Why you should include milestone payments in your freelance contracts

Anyone who has ever freelanced will have either heard the story below or been a victim of it at some point.

‘The freelancer engages in work for a client for which payment has been promised, but payment is never received.’

Sadly, many freelancers are vulnerable to this low-down level of treatment because they do not create any level of tie-in for the client. The freelancer wins the work, agrees to be paid once the work is delivered, then they never hear from the client again.

Let’s be clear before we go on, this is not a practice just confined to micro and small businesses, this level of treatment is rife in the freelance industry.

3 stages to ensure you get paid for your work

There are ways to ensure you get paid for your work. The most common is to set up a contract with your clients for every piece of work you do for them.

Most freelance projects are based on two different quoting methods. The first being based on an hourly rate, the second being a set charge for the whole project. Which you choose is up to you, but you must ensure you explain this to your client at the outset.

Structuring the payment terms for a project will ensure you receive payment and ensures the client keeps a vested interest in the project.

1. Insist on a deposit up front
2. Agree on one or two stage payments, depending on the size of the project. This could be on the delivery of the first draft/designs.
3. Agree on a third stage payment. This is often the final payment, but if you are a graphic designer who is also managing the print for your clients, then you may want to add a 4^th stage payment which would cover the cost of the prints.

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Ensuring compliance with the agreement

Simply putting a contract agreement together with your clients’ signature on it may not be enough. It is important to make sure your contracts are water-tight. For a relatively inexpensive fee you can have a set of terms and conditions written for you by a solicitor.

Include a copy of these with every contract. A lot of freelancers will print a copy of their terms and conditions on the reverse of the contract page.

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Use money as your motivator

Sometimes you can become so entrenched in a project that you succumb to feeling overwhelmed. Big projects, with multiple facets to them, can take a long time to complete and if you’re not careful creative block and a lack of motivation can creep in.

Use money as your motivator to hit those milestones, but don’t scrimp on quality just to get paid early.

Contracts are beneficial to your clients too

If you are unsure about working with contracts, and nervous about even suggesting them to your clients, remember that they are beneficial to your clients too.

Staged payments for projects will help your clients’ cash-flow as well as your own.

Each stage will also mean you keep regular contact with your clients and will reassure them that you are ‘cracking on’ with their project and on target to meet whatever deadline you agreed.

In conclusion

Whichever way you structure your contracts and agreements with your clients, all the parties involved can enjoy lots of benefits from the process which will help you thrive in your freelance career.

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Author Phil Ainley, Marketing Manager