You’ve finally gotten the big project that you have been waiting for ─ congratulations! This is the dream of all freelancers.
Before you start and open the champaign to celebrate, let`s get realistic here for a minute.
Clients usually pay after the project is done. That can be a pain and a big problem, especially if you are counting on that money sooner.
And, if the project is really big, it could take a few months until you receive your payment.
Today, we will talk about having the right invoicing plan in place to avoid situations where you need to wait for your money.
Half and Half Payments
I always think that this is a win-win situation for both parties.
You will ask for half of the money that you have agreed upon upfront, and half when the project is done.
If you work on a huge project that will take months, this way of payment will make sure that you will not leave empty-handed even if the project gets canceled.
Also, it’s convenient for you that you will have a small, but secure, cash flow that will allow you to work on the project and still have money to live on.
Another option is that if the project is enormous, and it will take more than few months to finish, maybe you should set up a payment plan in stages.
If you expect that it will take a year to finish, then you can set up three or four invoice stages, one every few months. This way, you will not struggle with cash flow, and your client will see how the project evolves.
Have an Invoicing Schedule
We have talked about this many times; you need to have a pre-set invoicing schedule and stick to it.
You need to agree with clients on terms and conditions of your payment. As you create the statement of work, you want to set out the probable schedule so that your client knows approximately when they will have to pay you.
An invoicing schedule can also help you to plan your own work out so that you have deadlines to meet.
If your client has a billing cycle, make sure to invoice during that period. Otherwise, it will mean that you will have to wait for the next billing cycle.
No Payment Received
It happens. It may happen for any reason, as clients don`t have the money, or the project has stopped or they forgot, and so on.
If the client isn’t paying at the agreed-upon intervals, it’s okay to quit work. Let the client know that the timeline will be off when they fall behind in payment. This encourages the client to stay on top of things, as well.
Final Thoughts with Sighted
Being a freelancer is hard enough. You always need to chase after new clients, and when, finally, you score a big project, you need to make sure that you will be paid.
There are several other options on how to encourage clients to pay, and if you have read any of my articles, you should be familiar with how to do that.