5 ms·

Good to see, even if it doesn't impact me. I like the idea of penalties for non-payment. I've never had a problem collecting $5,000, but people will regularly

by bluetwo 10y ago

Good to see, even if it doesn't impact me. I like the idea of penalties for non-payment. I've never had a problem collecting $5,000, but people will regularly avoid paying small amounts ($500) because (I assume) they know you won't put as much effort into collecting.

devoply 10y ago
If you are collecting 5k at a time, you are doing it wrong. Your client should not be holding more than 1,000 of your money at a time.
- blhack 10y ago
  $1000 is what a well paid software consultant makes in about a day. I can't think of a single person that does daily payments for consulting, and I feel like this would be a huge red flag if they asked for it.
  - devoply 10y ago
    That's a very small portion of the market.
    - Justin_K 10y ago
      You aren't charging enough.
      - devoply 10y ago
        I am not talking about me, we are talking about freelancers in general. That's a huge market filled significantly with the lower end.
- tptacek 10y ago
  Serious consultancies routinely have 6-7 figure receivables from individual clients. Why should indie consultants handicap themselves?
  - enraged_camel 10y ago
    We are a "serious consultancy." The only clients we have large figure receivables with are long-term clients our owner has a personal relationship with. All other clients (over 90% of them) are billed immediately and all bills are due in 30 days. At the end of the day it's a matter of how much risk you can afford. I would never hold it against a freelancer if they wanted to get paid right away.
    - morgante 10y ago
      What do you mean by "billed immediately?" $5,000 is maybe a week of work. I'm generally not billing more than once a week.
      - enraged_camel 10y ago
        It depends on the terms of payment. For example, for some of our projects we collect 50% of payment upfront and 50% upon project completion. The client is "billed immediately" at those times. We also have "open-ended" projects where the client can use our services on an ad-hoc (as opposed to per project) basis. For those, we bill the client once a month, on the last day of the month.
        tptacek 10y ago
        In high-dollar consulting, up-front payment is a super weird term. Friends and acquaintances ask me for sanity checks on bids and pricing and deal structure all the time. If I ever see "pay me up front", I red-flag. If you're dealing with a client where you feel you really need a safety deposit, that's a sign from the universe that they shouldn't be your client. Do what you need to when you're just getting started, I get it. But try to move away from the kind of work where you get paid half up front, as soon as you can.
        morgante 10y ago
        I disagree. Most of my clients pay each milestone upfront (they pay for the first milestone before work begins). Gigster has also built a pretty sizable business with this payment model.
patio11 10y ago
I think this is part of my pathological customers thesis: you won't simply have more headaches at $500 than $5k because the customers are more evil about $500 invoices. You'll have more problems because _people who get into $500 consulting relationships are disproportionately flakes_. You get less flaky behavior from your $5k clients because people who buy $5k services are disproportionately not flakes; the $5k sticker price is kryptonite to flakes. Bargain-seeking consulting consumers have irrational expectations for what $500 buys them. The $500 is likely coming out of a personal pocket or a pocket which they treat as personal, not out of a Budget which gets handled like an honest-to-God business. They are disproportionately likely to have overcommitted that $500 -- it's perhaps not their last $500, but your invoice is sitting with a number of other invoices and it may not be possible to settle them all simultaneously. Many of my consulting friends move up-market and find that up-market consists of businesses run by disproportionately mentally healthy people who disproportionately have money in the bank and disproportionately conduct themselves with professional mien like paying invoices in a fashion that suggests their company has paid an invoice before.
- bluetwo 10y ago
  Interesting perspective. Thanks for sharing.

by bluetwo 10y ago

devoply 10y ago

If you are collecting 5k at a time, you are doing it wrong. Your client should not be holding more than 1,000 of your money at a time.

blhack 10y ago
$1000 is what a well paid software consultant makes in about a day. I can't think of a single person that does daily payments for consulting, and I feel like this would be a huge red flag if they asked for it.
- devoply 10y ago
  That's a very small portion of the market.
  - Justin_K 10y ago
    You aren't charging enough.
    - devoply 10y ago
      I am not talking about me, we are talking about freelancers in general. That's a huge market filled significantly with the lower end.
tptacek 10y ago
Serious consultancies routinely have 6-7 figure receivables from individual clients. Why should indie consultants handicap themselves?
- enraged_camel 10y ago
  We are a "serious consultancy." The only clients we have large figure receivables with are long-term clients our owner has a personal relationship with. All other clients (over 90% of them) are billed immediately and all bills are due in 30 days. At the end of the day it's a matter of how much risk you can afford. I would never hold it against a freelancer if they wanted to get paid right away.
  - morgante 10y ago
    What do you mean by "billed immediately?" $5,000 is maybe a week of work. I'm generally not billing more than once a week.
    - enraged_camel 10y ago
      It depends on the terms of payment. For example, for some of our projects we collect 50% of payment upfront and 50% upon project completion. The client is "billed immediately" at those times. We also have "open-ended" projects where the client can use our services on an ad-hoc (as opposed to per project) basis. For those, we bill the client once a month, on the last day of the month.
      - tptacek 10y ago
        In high-dollar consulting, up-front payment is a super weird term. Friends and acquaintances ask me for sanity checks on bids and pricing and deal structure all the time. If I ever see "pay me up front", I red-flag. If you're dealing with a client where you feel you really need a safety deposit, that's a sign from the universe that they shouldn't be your client. Do what you need to when you're just getting started, I get it. But try to move away from the kind of work where you get paid half up front, as soon as you can.
        morgante 10y ago
        I disagree. Most of my clients pay each milestone upfront (they pay for the first milestone before work begins). Gigster has also built a pretty sizable business with this payment model.

patio11 10y ago

I think this is part of my pathological customers thesis: you won't simply have more headaches at $500 than $5k because the customers are more evil about $500 invoices. You'll have more problems because _people who get into $500 consulting relationships are disproportionately flakes_. You get less flaky behavior from your $5k clients because people who buy $5k services are disproportionately not flakes; the $5k sticker price is kryptonite to flakes. Bargain-seeking consulting consumers have irrational expectations for what $500 buys them. The $500 is likely coming out of a personal pocket or a pocket which they treat as personal, not out of a Budget which gets handled like an honest-to-God business. They are disproportionately likely to have overcommitted that $500 -- it's perhaps not their last $500, but your invoice is sitting with a number of other invoices and it may not be possible to settle them all simultaneously. Many of my consulting friends move up-market and find that up-market consists of businesses run by disproportionately mentally healthy people who disproportionately have money in the bank and disproportionately conduct themselves with professional mien like paying invoices in a fashion that suggests their company has paid an invoice before.

bluetwo 10y ago
Interesting perspective. Thanks for sharing.