Client Tip #2: Always get a down payment
Scott Manning
September 2, 2002
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There are plenty of horror stories out there of freelancers doing weeks - even months - worth of work and never getting paid a cent. The client either ran off with the work or disappeared altogether. Whatever the case, beginning work without a down payment is ridiculous and should be avoided like a car accident.
Show me the money!
I've done numerous jobs for people I've never met. In some cases all my correspondence with them was through email. At the same time, I've done jobs for close friends and clients I knew very well. In all those instances, I still made sure I got a down payment.
Getting a down payment before starting work is almost as important as having a contract. Not only does it show the freelancer that a client is serious about a job, but it commits both the client and the freelancer to seeing the project to its completion.
The amount of the down payment can depend on the size of the job. I typically require full payment for jobs under $300. Jobs between $300 and $5,000, I require half. Past $5,000, I'll do fine with a third or even a fourth. Whatever the price of the project, there should always be some sort of down payment involved.
Working for future pay
Large corporations will bend over backwards to woo potential clients by giving them free advice, free luncheons, and even free work or products. This is all done with the hopes that the potential clients will choose their corporation over the competitors. While this practice has the potential to bring a large return on the initial investment, a lot of these corporations have millions of dollars to burn. Unless a freelancer has the money to spend, they should avoid this practice completely.
When a client asks a freelancer to work for free now and receive money at a later date, this means the client does not have the means to pay the freelancer (or it's a scam). The freelancer is then forced to either believe the client will eventually get money or buy into the client's vision for whatever business they are currently trying to build.
Freelancers should not have to work under this kind of pressure. They should have to worry as little as possible when it comes to getting paid. By getting a down payment, the freelancer is put at ease when starting a project.
What about payment plans?
Some may be thinking that I am a little too hard-line on this subject. Some have told me:
"Certain circumstances and economic situations call for a little leeway for clients. A commitment to pay or a payment plan would be a reasonable alternative. Car dealerships and department stores offer payment plans? Why not freelancers as well?" While those are some very valid points, several things need to be considered. Before a car dealership even thinks of offering a payment plan to a customer, they run an extensive credit check. Based on the results, the car dealership can decide whether or not to do business with the customer.
Freelancers typically do not have the means, know-how, time, or client information needed to run a credit check. And they should not have to.
Accepting payments
Methods of accepting payment needs to be a whole separate article, but credit card is the best. Being able to charge credit cards makes payments easy for the client. This would require a merchant account and a business bank account.
Checks and money orders will work as well, but waiting on the mail can slow the process down. PayPal should never be used (there are several alternatives).
However you accept payments, save yourself the headaches and always get a down payment. |
