While freelancing can often be an unstable way to make a living, there are ways of making it more secure.
Asking for payment in advance is one of the best ways to increase the chance of financial security as part of your freelance operations. Running the risk of not getting paid as a freelancer can be incredibly detrimental, and seeking payment through legal means can be both costly and tiresome.
In this article, I look at why it can be a good idea to ask for a payment, either in part or full, before doing work for a client.
Why should ask for part or full pre-payment upfront when starting a freelance project?
It helps to maintain cash flow
This is especially relevant with big projects, where, in some cases, it simply isn’t practical to wait months for payment.
A steady cash flow is necessary for most people to pay rent and bills, and going for long periods of time without any income can be crippling. It keeps your bank account happy and takes the stress off of what can already be a very stressful career choice… so do what you can to get as much upfront as possible!
It also lowers the risk of not being paid; having all your eggs in one basket could be very dangerous – working on a single project for a long time to then have a client avoid payment could be more than just slightly annoying.
Building a foundation of trust
Asking for payment in advance is primarily something that’s necessary with new clients.
They may have a good reputation, seem friendly, and have a slick website, but until you’ve completed an assignment for them and been paid, you have nothing to back up that appearance of outward legitimacy. Being paid in advance shows they’re serious about hiring you for your service.
If they aren’t happy with paying in advance, it should be considered a red flag – if their reasons for not wanting to pay aren’t convincing, consider walking away.
Advances are common occurrences in the freelance industry, so it shouldn’t be surprising that you’re asking for one.
How much should you request?
Whether or not you request payment of the full amount or just a deposit depends on the size of the project. If all that’s required is a day or so of work, it might be appropriate to ask for the full amount.
If it’s a sizable project, you may want to ask for a deposit set at a certain percentage of the total cost. If the project is in multiple parts, you could ask for payment after each part is submitted – that way, both parties receive assurances that they aren’t going to get burned and left out of pocket.
Ultimately, if the client was never going to pay in the first place, then it’s unlikely they’ll agree to reasonable terms like this. It can be tempting just to waive your contracts (please have contracts in place) and just try to please a potential client but don’t forego your processes to take the risk of a non-payment.
In my SEO and digital marketing freelance life, I’ve found that those who don’t want to pre-pay or agree to specific terms are not the types of clients that would ever pay to begin with.
There are so many legitimate clients out there, so even though it feels like you’re leaving money on the table, the chances are that without contracts and terms in place, you would probably never receive that money in the first place!
When not to ask
There are also situations where it isn’t appropriate or necessary to ask for payment in advance. With big companies that have a sizeable reputation, such as Apple or Barclays, payment is more or less guaranteed.
Very small projects are also often not worth the hassle – if the work will only take you an hour or so, not getting paid is hardly the end of the world.
If you have a good working relationship with a client and know that they pay in good time, then trust shouldn’t be an issue, and prepayment shouldn’t be necessary.
Again though, if you feel that an invoice has simply been missed or you’re worried about getting paid regardless of organisation size (some of the larger ones can be worse than the small businesses!), then it’s always worth dropping a message.
You shouldn’t feel bad about asking for the money you are rightly owed, regardless of how hostile a client might be, if you’re worried that asking may dampen the chances of working with them in the future. Plus, if they react with hostility, chances are they’re not the type of client you want to be working with to begin with….