What are payment terms and why are they important for freelancers?
Payment terms refer to the agreed-upon conditions between a freelancer and their client regarding when and how payment will be made for services rendered. These terms typically include the payment amount, due date, and method of payment.
Payment terms are important for freelancers because they help ensure that they are paid in a timely and consistent manner. By establishing clear payment terms upfront, freelancers can avoid misunderstandings and disputes with clients over payment.
What are some common payment terms for freelancers?
Some common payment terms for freelancers include:
- Net 30: Payment is due 30 days after the invoice date.
- Net 60: Payment is due 60 days after the invoice date.
- Net 90: Payment is due 90 days after the invoice date.
- Upfront payment: The client pays the full amount upfront before work begins.
- Retainer: The client pays a set amount upfront to secure the freelancer's services for a specified period of time.
How can freelancers ensure they get paid on time?
Freelancers can take several steps to ensure they get paid on time:
- Establish clear payment terms upfront and include them in the contract.
- Send invoices promptly and follow up with clients if payment is not received by the due date.
- Consider offering a discount for early payment to incentivize clients to pay on time.
- Use a payment platform that offers automatic payment reminders and late fees.
- Consider requiring a deposit or partial payment upfront for larger projects.
What should freelancers do if a client doesn't pay on time?
If a client doesn't pay on time, freelancers should first follow up with a friendly reminder and inquire about the status of the payment. If the client still does not pay, the freelancer may need to escalate the issue by sending a formal demand letter or engaging a collections agency. In some cases, legal action may be necessary to recover the payment.
Nick Simpson
Founder @ WorkMade
I started working for myself at 9. My first tax bill showed up at 14. I didn’t understand it, and nobody around me could really explain it. If you’ve been there, you get it. Twenty years later, after creative directing for brands in New York and buying and selling a few companies, I kept seeing the same thing: smart, talented people losing money to a system that wasn’t built for how they work. That’s why I built WorkMade. Not to make taxes “easier to understand” but to make them disappear into the background, so you can get on with your life.