How to get paid as a freelancer
When working as a freelancer or independent contractor you need to ensure that you will receive payment for your work. Spending a week or two dedicated to a project and in the end not receiving payment is an absolute productivity and morale killer. Although handling money and payments can be tricky, there are a few things you can do to make the process as smooth as possible.
Option 1: Become an independent contractor
When working for certain clients (mostly businesses) you will sometimes be asked to sign a contract as an independent contractor. For more information on what being an independent contractor entails see the becoming an independent contractor & writing a contract page.
Option 2: Create an agreement
Working for clients on smaller jobs you won't always be required to work with a contract. In most cases a simple agreement stating what work is to be done, how many hours it will take, and the pay rate will suffice. As long as you clearly state the agreement and both sides confirm, email agreement is binding in many cases. Always keep your entire record of conversation (the job posting, any emails, phone conversation dates and notes, etc.) as documentation of your agreement.
Whatever your choice, don't try to do work under the table; always properly agree upon services performed and report any payment that you receive. By doing things legimately you have less of a chance for the other party to take advantage of you. You'll also have the benefit of not being investigated for tax evasion :)
Starting work
Once you have a contract or agreement that is confirmed by both sides you can begin your work. Here's what you should be doing while completing your work:
- Document all of your hours as you go along
- Write a brief summary of the work you did at each sitting
- Give status updates on your progress to your client weekly or every few days using your recorded summaries as a guideline
- Ask for feedback and input on the decisions you are making (though exercise restraint, asking for feedback on every little detail will greatly slow you down)
- Tell your client when you are reaching the end of your allotted hours; warn them if you believe that the job will take longer than the designated amount of hours in the agreement
Unless you have a very good working relationship (i.e. long time customer / employer) with the other party, don't give your work away before you finish the job and receive your payment. See the how to protect yourself as a freelancer article for some more tips.
Collecting payment
Once you finish your work you should send a note to your client stating that the work is done. You should also give a slight hint about repayment and that you will exchange the final deliverables once you receive payment.
There are many ways to actually set up repayment. For example, some freelancers and contractors ask for 50% up front. Though it would be nice to receive half up front, I don't personally ask for it as I can imagine many people being uncomfortable with doing so (especially when I was just starting off).
Another option is "Net 30", "Net 45", etc. The 'Net' payment method means that the other party must repay the full amount within 30 days of you delivering your goods. This is often used for physical goods, where it is clear that one party has received goods and would be stealing if they did not repay. In a completely 'virtual' transaction (like delivering your work through an email attachment or hosting) it is not as clear, so I tend to stay away from this method.
Hopefully, if your client is responsible and timely they will send the payment right away once they have received your final invoice. After I receive the client's payment I will deliver the final product, oftentimes by uploading it directly to their web host.
That wraps up my tips on repayment. Make sure you spend the time to take the necessary precautions to ensure you will get paid. Nothing feels better than getting a big chunk of money after finishing up a job!