How did you try to organize/split the payment structure of your projects?
I hope one of the answers is 50/50, that’s the standard model widely accepted in freelance industry. I also hope you didn't said “Free” or “Upon project completion.” If the first one is still makes sense in some situations and deserve separate discussion, the last one is simply unacceptable.
With a deep pain I can tell you about cases when I have to chase clients payments for already accomplished work.
Without sounding overly dramatic, I can confidently say that downpayment, atleast 50% is the simplest solution for both you and your client, to motivatie engagement in project process and cover all your initial investments needed to get started.
Downpayment should become an essential part of your project process. And trust me, the moment you decide to bypass your own system it will remind you why you shouldn’t do it.
Because clients can ask you to make an exception and he will come up with different reasons like: the accountant is on vacation, the funding cycle is off or “Everyone works with me like this.” All you need to do is politely, without complaint, explain that you understand and happy to kick off the project right after the downpazment is received.
After those words, the downpayment will magically appear in your account the very next day.
Personally, I’ve made exceptions for long-term trusted clients with whom I’ve built a solid relationship. But even in those cases, there’s always this uncomfortable feeling, like something might go wrong and it affect the relationship. It’s similar to that feeling when you lend money to a friend. You probably know what I mean.
Let me say it again and yes, I know I’m repeating myself, but this is more important than everything else in this letter combined. The moment you break your own system, something breaks. And that hurts both you and the client.
So, now that we’ve agreed that downpayment is a must - always, let’s look at what other options exist for structuring the rest of the payment, in a middle of the project.
Even the 50/50 model has its drawbacks, especially when the project is too large to split into just in two payments.
That’s where the second most popular structure comes in: 50/25/25.
You probably already see where I’m going with this. The idea is to tie payments to the key project milestones. The ones that reflect your workflow aswell as your client’s expectations.
Personally, I prefer the 50/25/25 model, but that’s due to nature of my projects, where the stages are clearly defined by my craft.
Here’s an example: say you’re creating a set of 10 illustrations for a website. As we’ve already agreed, you should take 50% upfront just to start, that’s non-negotiable.
With 10 illustrations, the process will likely begin with developing 2 full illustrations from start to finish. Once the style is approved, you can then sketch out the rest of the series in that style. That already justifies the initial 50% downpayment.
Once you’ve completed, let’s say, 5 fully colored illustrations, you can request the next 25% of the payment.
At the same time, final high-resolution files should only be delivered after the full payment has been made. This must be clearly stated in your signed agreement with the client.
That's why in the Liid.app this part is designed with exactly this functionality in mind, allowing you to define key project milestones, tie them to deadlines and budgets for each magor phase.
Plan your workflow, discuss it with the client if needed, write out the milestones with related fees and deadlines, and include it all in your proposal before the project begins.
A structured payment process shows your professionalism, gives the client clarity and peace of mind, and gives you the assurance of timely payments.
Sounds like something from a bank brochure, doesn’t it? :)
But it’s exactly what lets you focus on work delivering, which will certainly improve client satisfaction and take a big load of stress off your shoulders.
See you in the next letter,
Dmitry.
I hope one of the answers is 50/50, that’s the standard model widely accepted in freelance industry. I also hope you didn't said “Free” or “Upon project completion.” If the first one is still makes sense in some situations and deserve separate discussion, the last one is simply unacceptable.
With a deep pain I can tell you about cases when I have to chase clients payments for already accomplished work.
Without sounding overly dramatic, I can confidently say that downpayment, atleast 50% is the simplest solution for both you and your client, to motivatie engagement in project process and cover all your initial investments needed to get started.
Downpayment should become an essential part of your project process. And trust me, the moment you decide to bypass your own system it will remind you why you shouldn’t do it.
Because clients can ask you to make an exception and he will come up with different reasons like: the accountant is on vacation, the funding cycle is off or “Everyone works with me like this.” All you need to do is politely, without complaint, explain that you understand and happy to kick off the project right after the downpazment is received.
After those words, the downpayment will magically appear in your account the very next day.
Personally, I’ve made exceptions for long-term trusted clients with whom I’ve built a solid relationship. But even in those cases, there’s always this uncomfortable feeling, like something might go wrong and it affect the relationship. It’s similar to that feeling when you lend money to a friend. You probably know what I mean.
Let me say it again and yes, I know I’m repeating myself, but this is more important than everything else in this letter combined. The moment you break your own system, something breaks. And that hurts both you and the client.
So, now that we’ve agreed that downpayment is a must - always, let’s look at what other options exist for structuring the rest of the payment, in a middle of the project.
Even the 50/50 model has its drawbacks, especially when the project is too large to split into just in two payments.
That’s where the second most popular structure comes in: 50/25/25.
You probably already see where I’m going with this. The idea is to tie payments to the key project milestones. The ones that reflect your workflow aswell as your client’s expectations.
Personally, I prefer the 50/25/25 model, but that’s due to nature of my projects, where the stages are clearly defined by my craft.
Here’s an example: say you’re creating a set of 10 illustrations for a website. As we’ve already agreed, you should take 50% upfront just to start, that’s non-negotiable.
With 10 illustrations, the process will likely begin with developing 2 full illustrations from start to finish. Once the style is approved, you can then sketch out the rest of the series in that style. That already justifies the initial 50% downpayment.
Once you’ve completed, let’s say, 5 fully colored illustrations, you can request the next 25% of the payment.
At the same time, final high-resolution files should only be delivered after the full payment has been made. This must be clearly stated in your signed agreement with the client.
That's why in the Liid.app this part is designed with exactly this functionality in mind, allowing you to define key project milestones, tie them to deadlines and budgets for each magor phase.
Plan your workflow, discuss it with the client if needed, write out the milestones with related fees and deadlines, and include it all in your proposal before the project begins.
A structured payment process shows your professionalism, gives the client clarity and peace of mind, and gives you the assurance of timely payments.
Sounds like something from a bank brochure, doesn’t it? :)
But it’s exactly what lets you focus on work delivering, which will certainly improve client satisfaction and take a big load of stress off your shoulders.
See you in the next letter,
Dmitry.
