7

Most of the clients are prompt and pay the money on completion of the project. While some companies agree to pay the amount as soon as project delivery, it never happens as expected.

The reasons they give is that they are testing, or that they are out of town. They'll say "Please bear with the delay we are expecting some income from other sources."

So in such cases, having advance payment prior to project development is better.

How do I handle the contract situation in such cases? How do I make a contract prior to project development?

11

There are obvious benefits to the freelancer if payment is made up front:

  • No chasing the money at the end
  • Harder for a client to cancel the project if they've already paid

There is also a big risk to the client:

  • What happens if the freelancer dies or disappears before the end of the project?

I have seen 2 reasons why clients are willing to take that risk:

  • If there is a significant discount for pre[payment (say 10%)
  • Clients who have annual department budgets that they must spend by the end of the calendar year may use up front payment to insure that they can fund projects that cross budget years.

Personally, as a freelancer I have learned being paid the entire amount upfront is not for me. I've learned that my motivation to work on a project is tied to the money I will be earning. If I've already been paid for everything, my desire to work on the project tanks. That being said, I know other freelancers who prefer this approach and only take up front payments. And I almost always ask for partial payment up front, just not the whole thing.

Regarding the contract...yes. You always create a contract prior to project development, and in this case you would just include that the terms are that payment must be received before the work can begin.

  • +1, great answer, but especially for What happens if the freelancer dies or disappears.. I learned recently in software development that's called the bus factor – MDMoore313 Nov 12 '13 at 13:37
  • I don't like to be paid fully in advance as well. You then simply lack motivation. It does not have to strictly bound to the money itself, but maybe to the lack of a reward. This may be only good if you have someone else working the project for you. Then you are sure you have the money for the contractor. – Peter MV Nov 13 '13 at 6:27
  • yeah personally for me also it is better for both parties if we paid atleast half the amount in advance. Keeps me on the toes to deliver in time. At the same time client is also tied so he would also want the project completed in time. So both parties eventually benifit. – Raghunandan Nov 14 '13 at 16:32
2

You have to make sure that the client pays some amount in advance. there is every reason that the client may decline the advance. So as a general level of strategy, before asking for the advance put up a mark in the client by establishing your credentials. Talking about your previous websites, deeds you have done , demonstrating your work etc.

  • 1
    Hi johney, welcome to Freelancing.SE. We are currently in our beta period, and need long, detailed answers to survive here. Please edit your answer to add more details, and possibly some more explanation. Thank you – Canadian Luke REINSTATE MONICA Nov 15 '13 at 16:37
  • @CanadianLuke -- Please explain. Yes, details help add value. Are answer lengths measured by the SE masters? – Martin F Jan 13 '14 at 2:59
  • @martinf It's because we need answers that clearly explain a solution to the problem. As it stands right now, this is a very vague answer, and could use some cleaning up. When I posted the comment, it was shortly after the post was made, hoping that johney would have a chance to clean it up themselves, hopefully realizing that's what we want in this place and improving the overall quality. – Canadian Luke REINSTATE MONICA Jan 17 '14 at 1:08
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Yes. You are providing a service, investing your time ensure your clients are serious by investing their money.

I ask for 50% deposit before any work, never had anyone dispute that.

  • Hi Tim, welcome to Freelancing.SE. We are currently in our beta period, and need long, detailed answers to survive here. Please edit your answer to add more details, and possibly some more explanation. Thank you – Canadian Luke REINSTATE MONICA Nov 15 '13 at 16:37
  • @CanadianLuke -- length of answer = k / age of site ? – Martin F Jan 13 '14 at 2:56

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