Getting you paid 101: Payment Schedules
It has been extremely important to figure out a number of things as a freelancer. My pricing, what I want to be paid, but even more paramount, how I want to be paid. As consultants, you have to really determine what’s going to work for you when proposing a project or agreeing to a contract.
Most businesses or organization have their own way of working—they have the method of paying out contracts. It’s super important to be aware of this method before agreeing or signing the dotted line.
I’ve had contracts that I’ve waited nearly 60 days to be paid, and others that have given me half of the funds upfront and the other half when the job had finished. But, I knew what those terms were going in, and I agreed to that cadence of payment.
Here are some tips about proposing how often you would like to be paid by your client:
Monthly: this is super common. You can submit a monthly invoice for the hours that you have worked or the portion of the project that you have done for that month. This really helped me budget early on for my business. I was able to set revenue goals and track my spending because I really see what was coming in each month.
The first half paid up front: this was great as I got more mature in business. This amount of payment front-loaded not only would cover the cost of doing the project but also, handle some things down the line for the business. It keeps me ahead and allows me to really not worry about my business expenses for months at a time.
A deposit to begin the work: For this, I am referring to some type of retainer fee. Sometimes, this can be followed by a monthly invoice, or just payment when the work is completed. A retainer fee isn’t a bad idea to begin the work. I would just be careful if that fee doesn’t at least cover the cost to get the project done. (I.e printing costs, design, other outsourced efforts
There are so many ways to determine how often you want to be paid, whatever timing you choose, just make sure it allows you to sustain your cash flow. The worst thing ever in business is to be waiting on some unpaid invoices, and you still have expenses. Find a method that works best for you, so you don’t have those problems. Sign up for the Free 3-day pricing challenge! We will discuss this and more!