Tired of not getting paid? All freelancers at one time or another have completed a project for a client, only for that client to then disappear without paying. It hurts both financially and emotionally, especially if you’re just starting out in your career.
Thankfully there’s a good way to avoid these types of unscrupulous client. By asking for an upfront payment before work begins with new clients, you ensure you’re entering the working relationship from a position of strength.
Let’s explore some of the ways a pre-work upfront deposit can make your life easier as a freelancer or business owner.
Acts as a New Client Litmus Test
Pre-work deposits act as a litmus test with new clients. While some clients may not be familiar with freelancing down payments, a good client will understand with a little explanation and assurances that it’s standard practice.
If a client is not keen on paying a deposit and wants you to do all the work first before full payment, then warning bells should be ringing. Without a very good reason, their determination not to pay up-front could be a sign of not intending to pay at all.
Getting an up-front deposit paid before you do any work ensures you weed out potential clients who have unprofessional motives when it comes to payment.
Manages Client Expectations
Many clients expect to pay a pre-work deposit invoice. They’ve worked with freelancers and small business owners before and so are accustomed to down payments. They might even do the same themselves in their own line of work.
So when a new freelancer doesn’t demand an upfront deposit, they may potentially begin to wonder why. This can lead to concerns over the freelancer’s experience and aptitude.
By asking for a deposit, you show your new client you’re an experienced and confident freelancer in-tune with industry norms. This allays any doubts they had and places you firmly as an equal in their minds.
Keeps Your Client Engaged
When a business has already spent 25% or 50% of the project fee, they’re more likely to be actively engaged with you on the project. They’ve invested money already and will want to quickly answer your questions, help you with any information you need, and generally be on hand as the project progresses.
When they haven’t yet invested money, there can be a tendency for some businesses to delay and be less focused, even with the best of intentions.
Obtaining a pre-work deposit will help things run more smoothly and quickly. It will allow you to get the attention and focus you need from your client in order to get their project completed on time.
Avoids the Famine
The feast and famine cycle is a well-worn cliché – and reality – among freelancers. One month you can be working hard and receiving a lot of payments, and the next, nothing.
For new freelancers, the famine periods can be very difficult, especially if projects might take months to complete. Money worries can be debilitating and have a negative impact on the quality of your work and health (often causing burnout), so it’s important to be paid in regular cycles.
That’s why asking for an upfront payment can ease financial pressures in the short-term, allow you to pay the bills, and help you focus on doing your best work.
When Not to Ask for a Deposit
There are some occasions where an upfront deposit might either be inappropriate or nonessential. These include:
- New project work for a long-term and trustworthy client. When a business you work with has a proven track record of paying on time and they’re an established business not facing financial problems, then a deposit might be seen as unneeded.
- Small fee projects. Getting a deposit for a quick and tiny project costing less than $100 might be pointless. In the time it takes to receive the miniscule deposit you could have completed the project already.
- Project work for huge well-known companies. With Fortune 500-type companies it’s safe to assume they will pay. Also, the larger and more bureaucratic the company, the more difficult it can be for them to pay a deposit quickly before a fast approaching deadline.
What to Do If a New Client Doesn’t Want to Pay a Deposit?
If a client you really want is balking at the idea of paying a deposit, it’s important to remain calm. Explain to them the reason as a freelancer you require a pre-work partial payment. Tell them you require this for all new clients, as do most other freelancers they’ll come across.
When an unreasonable client promises to pay the full amount only at the end of the project or argues against deposits, then politely point them to your payment terms. It’s imperative not to back down because a client unwilling to pay a deposit is likely to be unwilling to pay you at all.
How to Create a Deposit Invoice
With Invoice Ninja, you can ask for a deposit and then a final payment using just one invoice. This means you get paid not once, but twice, with just one document, without any extra effort when sending the final invoice.
When the deposit has been paid, the invoice is automatically updated to reflect the partial payment. The customer is then send a final invoice only for the outstanding amount.
It’s very quick and simple to set up with our easy-to-use invoice system. Create a new invoice, then enter the amount required as a deposit in the ‘Partial/Deposit’ field, just beneath the Due Date field. Save, send, and the rest is updated automatically. Sending pre-work deposit invoices has really never been easier.
Try out Invoice Ninja today and explore the many other great features we provide our customers.