By Alyssa Gregory

Freelancers: How Do You Get Paid?

By Alyssa Gregory

paymentA universal goal of freelancers and other business owners is to get paid for the work we do quickly and in full. There are several general payment options you can offer to your clients, each with their own positives and negatives. Plus, there are a number of things you can do to make it easier for clients to pay you, and pay you on time.

Payment Options

Here are a few options you may have for getting paid:

Check – Accepting business or personal checks is a very common way of getting paid for your work. The biggest challenge is having to wait for the check to arrive in the mail and then for it to clear in your account.

PayPal – Many freelancers accept payment via PayPal and other similar services. This can provide instant payment and only requires the client to complete a short online process to send payment. The biggest downfall is the third-party transaction fees that get deducted from your payment.

Credit Card – If you have a merchant account and are set up to take credit card payments, this is a great option. It allows clients to pay via credit card and you can even process the payment yourself if you have a standing agreement with your client. Again, there are fees incurred for the benefit of instant payment.

Wire Transfer – A wire transfer is not a very popular payment option, but it also provides payment much quicker than a check. Of course, you will have to share your bank information, including your account number, which doesn’t appeal to many people. And, of course, there is also a wire fee.

Money Order – Paying via money order requires that the client goes to a third-party, such as a bank or post office, to purchase it and then it can be mailed to you. This is also not a very popular method, but it is a valid option for those without the ability to pay by check.

Ways to Encourage Payment

Regardless of the methods of payment you offer to your clients, there are a few ways to put yourself in a position to get paid when you expect to be paid.

The first step is creating standard and consistent billing practices. If you bill the same way at the same time each month, it will be easier for both you and the client to plan ahead. You should also outline your billing practices in your contract, and review them with the client as necessary.

If you find that late payment is a problem you frequently face, you may consider instituting penalty fees for missed or late payments. Again, this should be outlined in your contract and discussed with your client so there no confusion.

Depending on the type of projects you do, deposits are another way to ensure you get paid. You can require your clients to pay a portion of the total cost up front, and then set milestones for additional payments. If you are particularly worried about receiving payment, you can also wait to begin any work until the initial deposit has been received.

Lastly, you can also consider offering a payment plan option. However, this may not be a viable alternative unless you have an established relationship with the client. If a long-term client experiences unexpected financial hardship, a payment plan can ease their financial burden while helping to ensure you get paid, even if it is in smaller amounts spread over a specific period of time.

How do you get paid for your work? What other options would you consider?

Image credit: Jeinny Solis S.

  • bigmastiq

    I can add Moneybookers also, especially for freelancers in Europe as they cover many local payment methods and because of the low fees.

  • I use paypal and, depending on the project, ask for half the quoted price up front

  • I get paid via FreshBooks. It allows my clients and other suppliers to pay me via credit card or even paypal. I do all my estimating, time tracking and invoicing in FreshBooks. My clients have their very own login and paying me could not be easier. Best of all, it is free for a basic account! It’s been a great help in getting paid on time.

  • Webstergroup

    I take Checks and use PayPal to accept Credit Cards and for recurring bills like hosting.

    Also, I take three draws when building a new site.
    1) Deposit
    2) Design & IA approved
    3) Final before launch ( I often get the final payment before the client has filled the site with content)

    Getting the Final payment when the site is completely programmed and NOT when the client has finished putting in their content, prevents clients from dragging out the sites’ development and at least allows me to be compensated if they do. I USED TO GET BURNED ON THIS

    Hope that helps.

  • stk

    Larger jobs are exclusively by cheque. We require a deposit before starting work. Subsequent payments are requested at various flexible milestones and a detailed invoice is sent along with the request.

    Smaller jobs are paid by cheque or PayPal. We maintain two paypal accounts (personal & business). Quoted prices are paid to the personal account (no transaction fees), but if a client prefers to pay by Credit Card, we direct them to the business account and put the onus on them to pay any/all transaction fees (we request a slight mark-up be added).

    PayPal has also been nice, because it allows multiple currencies (We’ve utilized CAD, USD, British Pound and Euros).

    We’ve also done work where we’ve accepted charitable donations to organizations like kiva.org and makeawish.org, using a receipt as confirmation of payment.

    We’ve never directly accepted credit cards, received money orders or wire transfers.

  • mhchipmunk

    The majority of my clients pay me by a bank email money transfer (I’m in Canada). No bank information has to be shared and the money goes directly from their account to mine. This only works for the big banks (CIBC, Royal, BMO, TD) and not the credit unions but for most that is not an issue. It’s fast, cheap ($1.25 charge for the person transferring)and I don’t have to go to the bank!

  • I accept payment via credit card, or paypal. Credit card acceptance is a must, because even though we are living in 2009, many people don’t like to pay for things online. They’d rather drive over to my shop and swipe their card through my terminal.

  • Payment is a breeze.. I use paypal payments pro on my site, and people just order up in full, upfront. Have been doing this for 2 years now over the course of nearly $100k+ and works well.

  • devAngel

    When I was freelancing, we use Paypal and Bank Wire since its the easiest way to collect payment. And usually, we require at least a 50% deposit from the client and the rest of the payment to be sent after the project is complete.

  • I use PayPal for overseas clients but nearly all local clients pay by electronic funds transfer via online banking. In Australia there’s no fee (well not with my bank anyway) for these sort of transactions and it’s a pretty common way to pay.

  • Terrence

    I use CurdBee (http://curdbee.com) for my invoicing. With CurdBee I can accept payments via PayPal, Google Checkout for free. They do also offer 2Checkout integration just for $5 per month. Since I’ve got lot of non-US clients I decided to register for 2Checkout and use it with CurdBee.

    That system just works for me without any hassles.

  • biswa

    Alyssa Gregory your are always coming with new idea great carry on

  • Vantrix

    I preferPaypal. However i always it a point at the time of quote to inform the client that they would have to add transfer fee to the project cost. This way i end up getting total project cost. One of the nifty tool for calculating paypal transfer fee is http://www.ppcalc.com

    Anita CM


  • stk

    Anita – Thanks for the PP xfer calculation link. That will be useful. ;-)

  • Anita CM

    Pleasure is mine “stk”! Just thought of letting know others my experiences and how to get best out of Paypal…

  • As a general rule, my clients pay by check. For a big project, I collect 50% up front and the balance when the site is finished. I have clients that ask to pay via PayPal. I allow it but never encourage it b/c of the fees. But I like Anita’s idea and may use it in the future.

    My biggest problem is customers that cannot seem to pay their bills on time. It seems rude to me. I know they pay their mortgage and utilities on time, but they seem to think I’m less important. I haven’t found the right way to deal with them. I’m considering either insisting on a PayPal Subscription or charging them a late fee.

  • nbeske

    As a designer that offers web hosting to all my clients i use WHMCS as a billing tool that keeps up on all invoice reminders, late fees, and renewals. I use it for everything too, not just hosting packages. and for hourly work as maintenance i use Harvest to track time which has a built in invoicing feature as well.

  • stk

    @surelybwh – Our original invoice states “terms” at the bottom, which provides a bit of leverage for overdue payers: “Thanks for your Business … Payment due upon receipt (Terms: 30 days, 10% per month for overdue accounts)”

    We try to remind folks before the 30 days are up, but sometimes we get busy and forget. We rebill every 30 days and though we don’ often GET the 10%, we DO GET full payment (generally after the first “re-billing”).

    Hope this helps.

  • Dave

    Indeed there are endless offerings for merchant account and Credit Card Processing. so many offers that one cane easily get lost. A merchant should apply with 2-3 providers and compare. He can do so using directories such as http://www.creditcardprocessing-r-us.com that are merchant oriented, focused on the different type of accounts.

Get the latest in Entrepreneur, once a week, for free.