Make Sure You Get Paid As a Freelancer

Freelancing has many benefits, such as a flexible schedule and a variety of work. However, freelancers sometimes struggle to get paid. To protect yourself, you should carefully screen potential clients and weed out those who raise red flags. Remember to use a signed contract with the client and bill promptly.

Steps

Selecting the Right Clients

1. Talk to other freelancers. Before agreeing to work for someone, check around with other freelancers. Ask them if the client is good to work with. Do they pay on time? Are they reasonable in their demands? Do they sue at the drop of a hat?
   • During the interview stage, you might ask who the client has worked with before. Then call those people up.
2. Search online for reviews. Type the person’s name into Google and see what comes up. Another freelancer might have complained about working with this person.
   • If the client is a business, you can check with the Better Business Bureau for the city where they are located. Look for complaints.
   • Realize that anyone can complain anonymously online, so take complaints with a grain of salt. Nevertheless, look for patterns. Have multiple people complained that the client doesn’t pay their bill on time? If so, there’s probably a problem.
3. Study the client’s website. A client with a website that looks like it was created in the 1990s probably doesn’t have a lot of money. Check how long they have been in business. A more established company is probably a safer bet to do business with.
4. Discuss your rates upfront. You shouldn’t hide how much you charge. Instead, discuss your rates early in the interview process. You won’t know what to charge until you understand what the potential client wants, so ask questions about the scope of the project and its deadline.
   • If your rates are inflexible, then put them on a spreadsheet and give it to the potential client to look over. They should know ahead of time whether they can afford you.
5. Look for red flags. There are some tell-tale signs that a prospective client might be someone who flakes out and never pays you. Pay attention to the following:
   • The client doesn’t know what they want. You are courting disaster if you agree to work for this person. Chances are they’ll change what they want midstream, thus doubling your amount of work.
   • The client is disorganized. You might ask for some information before agreeing to work for them. If they never give it to you, or if it is disorganized, then steer clear.
   • The client is rude. You’re essentially a stranger at this point, and someone who is rude to strangers will not make a good client.
   • The client objects to your rates. You should charge what you are worth and be prepared to justify your rate. If the client objects, then don’t work with them.
6. Turn down a client gracefully. When rejecting someone, you don’t want to burn any bridges. It’s possible that the client might become more reputable in the future and be someone you want to work with. Accordingly, do the following:
   • Decline with kindness. Thank someone for thinking of hiring you, but say you are too busy right now or that you don’t think you’re a good fit.
   • Offer alternatives. Recommend the person to a different freelancer, or suggest ways the client can do the job themselves.
   • Refuse to negotiate. A client might try to get you to work for them by haggling. Stay firm and politely decline.

Signing a Contract

1. Find sample contracts. You should use contracts with all clients, which will legally protect you. If the client breaks the contract, then you can sue. Search online to find a sample contract in your industry.
   • You can also hire a lawyer to draft a contract template for you. You can use this contract over and over.
2. Format your contract. Draft your own contract by opening a blank word processing document and setting the font to something legible, such as Times New Roman 12 point. At the top of the page, include the title: “Independent Contractor Agreement.”
   • Identify the parties at the beginning of the contract. For example, you can write, “This Independent Contractor Agreement (‘Agreement’) is made between James Jones (‘Contractor’) and Elizabeth Smith (‘Client’), who agree as follows…”
   • If the client is a business, then include the business name, not the name of the person signing the contract on the business’ behalf.
3. Describe your services in detail. This is the heart of the contract. Describe the scope of the work you will perform so that the client understands what they are paying for. Provide as much detail as necessary, but you don’t have to be too detailed.
   • One option is to include a list of detailed services in an attachment. In the contract itself, you can simply write, “See Attachment A for a full description of services.”
   • Be sure to identify the work that you won’t be doing. For example, if you’ve been hired as a wedding photographer, you should clarify that you won’t provide make-up services.
4. Identify compensation. Explain how much you charge and when the client needs to pay. Also explain when payment is late and whether you will assess a late fee or interest.
   • For example, you can write, “Client shall pay Contractor $20 an hour, due within 30 days of the invoice date. If Client is more than 10 days late with payment, a $25 late fee will be assessed.”
5. Describe the project schedule. If you’re doing a large project for a client, then you should identify the schedule and important benchmarks. This lets your client know when they can expect certain work to be finished.
   • For example, if you are ghostwriting a book of 100,000 words, you can state that the first 30,000 words will be delivered after one month, the next 30,000 after the second month, and the remainder after three months.
   • Remember to clarify how the client is supposed to approve of the work or suggest changes. For example, you might give the client a week to review your work and then submit changes in writing.
6. Explain how to cancel the contract. Either you or your client might want to end the relationship early. You should explain how the contract can be terminated and the grounds for doing so. Specify how the client is responsible for making payments after they cancel.
   • For example, you can write: “Client may cancel at any time for any reason. Cancellation must be in writing. Client is responsible for payment for all work performed on the project up to the date cancellation is received. If Client cancels the project after its completion, Client must make full payment.”
7. Add a confidentiality clause. Your client might not want you talking to anyone about the work that you do. For example, you might be working with confidential information that is valuable. The confidentiality clause should identify the confidential information and explain how long the confidentiality must be kept.
   • For example, you can write, “Contractor acknowledges she may receive information relating to Client’s products, creative works, business strategies, vendor lists, and other proprietary information which gives Client an advantage. Contractor agrees to protect the confidentiality of this Confidential Information for three years. Contractor agrees not to share this Confidential Information with third parties or to use the Confidential Information for her own benefit.”
8. Include boilerplate provisions. Look at your sample contract. It probably has standard provisions (called “boilerplate”) that appear in all contracts. Insert them in your own contract:
   • Choice of law. If you go to court, the judge will need to apply some state’s law. You can choose.
   • Dispute resolution. You might want to avoid going to court. If so, you can choose Choose Between Arbitration and Mediation.
   • Merger. State that the contract contains the entirety of your agreement. This keeps the client from claiming you had an oral side agreement.
   • Severability. If a judge finds one portion of the contract illegal, they could strike down the entire contract. You can prevent that with a severability clause.
9. Sign and date the contract. The contract is only valid if everyone signs and dates it. Keep the original for your records and give the client a copy.

Billing Properly

1. Track your hours accurately. You can’t get paid unless you can bill accurately. Accordingly, you need to keep detailed records about the work you do. For example, you can create a spreadsheet and note all of the time you spend on a project.
2. Bill upfront. The easiest way to ensure payment is to require clients to pay upfront. For example, you might be hired to create an eBook cover for a writer. You can demand that the client pay a certain percentage upfront before you begin working.
   • It’s up to you to set how much the client must pay. Some freelancers require that 100% be paid upfront. However, others charge 30%.
   • Even if you feel uncomfortable asking for money upfront, you still need to do it with new clients. Once you establish a business relationship with someone, you can reduce or eliminate the down payment.
3. Invoice properly. You need to develop a system that allows you to invoice promptly. For example, it’s better to invoice directly after you finish a job than to invoice only at the end of the month. As a compromise, you might want to bill once a week.
   • Your invoice should contain all important information: your name and contact information, the project name, reference number, and payment amounts.
   • Invest in invoicing software so that your billing is automated, which can speed up the invoicing process. Popular invoicing software includes Freshbooks and Quickbooks Online. If costs are a concern, you can use Microsoft Office, which has an invoice template.
4. Offer a discount for early payment. Create incentives for a client to pay early. For example, you can offer a discount of 5-10%. This might induce prompt payment.
5. Accept multiple payment options. The more options you give clients to pay, the more likely they will. For example, you should certainly look into accepting credit card payments. If a client is short on funds, they can use their credit card.
   • PayPal offers merchant accounts that make accepting credit cards easy. You can insert the PayPal shopping cart on your website.
6. Remind clients when they are late. Sometimes invoices get lost in the mail, so a client who doesn’t immediately pay isn’t necessarily trying to stiff you. However, you need to gently remind them that payment is due by sending a follow-up letter.
   • If they don’t respond to your follow up, you can send another letter explaining they are late and that you might need to take legal action.
   • You should also stop working for these clients until they pay you.
7. Hire a debt collector. You don’t have all day to chase clients for payments. Eventually, you might need to hire a debt collection agency who can hound the client for payment. Make sure the bill is sufficiently large. Debt collectors typically charge a percentage of the debt, and they might not work for small unpaid sums slide.
   • You can find a debt collector by checking the member listings for the Commercial Collection Agency Association.
   • Look for collection agencies certified by the Better Business Bureau.

Tips

• To get paid, you have to do outstanding work. Increase your professionalism if necessary. Finish jobs on time and do them well.
• Ask for a personal guaranty if you are working with a corporate client on a big project. The owners of corporations and LLCs are shielded from liability if their businesses can’t pay bills. By getting a guaranty, the owner agrees to be personally responsible for the debt.
• Consider working on a retainer basis with regular clients. This means the client pays you a sum of money for the month and you perform a certain number of hours of work.
• Trust your instincts. A client might not have any obvious red flags, but you still suspect they won’t be a good client. You need to trust your instincts and avoiding working with someone who makes you uneasy.

Sources and Citations

See also

• Verify Your Credit Card on Freelancer
• Verify Your Identity on Elance
• Use the oDesk Team App
• Turn Off Chat Sounds on Freelancer
• Survive a Freelance Programmer's Life
• Start a Job on Odesk
• Request a Service on Redbeacon
• Report a Project on Freelancer
• Protect Your Ideas As a Freelancer
• Post a Task on TaskRabbit

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