Managing your finances as a freelancer can be tough because you’re not always getting regular work. Some months you might have plenty of work on and money isn’t an issue, but then work might drop off for a couple of months and that’s when you start to struggle. It’s important that you get into the habit of putting money aside whenever you get paid so you can get through the quiet periods, and you need to be frugal with your spending as well so you don’t burn through your savings.
But even if you’re doing that, you could still find yourself in a financial bind if you get a client that won’t pay on time or somebody that disputes the amount that they owe. This is more common than you think and it’s actually one of the biggest struggles that freelancers face. Difficult clients are unfortunately just part of the job when you’re a freelancer and you’re going to come across them at some point, but there are things that you can do to avoid any major problems. These are some of the best ways to make sure that you get paid on time as a freelancer.
When people are first starting out in the freelance world and they’re desperate to take on any work that they can find, they often make simple mistakes, like not using contracts when they agree to take on a project. They assume that the client will be true to their word and pay the agreed-upon price once the project is finished. A lot of the time, they will, but if you don’t have a contract in place, there isn’t really much you can do if they refuse to pay. That’s why you need to use a proper contract for every single job that you take on so you have a legal avenue to go down if they refuse to pay up. It’s worth investing in document automation software so you don’t have to draw up the contracts manually every single time. You’ll be able to create professional pricing lists for customers and generate airtight contracts when you take on a project, so clients know that you’re not going to stand for any messing around when it comes to payment. If they don’t pay, you have a contract to use as proof of the agreement if you end up taking legal action against them.
Request a Deposit
It’s perfectly reasonable for freelancers to request a deposit up front when they agree to do a job for a client. It gives you some protection so if they do decide that they’re going to withhold payment, you aren’t left with nothing. It also sets a precedent and shows the client that you’re serious about getting paid for your work. There are no rules about how much you should ask for but you don’t want to start demanding half of the money upfront because that is likely to put clients off. Usually, about 20 to 30% of the total cost of the project is reasonable. Make it clear that you expect this payment right away before you start working on the project so the client understands that you’re not going to work for free.
Invoice Quickly and Clearly
Clients aren’t going to pay until you request it, so you need to send out your invoices promptly as soon as the project is delivered. If you wait around and take weeks to invoice, you’ve only got yourself to blame if you start running into financial problems. It’s also important that you create a clear invoice that outlines exactly what they’re paying for and when you expect the payment. If you aren’t clear with your invoices, you leave room for the client to dispute it. They’ll come back to you with questions about how you calculated the cost and they may try to knock the price down.
Consistency is important as well because the client isn’t going to be happy if the final price differs greatly from the original quote, and they’ll definitely challenge it. When you are first quoting a job, you need to be clear about what your pricing structure is and what the client will be paying for. Give them a detailed quote and keep a copy for yourself so when it comes time to invoice them, you can refer back to the original quote that they agreed to if there are any disputes.
Clients that won’t pay are just a part of being a freelancer and you’ll have to deal with at least one. But as long as you follow these steps, you can make sure that you get your money.