I have a question about how do i ensure that I get paid for my work which i do for people in other countiries ?
1)As far as I know, In this case, contracts/legal stuff do not work…
2)I probably wouldn’t like to ask the client for an advance because it may put off the client… I would like to get paid for milestones or in case of trivial projects, when the project gets completed.
3)And probably I would like to avoid asking the client to pay through any freelancing sites which do provide an escrow system ( to keep both the buyer and the seller safe) because I probably do not want to create more competitors for myself and lose potentially paying clients.
You should definitely ask for an advance, but that should not be a big amount when compared to whole budget. After that you should create milestones and after completing a single task for whole project make sure to get payment first and then move to the next task. This way there will be less chances of losing money and even if the client won’t pay full, you still will be having satisfaction for getting payment for most of the work.
yea, thanks … i’ve been thinking about the same but was just wondering if there was anything similar to escrow system of freelancing sites without the possible competitors/other freelancers
Getting an advance/deposit is a good idea IF you have clients who you think will be non-payers. But, it’s sort of a band-aid approach. This seems simplistic, but the way to ensure that you always get paid is to find great clients and do great work. Great clients will pay for great work 99% of the time.
While you are working your way up the client ladder, try to take a deposit if you need to be sure to make it as small as possible, just to minimize your risk.
You need to be confident in your abilities, and asking for money in advance shows you have this confidence to the client!
Of course you don’t have to ask for all the money in advance. Most commonly, you ask them to purchase a number of hours of your time, and then you ask for more as needed. Keep in mind the client can also take advantage of you by asking for too much of your time as compared with the money paid.
When you tell a client that you’ll just invoice them Net 30 each month, it really demonstrates confidence in the whole thing. Asking for a deposit just sends the message that you don’t trust the client OR that you are cash poor and don’t want to float the invoice.
Most of the projects i work on are one off so mostly there isn’t a provision to invoice the client monthly…
Great suggestions all… while we are at it what do you think is the best method for payment transactions - payapl or what else ? I heard that paypal transactions could be reversed… I recently had a client who sent me some money through paypal using someone elses name… Is there a possibility that transaction coule be reversed… After the initial work that was paid for, I have done considerable work that’s still unpaid…
For one-off projects with clients in foreign countries, get a deposit first - I tend to go with around 10% of the agreed fee.
Make sure that you set out clearly in the contract that you expect payment as you go through for each milestone.
And then leave maybe 30% of bill left to be paid upon completion (NET 30 or so).
This way you have minimised your risk, so at worst you will just not be paid for the final piece of work.
If you work with the client again in the future, then as you’ve already built up trust you can amend how much you leave as a final fee to reflect that trust.
It is obviously preferable to only have clients that you trust from the outset, but that is often not possible and even harder working internationally.
regarding Paypal - it’s a pretty standard way for people to pay internationally, but the refunds and other problems some have with the company means I wouldn’t always rely on it. Direct bank transfers are easy and quick too.
I’m really interested in hearing about any alternatives to paypal… specially where people could just use their credit cards / debit cards / online banking without needing to leave …
Bank transfers, I suppose you mean international wire transfers are good but they are sometimes expensive in some counties… and probably you need to walk in to a bank (not sure if these could be perrformed online from home)
specially in my case as i take up small projects such as bug fixes etc… iif there were some fixes for which i was going to charge $100, $30 or $35 is quite a lot on top of that money for a transfer fee…
How about moneybookers, alertpay etc.? How different are these from paypal ? Can transactions through these be reversed as well… Hope someone here has some kind of experience with these services…
Well I think on Moneybookers transactions can definitely be reversed If you want to send it back to the sender. Also I would say MoneyBookers is cheaper than Paypal.
Some people are put off by first time met freelancers, so i believe taking a leap of faith is your best bet. Of course you should expect to get screwed sometimes, and hope you will not.
(1) Contracts can work, and having a well drafted agreement with your clients is important. However, you are right that contracts and legal action are not effective in many cases. A contract will not protect you if the amount you are owed is too small to justify the time and cost involved in pursuing legal action. A contract will not protect you if you cannot get jurisdiction over the other party. A contract will not protect you if the other party simply has no money to pay for the services you delivered. However, I still recommend that you have a good contract for those instances in which it makes a difference.
(2) I think in many cases an advance is appropriate. Of course, if you are as unknown to the client as the client is to you, then there is a question of who should trust who. You would be asking the client to trust you with his money before you have shown that you can and will deliver the services you are promising. An alternative, which can be used either with or without an advance, is what is known as progress billing, which is what arthurhcates described.
(3) I agree that going through a freelance site simply to take advantage of the escrow function does not seem like a good solution. Although it does solve the mutual trust issue I mentioned above, I don’t believe that introducing a third-party to your client relationship is generally a good idea.
I think that Sagewing is correct when he says “the way to ensure that you always get paid is to find a great clients and do great work.” However, the situation is almost never that black and white.
I am in a different profession, but face the same issue. I have many clients who have been clients for more than 20 years. I would never dream of asking one of them for a deposit on a new matter. But I am also always getting new clients. Some of the new clients are well-established businesses with known reputations. I also would not ask those businesses for a deposit.
In many cases, however, new clients are startups or small businesses that are completely unknown to me. From experience, I know that many of them have big dreams but very small pocketbooks. While they have every intention of paying the bill, it is based on their expectation (often unreasonable) that revenues will take off immediately or that their business will bring in money from investors to pay the bills. The only way I have found to deal with the problem is to ask for an upfront payment.
A few weeks ago, I met with a potential client who came as a personal referral from someone who once worked for me. After meeting and discussing his needs, including the potential cost, I asked for a deposit of $500, representing only a very small portion of the expected cost of the project. His response was that he felt that was reasonable and wanted to proceed but said it would take him several days to get the $500 together.
That was a big red flag for me. I would be potentially providing thousands of dollars in services to someone who couldn’t even write me a check for $500. I politely, but firmly, revisited our discussion of the cost of the project, emphasizing that I would have to stop work if our fees were unpaid and that there was no value at all in a half finished project. Thankfully, he did not decide to pursue the project, or at least not with me.
There were no outward signs that this client who was referred to me would be a problem payer. Only my request for a deposit saved me from a disastrous engagement.
Thank you for a great post Green Moon. It’s mostly common sense stuff until the fear about losing potential business(which is actually a better thing than not getting paid for your efforts)
And webcosmos, yes I agree but it’s better to at least do every thing possible to avoid that kind of a situation.
Lastly, I’m still waiting to hear about some alternatives to paypal , specially from people who get paid for doing remote work…
I’m wondering if i should create a new thread for this…
Unfortunately you cant be sure of that, and asking for an advance shows you dont trust them or you`re too poor, so do your best and hope everything will be fine.