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March 23, 2011
Getting Paid the Freelancer's Way
Hopefully your life’s work isn’t all about the money. Hopefully you enjoy what you do. But everyone everywhere wants to get paid for his or her work quickly and in full. With more professionals turning to freelancing as a new career path or to supplement income, it’s important to have systems in place to collect payment. Personally, I have success and horror stories on this subject, and my best advice is to 1) make it clear how much and when your client will have to pay you; and 2) make paying you as easy as possible for the client. Thanks to technology, you can offer several payment options to make it easier for clients to pay—quickly.
Encouraging Swift Compensation

The Contract. Money is never an easy subject. I guess that’s why people slide their offers on a piece of paper instead of saying them out loud. Having the cost in writing, as part of your service contract, is beneficial to both parties in case there is ever a dispute about what dollar amount was agreed upon. Outline the amount to be paid, when, and how in the contract.
Deposits. Deposits are great way to ensure you get paid. You can require your clients pay a portion of the total cost of the project up front, and then set milestones for additional payments. Depending on how well I know the client, I might begin work without a deposit, but for new clients I usually require one before I begin. Some freelancers base the upfront amount on total estimated hours, and some ask for a certain percentage of the overall project fee. It’s up to you, but be firm once you’ve set the amount.
Invoicing Software. No matter how easy you make it, some clients just don’t pay as quickly as we would like. And even the best clients can forget or procrastinate. I find that a good invoicing software, one that automatically sends reminders, is very effective. I use WP-Invoice, a Wordpress plugin.
Payment Plan. In this economy, everyone is trying to figure out new ways to pay and get paid. 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. I wouldn’t recommend financing unless you have an established relationship with a client and they have a good history of payment.
Payment Options

Check. Checks are still the most common way of getting paid for your work. The biggest challenge with taking checks is that you have to wait for the check to arrive in the mail, and then hope it clears. Trust me, people bounce as many checks from business as from personal accounts.

PayPal. Accepting PayPal is so much easier than it was a couple of years ago. Most companies and individuals have a PayPal account, and now PayPal gives you the opportunity to accept credit cards without the hassle of setting up a merchant account. Once your PayPal widget is installed on your website, the client completes a short online process to instantly send your payment from PayPal account to PayPal account or via credit card. If clients do choose to pay by credit card, PayPal takes a fee for the transaction—but personally, I think it’s worth it for the convenience.

Credit Card. If you process a high volume of payments, or you have a storefront, you’ll probably want a merchant account that will allow you to take credit card payments. Again, this convenience comes at a price that you have to pay in fees. An emerging market for handheld credit card machines is gaining popularity, allowing you carry your payment platform with you.
Wire Transfer. I have had clients ask to use this option, and it’s a good way to get the money fast. It’s not a very popular payment option anymore because you have to share your bank information, including your account number. And, of course, there is also a wire fee.
Money Order. If you happen to accept a client who has bounced a check to you in the past, I would require a money order or credit card payment. Actually, unless there is a really good reason for it, I wouldn’t do work for them again!
What recourse do freelancers have if we’re not paid? I host many of the websites I develop, so if I’m not paid, I can easily just turn the site off. But I’d rather try other methods first. There was a case recently where a Web developer posted a nasty message about the client’s non-payment on their live website. Not cool. At the very least, not very professional.
You could impose late charges for late payments, but after years of experience, I have to say that the best method for getting paid is by holding on to the final delivery. I work on a development server. I don’t turn the site on until I receive payment. This encourages swift action on the part of the client in order to “go live” with the site.
Of course you’ll need to show the work to the client—show them the finished product and make sure it is to their specifications. But if there is any way you can prevent them from using the materials—low res files, copy-and-paste-resistant coding, watermarked proofs—before receiving payment (or at least an acceptable percentage of payment), then make that part of your delivery process.
If the client objects to your methods, just blame it on past bad clients. 

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Larissa Harris is a graphic designer, Web developer, and social media marketer. Read her blog, LarissaHarris.com; "like" her Facebook page; or follow her on Twitter
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