The Freelance Contract — Is It Necessary?

Penmanship, Pen, Signature, Document

Let’s talk about contracts. Which, by the way, is directly linked to being paid fairly and on time. A question I suspect many freelancers ask themselves is, “Do I need a contract?” This is a question I am now asking myself after more than 14 years as a freelance writer.

For the first two-thirds or more of my career, I didn’t have a need for any contracts. I found pretty much all my clients via Upwork and its predecessor, Elance. I watched Elance grow from its early days, when there was no escrow and no payment support. The days when clients could hire you there and still pay via PayPal or another method. Obviously, this changed.

Platform Protection

Over time, Elance instituted tight control over the payments made by clients. Obviously,Binding Contract, Contract, Secure one motivation for this was so they could earn more in terms of taking a percentage of a freelancer’s income, but they also sought to protect freelancers and clients. Thus the escrow system Upwork uses was born.

When working within this system, there is no need for a contract because Upwork has it’s own conditions. For example, they hold the escrow for a flat-fee project. When a freelancer finishes their work and requests release of the funds, the client has two weeks to review, ask for revisions, and release the payment. In my opinion, two weeks is far too long, but it is  what it is.

If the client doesn’t release the funds within that two-week period, Upwork will automatically release them to the freelancer. This actually happened to me recently. Conveniently, my client, who has been a client for well over a year, got back to me saying that he got approval of the article from his team that evening. I’m now requesting that he release funds on first submission.

The Need for a Contract

Now that I am moving further and further outside the platform structure, I have to takeMeeting, Relationship, Business tighter control over my payment requirements. I already do this by requiring a 50% deposit and milestone payments for larger projects. But recently, I am beginning to see this isn’t enough.

Between three different clients, $3,000-$4,000 I expected to receive in December — a month we all need extra $$ — didn’t come until later. Much later. Some of it arrived in January and some is coming this month. Let me tell you, this hurt a LOT.

One client I have worked with off and on for five years or so. When we started, they would pay when the work was done. Then they shifted to paying out invoices twice a

month. Now, it appears, they have shifted to a 30-day net, which means getting paid 30 days from the date on the invoice. The first payment wasn’t made until 34 days, which was unacceptable. We’ll see how the other two payments go this month.

The second client is new, a business school at a large university. They were more flexible than I would have thought. They paid the 50% deposit by having me backdate the invoice. The project was to be done early December, but they had major delays at their end with gathering the required content for the report I was writing/designing. Thus, I wasn’t getting paid the remainder of the fee before the holidays.

I decided I wanted to be paid half the remaining balance, since the delay was at their end and I had done most of the design work and everything I could without the remaining content. I missed the payment window prior to the holidays, through no fault of my own. However, I did get the payment in the new year. Still waiting to finish that project.

Finally, a relatively new client postponed a project at the beginning of December, then decided we’d move forward. It’s now been over a month since I submitted the work to him and he still hasn’t reviewed it. He says January was busy and he’s going to rev

iew it tomorrow morning. Well, we all get busy. I was busy, but I still did the work for him. I sometimes think these people don’t realize this is our income, for some of us our ONLY income, what we actually rely on for rent/mortgage, food, utilities.

With all of this going on, I am now working on making up a contract to protect my income and cash flow.

The Contract

Essentially, my contract will outline the following:Conditions, Period

  • Rate of pay (per word or per hour)
  • Deposit requirements
  • Milestone breakdown
  • Delivery date
  • Payment of 50% of the balance owing, if the project gets delayed at their end (for more than one to two weeks)
  • Time requirements for the review of content/material (probably within 72 hours)
  • Penalty interest for late payments (payments due within 48 hours)

This is rough. I am working out the details and will draw up a solid contract based on the final requirements. This will go one step further to securing my income, and my cash flow. And it will hopefully go a long way to having clients treat my services and my time in a more professional manner.

What do you think? Have you had any experience with clients delaying projects or not paying on time? Please share your experience with us in the comments section. Let’s take control of our income!

Cheers, Karen

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