Freelancing Advice: A Unique Approach to Billing Clients

In: entrepreneur| running a business

8 Jul 2010

Freelancing is an odd thing. You decide that you have some skill or talent that people would be willing to pay for, so you make the choice to go into business for yourself (either full-time or part-time). But you quickly realize that to be successful, your one skill isn’t enough. You also need to focus on marketing, client relations, accounts receivable, project management and a whole slew of other areas in order to grow your business.

One of the first lessons I learned when starting out was to read everything you can find about freelancing. While there is definitely some questionable advice out there, it’s a good idea to consume as much information on the topic as possible. Recently I picked up a copy of The Wealthy Freelancer by Steve Slaunwhite, Pete Savage, and Ed Gandia. I’m working on a full review of the book, but they had a great suggestion I wanted to share now.

How to Bill Clients For Your Work
Deciding how and when to bill clients for your work is an important part of freelancing. You need to find a balance between being reasonable and protecting yourself from bad clients. The book outlines the following steps to striking this balance.

Step 1: Collecting a Deposit Before You Start
In the book, the authors talk about the importance of collecting a deposit before starting a new project. While some freelancers just starting out may feel awkward collecting money before they’ve done anything, this is a crucial step in making sure you aren’t left working for free. Also, when a client pays a deposit upfront, they are showing that they take the project seriously. Any hesitance regarding paying a deposit is a huge red flag and should make you think twice about working with someone. The authors suggest 50% to start. Personally, I sometimes collect a slightly lower amount depending on the job, but there isn’t any science behind this decision. It really just depends on what the freelancer is comfortable with.

Step 2: Collecting the Balance Upon INITIAL Delivery
Now this is where the book gets interesting. Instead of collecting the remaining balance upon final delivery of your work, the authors suggest billing the client for the outstanding amount upon INITIAL delivery of your work and giving them some set time period (30-45 days) to pay the invoice. This helps to ensure that they deliver any feedback or changes promptly and prevents projects from dragging on and on (something I like to call Final Approval Hell). This is definitely a novel approach and I have never met a freelancer who does it. But I might try it on several projects moving forward to see how it goes.

The Importance of Getting Paid
When you decide to freelance, you give up the predictability of a paycheck, so it’s important to create as much structure as possible around how you bill for your time and work. By setting these types of formal payment arrangements, you’ll not only provide yourself some much needed security, you’ll also encourage your clients to be on their best behavior.

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Mark Webster

About Mark Webster

One of the Co-Founders of SideTour, former TechStar (NYC Summer 2011), ex-NBA'er, and past TechCrunch Disrupt Hackathon Winner.