Freelancers: How to Get Paid

Back in April of this past year, Freelancers Union launched a weeklong campaign to bring to light the plight of many freelancers around the globe: not getting paid. They called it, “The World’s Longest Invoice” and freelancers could post their name, along with the job they’d done and the amount they had been stiffed for by their deadbeat client.

In one week’s time, nearly $16 million in unpaid work had been posted. A pretty epic amount, and although exactly $0 of it was verifiable, it did a great job of showing the side of freelancing that people don’t like to talk about that much: running your business.

While I felt bad for all these thousands of freelancers, I couldn’t help but shake my head and think of all the ways all of these people could have avoided being owed anywhere from a few hundred bucks to over $100k. As mad as you want to be at the scum that screwed all of these people over, the fact of the matter is that there are just some crummy people on earth and you can’t fix that. Instead, what you do is learn how to avoid them and not get yourself into a bad situation in the first place.

So, here are a few lessons, tips and tricks I’ve learned through a good decade of doing consulting work. The large majority of the work I’ve done for clients has been design, development and motion work, but these really apply to anybody doing work for anyone on a contractual basis.

 The Contract

If you don’t read anything else, read this: you absolutely, unquestionably need to have a contract.

This is one that blows my mind every time I read a story of someone not getting paid. It’s the easiest, most practical thing you can do to ensure you get paid. And really, the contract isn’t so much about having a legal document to use against a client in court. It’s about establishing expectations up front so everyone is on the same page about the work being done, how much it will cost and when payment is due along with what will happen if the client doesn’t pay.

If you’re like me and hate the legalese present in most contracts, you should check out Andy Clarke’s Contract Killer. It’s a fantastic start to building your own contract.

 Deposits

So, you’ve taken my advice and vow to get a contract together, but it’s still just a document and it doesn’t guarantee that you’ll get paid.

But you know what does guarantee you’ll get paid? Getting paid.

Don’t start a single second of work until you’ve got a deposit. For new clients, I require 50% down to even put a client on my calendar. Having the upfront deposit means that you unquestionably get paid and shows that the client is serious about you doing the work for them.

On top of that, you don’t deliver the final product until you get paid the remaining 50% at the end of the job.

Requiring that the bill is paid in full before delivering the files typically gets most clients who thought about stiffing you on payment to go ahead and fork over the cash.

For larger-budget jobs, I’ll typically divide a bill up into 3-4 payments due every few weeks.

 Payment Terms

NET30 is ridiculous. There’s zero reason to have payment terms that long. Any company that tells you they only pay NET30 (or longer) is bluffing. They’re just delaying payment as long as possible for cash flow reasons, but the fact of the matter is, they can unquestionably pay you faster.

You’re not a bank. You did the work and they owe you money and they’re sitting on it for as long as they can. Not gonna work.

I have NET10 payment terms, though I know folks who do NET7 or event “due on receipt.” I’m not a fan of “due on receipt” only because it’s not really practical for most businesses and it doesn’t set a hard due date that everyone agrees on.

You should communicate up front with the client what your payment terms are and, just as importantly, what the penalty is for being late on payment.

 Communication

At the end of the day, this all really comes down to one thing: communication. So many people could have avoided all the issues they had with getting paid (or not), had they just communicated well up front.

Communicated about what their expectations were. Communicated to understand what the client’s expectations were. Communicated about the services that were to be provided and on what terms.

Before you start any project, you should talk to your client at length. Learn about the person you’ll be working with and the company you’d be working for. Learn what their values are. Learn why they’re hiring you in the first place. Learn what their end goal is for the work you’re doing. Talk to them about exactly what you bring to the table and see if they find the same value that you find in yourself.

Then learn to walk away.

If something doesn’t sit well, if the client pushes back constantly on the budget, if they talk frequently about how they’re a “startup and doesn’t have much money"…move on. Walk away.

Have a little common sense, use your gut, and don’t get blinded by the prospect of "winning a job.” Bad clients just aren’t worth it.

 
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