Why You Should Always Require Money Upfront as a Freelancer
Many new designers enter the market with naiveté and trust. Although you might have the best intentions when you first agree to a project, this doesn’t mean your client feels the same way about integrity and honesty. Requiring money up front will give you leverage if something changes or goes wrong during the course of the project.
What Can Happen Without a Deposit
If you don’t require a deposit upfront, you can be stuck with many hours of work, with a client that refuses to pay. If a client refuses to pay any money up front, walk away. A client should always be willing to pay upfront for your services. Trust is a two-way street, and it needs to be adhered to by both parties. Client excuses for not being able to make a deposit can range from reasonable: “I don’t have the authorization to do that for my company yet” to the unreasonable: “Why do I have to pay before I see any work?” Emphasize to them the fact that requiring money upfront is a common practice in the design industry and it is a very reasonable request to make sure you get paid for your work.
Without a deposit, clients can take your work and use it however they wish. If the client still refuses to pay, you could be forced to swallow your loses, or take the client to small claims court. Going to court should be used as a last resort for a delinquent clients, since it is a huge hassle to collect your money. Let them know that it’s not acceptable to take advantage of your payment requirements and that you’ll maintain close communication with them.
Be Clear About Payment Terms
Your payment terms should always be laid out clearly in your contract with the client. Many times, expectations aren’t set beforehand and the client isn’t sure when you’ll send an invoice or when they are supposed to pay. If you’re charging hourly, invoice them for the first 10 hours of work before you start. If you charge per project, It’s always a good idea to require 50% (or whatever percentage you feel is appropriate).This way, no one can take advantage of you without your consent.
If a client refuses to pay after that, at least you can cover yourself until your next pay-day. Lastly, never hand over digital files until everything has been paid for. At least if they don’t pay, they can’t use your work.
What a Deposit Really Means
You are viewed as a professional: Professionals who implement and follow payment policies are viewed as people who take their services and business seriously. This way, your time and services are valued and they won’t be taken off guard when you send them invoices.
Commitment and trust is developed: Once a deposit is paid, the client has trusted you to start on the design work. It’s a working relationship and being paid is a sign of respect from your client. Without a deposit, your client may still be on the fence about the project. This is a good way to solidify their commitment to working with you.
How to Ask For a Deposit
You might think that asking for a deposit will scare your client away. If your client isn’t willing to give some type of deposit upfront, then they aren’t ready to proceed with the project. Don’t fall for the trap that they will pay you later. This often means that they will pay you if they like your work, but if they don’t, they can easily just walk away without spending a cent.
Explain to them that you do this with every project you’ve done in the past, and all your clients have been pleased with your work. Tell them that deposits are a common practice in the design industry and that it’s just to make sure that you’re both committed to proceeding with the project. A reasonable client should be understanding and give a deposit. Don’t get frustrated with clients that don’t want to provide the money upfront – be professional and let them know that you’d be happy to work with them later on when they can provide a deposit.