with the client, just look for another project. For a two week project, I would just do half down and half on completion.

I don't bother with giving partial work based on the payment schedule. At any given time my client has access to everything I have done. However, most of my clients are also developers (or have other developers working for them,) so we may be committing code to the same repo.

I have never been screwed by a client in years of freelancing. I have had clients be way late with payments, but they have always been responsive and sincere when asked about getting a payment. If you are getting screwed, then you need to look at your process for selecting clients.

Don't get too caught up with it. These payment schemes are meant for managing cash flow and risk. You probably don't have to worry so much about cash flow, so your main focus would be the risk.

Personally, I'm not concerned about the risk of losing billable time. My concern is the risk of my business going under. If I lose a few days pay, I'm grumpy, but this won't register on my risk radar. Losing out on a payment sucks, but it's a normal part of most businesses. As long as I'm committed to the long term of my business and learning from my mistakes then I can accept the risk of losing billable time. I might hound Joe down the street for that $10 he never paid me back for the rest of my days, but I can accept losing a few days of billable time because my client went bankrupt and can't pay me. So, be flexible and keep your risk management in perspective.

davismwfl• 13 years ago

I know this may not be perfectly on topic, but it is the model we use for consulting. Maybe you can gain some insight: but check out our latest post http://blog.tenorent.com/

Should I request payments at freelance milestones?

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