Markel Direct
IPSE have partnered with Markel Direct, a specialist insurer of contractors, freelancers, self-employed professionals and micro-businesses to offer a 10% discount* on contractor insurance to IPSE members.
For businesses of all sizes, cash is king. For freelance businesses, where the number of projects you have often peaks and troughs, this is especially true. It only takes one difficult client off-putting payment to leave you struggling to cover your bills. Sadly, late payments and unpaid invoices are commonly experienced by self-employed professionals.
In this article, Markel Direct will explain why including milestones payments in your freelance contracts could be a great solution and how to implement them.
For many freelancers, once they have won the work, they agree with the client to be paid once the work is delivered. This can result in situations where after several weeks of hard work to deliver the project, or at least some stages, the freelancer does not receive any payment for their efforts.
While you can never be completely sure of how reliable a client will be, there are ways to reduce the chances of late and unreceived payments. Through milestone payments, you can guarantee more tie-in from your clients to help ensure you get paid for your work.
Before considering a milestone payment method, arguably the most important factor with every single project you undertake is to have a contract in place that is signed by both you and your client.
In the contract, you can confirm quoting methods – for example whether you’re being paid hourly or whether you’re charging a set amount for the whole project, your rates and when you will be paid.
Providing that you’ve included all the necessary clauses in your contract, if a client doesn’t pay you on time, you can take legal action against them.
For more tips on drafting robust contracts, read our article five common contractual mistakes and how to avoid them here.
Implementing a milestone payments structure can be of benefit to both you and your client.
Structuring the payment terms for a project can ensure you receive payment and help your client to keep a vested interest in the project’s success. It can also help keep your cash flow strong and benefit your client by breaking down the fee into smaller manageable payments.
Below is an example of how you could structure the milestone payments:
An example milestone structure for a freelance graphic designer could include the following steps:
When working on projects, especially big projects, they can take a long time to complete and leave you feeling overwhelmed. If you are not careful, creative block and a lack of motivation can also creep in. With milestone payments, you can use money as your motivator to get stages of the project completed.
If you are hesitant about working with contracts, and nervous about suggesting them to your clients, remember that they are beneficial to your clients too. Staged payments will help both yours and your clients’ cash-flow.
At each stage you’ll be able to maintain regular contact too with your clients which will reassure them on the progress of the project and help you remain on target to meet the deadline.
As an IPSE member, you can enjoy a 10% discount* on professional indemnity insurance from Markel Direct. Get a quote here.
*IPSE 10% member discount terms and conditions
The discount will be applied to the net policy premium before insurance premium tax is applied. All quotations provided will be subject to meeting underwriting and claims criteria acceptance. All cover will be subject to full policy terms and conditions which are available upon request.
IPSE have partnered with Markel Direct, a specialist insurer of contractors, freelancers, self-employed professionals and micro-businesses to offer a 10% discount* on contractor insurance to IPSE members.
Up to 69% off the public price for IPSE members to access legal DIY templates and guides from Markel Law
From the initial gentle reminder letter through to the final demand letter, use these email templates to chase a client who is late to make payment.
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