Comments on: Scheduling work and taking deposits?

By: Larimar Earrings

Larimar Earrings — Mon, 23 Nov 2009 01:29:40 +0000

Nice. I like the advice. One thing I would say though is: Don’t take work when you’re not qualified (not to the blog owner, but to the public). The thing that kills me is that every client that comes my way says “Oh, I don’t have that kind of money. I already spent 3500 dollars on developer X and got nothing in return.” I then have to explain that if 3500 got you screwed over, then surely you don’t expect any better for less money. The only reason I bring this up is that the “Let’s take a deposit now and worry about getting to it later” mentality is similar to the “Let’s take the contract now and worry about if we have the skills to do it later” attitude.

By: Angeletti Group

Angeletti Group — Thu, 08 Oct 2009 18:06:49 +0000

I would always charge a deposit up front, and hold their money in an interest bearing account until the start of the project. Then, if they decided to pull the plug, I’d say “OK, here’s your money” and be the hero who didn’t keep their deposit. This way three awesome things happen:

1) You most likely secure the work
2) You earn interest on their money (or even day trade it in your TD Ameritrade account LOL)
3) You get to be a philanthropist and give back their money if they want to wine about it

By: Iestyn

Iestyn — Sat, 26 Sep 2009 19:35:03 +0000

Thanks for the info on 24ways.org, I’ll check it out.
Another issue I have no clue what to do with is that on my invoices I state that the amount due should be paid within 14 days, what can I do if people don’t pay within the 14 days? I’ve heard that some people charge a percentage of the total if payment is late. Does this work? What does everyone else do?

By: Phil Matthews

Phil Matthews — Fri, 25 Sep 2009 21:43:13 +0000

Great post Ryan and lot of interesting comments.

For the first 3 years of freelancing full-time I didn’t charge a deposit (crazy, I know!). I was very naive and assumed all clients were lovely and would pay up in the end. Then, out of the blue, I had a non-paying client which made me realise how stupid I’d been. I’m pleased to say I now charge 50% before commencing work and 50% at the end and it has made such a big improvement to my workflow and security in general.

When it comes to booking in work I really need to work on how I do this. I’ve been reluctant to book in work ahead of time because I didn’t think clients would want to pay a deposit if they would have to wait several weeks before I could commence work. However, since reading the comments on this post it seems people have success with this method I am going to give it a go. At the moment I try to start too many jobs at the same time which can often lead to burnout and too many late nights.

Booking jobs in advanced is something I really want to try more (as long as I can convince the clients to secure my time with a deposit). Relly sums it up well:

“If you haven’t got 50% now then come back to me when you have, but I won’t hold a booking and reserve the right to fill it, cos I gotta eat!”

By: Paul Burton

Paul Burton — Fri, 25 Sep 2009 20:08:51 +0000

At a bare minimum, 50% down to initiate the project and 50% upon completion. Work does not begin until I have a signed contract and have received the down payment.

If you are in the fortunate position of having to schedule work, then a non-refundable 25% down payment to “hold” the booking is absolutely fair. Think of it as a dual purpose fee 1) it reserves your time and 2) serves as a cancellation fee (or, “kill fee”).

Keep in mind that clients do change their minds. When you book a project, you are committing a specific amount of your time to a specific client. This means that the time you set aside for client A will prevent you from taking too much work from client B. If client A pulls his project at the last moment, the time you had set aside for his work becomes available. Without a cancellation fee, you will not only have lost the income from the project that was pulled, but you will have lost the project you could have taken instead. Very rarely will you find yourself with so much potential work that projects simply fall magically into vacancies in your schedule.

Your time is valuable.

By: Jason Klug

Jason Klug — Fri, 25 Sep 2009 16:35:05 +0000

My life has been made a lot easier since I started taking 50% upfront and 50% within a week of delivery (I host most of the sites I develop, so “handing files over” before final payment is less risky).

Mostly, I just don’t like having to track multiple payments vs. deliverable benchmarks… I have enough work that I don’t want to waste time on extra business administration.

In the last month I’ve begun taking 25% refundable deposits if the client books more than 45 days in advance (then the 25% upon start of work, and the usual 50% just after delivery). I really like the idea of having a non-refundable portion of that early-booking deposit X number of days before the scheduled start… I haven’t run into a situation yet where that would apply, but it offers some good peace of mind and I’m pretty sure clients would understand (after all, other professionals take deposits, and there has to be some kind of penalty for backing out at the last minute… otherwise, what does holding onto the deposit do?).

Really glad you wrote this post! It’s good to talk biz admin once in a while, and get a feel for what’s working / not working for others.

By: Ryan Taylor

Ryan Taylor — Fri, 25 Sep 2009 15:22:54 +0000

@lestyn: You’ve been lucky to not get stung if you’ve never taken a deposit or signed a contract after 9 years! I think it’s fine to start invoicing your long term clients for deposits just explain to them why you are doing it and that now it’s your policy to do so, they should understand you situation.

As for a contact have a look at Andy Clarke: http://24ways.org/2008/contract-killer

Good place to start.

By: Iestyn

Iestyn — Fri, 25 Sep 2009 15:18:28 +0000

I am yet to start taking deposits, but really feel the need to start incase clients turn around and decide that my services aren’t required.
Should I ask for deposits off my current longterm clients or leave as is?
I have never even asked for any client to sign a contract, I’ve been freelancing for 9 years now!
Can anyone point me in the direction of a contract example I could base mine on?
Thanks

By: Ben Bodien

Ben Bodien — Fri, 25 Sep 2009 14:55:53 +0000

To clarify Re: Elliot’s point about 50%, I meant take 25% on contract signing to secure the slot in the calendar, then you can take another 25% on commencement so you’re still getting your 50% upfront.

By: Ryan Taylor

Ryan Taylor — Fri, 25 Sep 2009 14:52:57 +0000

@Tim: I currently take 25% deposit, 25% at design sign off (which is written into my contract that even if the client isn’t happy with the design after 2 iterations, they must still pay before ceasing the project) and then 50% on completion before the site goes live. So far this has worked well.

@Relly: That’s the thing isn’t it, bills need paying, food needs to be put on the table. I am considering altering my payment schedule to 50% deposit, 50% completion after all the responses here.

@Si: Hmmm… Now you’ve got me thinking the other way, the plus site of my currently method 25%/25%/50% is it’s a couple of relatively small payments to start followed by a larger one. Your reference to time slippage though I think can be better avoided by leaving small gaps between project as @Relly does. This can be used for admin, or smaller jobs if circumstances dictate.

@Tim Carr: I’m inclined to agree with all that you’ve said. The best clients are the ones that are eager to secure your time, pay their invoices so that you can get on with the job and reply to your e-mails in a timely manner, it’s obvious who the good clients are when you start talking money. Thanks for the advice.