6 ms·

New Freelancer: Payment Terms

3 points by aaronogan 16y ago

I am a web dev with almost 8 years experience and recently started freelancing on the side. I have had my first client for about a month now, just doing some maintenance on a single site. I recently conducted a review on the code base for the site and came up with about 50-60 hours of enhancements. We originally agreed to work on an hourly basis and the expectation of about 5 hours of work per month. They agreed to pay me at the end of each month and they also thought some project work would come up. Today, they agreed to the enhancements I recommended. They want all the work completed as one deliverable, but are proposing that they pay for three line items as monthly maintenance (they are roughly 5 hours each) over the course of the next three months. All other items are to be paid as they are completed. Is this scenario considered standard practice? I have yet to receive payment for the first invoice, due on the 15th. I am a bit uncomfortable delivering without being paid for a month or two at a time. Advice is greatly appreciated!

CPops 16y ago
Did you get any payment up front?
- aaronogan 16y ago
  No, it was just an hourly arrangement until any project work came along, at which time we would re-evaluate.
andrewstuart 16y ago
Invoice weekly on 30 day payment terms. Offer a bug fix (not new feature) warranty that is conditional upon on time payment of invoices. One week prior to the invoice becoming due give your key contact a gentle reminder that a warranty is provided if the invoice is paid on time. 2 days prior to invoice being due, give them a personal phone call to gently remind them of this again, remind them that it is in their interests to have the warranty. However, you must negotiate and get signed agreement from the client before you commence work. You can't negotiate terms after you have started work for a client. Politely and without emotion let the client know that for practical reasons you can't do any work when invoices are outstanding. If such a circumstance actually comes up then politely but firmly remind them that you can't do any more with the invoices outstanding. Don't waver from this. You should write all this stuff up into your terms and conditions document which the client signs before you do any work for them. Never do any work without a signed agreement. You might want to post to HN asking if any other freelancers are willing to post their terms and conditions documents so you can see what others do. Get a lawyer to check your T&C's.
- aaronogan 16y ago
  I like your suggestions - is this something that you are already doing? Being such a low-volume project with a choppy work schedule, I think that monthly payment option that we agreed on can work well for this project. I would like to start working on some standard agreement documents, contracts, etc, but I feel like this current project is so small and low-margin (I probably low-balled myself; that's another story) that it's not really worth the effort of putting together in such a short time frame. Do you think all of this is necessary for about $200-300 worth of work per month?
  - andrewstuart 16y ago
    I would wonder if anything is worth it for $200 to $300 per month. For such a low volume I would ask for $1000 payment up front and that then gives them x hours to ask you to do stuff. Hardly worth getting out of bed for that little money. What are charging per hour and what sort of programming are you doing?
    - aaronogan 16y ago
      Yes, I see your point. I have a full-time job that pays well but also consumes a lot of my time, so this is just a side-project of mine. I can't provide great turn-around time, especially while I'm at work, so I thought that this project would be a quick way to build up a client base and get my feet wet in freelance. I agreed to $50/hr for this project. It's a community site developed in ASP.NET/C#/SQL and I'm sub-contracting, the end-client is a Fortune 500 company. They very cheaply outsourced the project and, not surprisingly, were left with some bad code.
aaronogan 16y ago
Rather than the complicated deal that he had proposed, I am thinking of offering a monthly retainer for three months. Any thoughts or other suggestions here?

3 points by aaronogan 16y ago

CPops 16y ago

Did you get any payment up front?

aaronogan 16y ago
No, it was just an hourly arrangement until any project work came along, at which time we would re-evaluate.

andrewstuart 16y ago

Invoice weekly on 30 day payment terms. Offer a bug fix (not new feature) warranty that is conditional upon on time payment of invoices. One week prior to the invoice becoming due give your key contact a gentle reminder that a warranty is provided if the invoice is paid on time. 2 days prior to invoice being due, give them a personal phone call to gently remind them of this again, remind them that it is in their interests to have the warranty. However, you must negotiate and get signed agreement from the client before you commence work. You can't negotiate terms after you have started work for a client. Politely and without emotion let the client know that for practical reasons you can't do any work when invoices are outstanding. If such a circumstance actually comes up then politely but firmly remind them that you can't do any more with the invoices outstanding. Don't waver from this. You should write all this stuff up into your terms and conditions document which the client signs before you do any work for them. Never do any work without a signed agreement. You might want to post to HN asking if any other freelancers are willing to post their terms and conditions documents so you can see what others do. Get a lawyer to check your T&C's.

aaronogan 16y ago
I like your suggestions - is this something that you are already doing? Being such a low-volume project with a choppy work schedule, I think that monthly payment option that we agreed on can work well for this project. I would like to start working on some standard agreement documents, contracts, etc, but I feel like this current project is so small and low-margin (I probably low-balled myself; that's another story) that it's not really worth the effort of putting together in such a short time frame. Do you think all of this is necessary for about $200-300 worth of work per month?
- andrewstuart 16y ago
  I would wonder if anything is worth it for $200 to $300 per month. For such a low volume I would ask for $1000 payment up front and that then gives them x hours to ask you to do stuff. Hardly worth getting out of bed for that little money. What are charging per hour and what sort of programming are you doing?
  - aaronogan 16y ago
    Yes, I see your point. I have a full-time job that pays well but also consumes a lot of my time, so this is just a side-project of mine. I can't provide great turn-around time, especially while I'm at work, so I thought that this project would be a quick way to build up a client base and get my feet wet in freelance. I agreed to $50/hr for this project. It's a community site developed in ASP.NET/C#/SQL and I'm sub-contracting, the end-client is a Fortune 500 company. They very cheaply outsourced the project and, not surprisingly, were left with some bad code.

aaronogan 16y ago

Rather than the complicated deal that he had proposed, I am thinking of offering a monthly retainer for three months. Any thoughts or other suggestions here?