Collecting Your Dues

November, 2001

Company Rep: “Fred, we could use your expertise on this upcoming project. We think it's something you would enjoy.”

Fred Freelancer: “My workload isn't too heavy, sure, tell me more.”

[snip]

FF: “Wow! That sounds really great. I'd love to be a part of this. I do have one more question though. How much will you be paying?”

CR: “I can't say for sure. But it will be something fair.”

March, 2002

CR: “The project was a great success. I talked to my higher-ups and they definitely want you on board for future projects. I reminded them you need to be paid.”

FF: “Great. Thanks.”

April, 2002

FF: “I'm sort of concerned that the project was completed a month ago and you still have not addressed payment for my work.”

Boss: “ Fred, I understand you worked on the project, but you never actually had an agreement with me personally regarding payment.”

FF: “That is true. But I spoke to your representative about it…”

Boss: “I was not aware of how much you contributed to this project. But that doesn't interest me anyway. I accept that you were a part of it, and I recognise that we owe you something. I appreciate the commitment you have shown to our company, and I definitely want you to be a part of the company's future. Of course before we move forward, we will have to settle those outstanding issues. But I am really busy and cannot focus on that right now. I will get back to you at a later date.”

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The Moral

What was Fred Freelancer thinking when he agreed to this project?

“Pickings are rather slim these days. I shouldn't let this get away. Plus it's exactly the sort of project I would like to be involved in and it'll be a great experience. And it doesn't hurt that I've worked with these guys before and I personally know the principals of the company.

“So what if they haven't finalised a figure as yet. I can trust them.”

Good faith, the love of the job, trust that one's commitment will be rewarded – admirable and noble philosophies in theory. Assuming and na�ve bases for business decisions.

How difficult do you think it was for Mr. Freelancer to raise questions about what he would be paid? After all, he doesn't want to nag anyone, or worse yet, give the impression that the money is all that matters.

It's too simple for many of us to think this way, trusting our own personal principles and ethics are common practice in the business world. For most of us, especially those just starting out in the business, web development is sheer nirvana. We seek nothing more than to bury ourselves behind our monitors and get to work. Meetings with clients go by in a haze as visions of HTML tags and CSS properties dance behind our eyes. That's how we forget to bring up the subject of compensation. Or some of us, fair-minded, trusting suckers that we are, assume that Mr. Client will actually pay us promptly and fairly when we deliver his website.

Not without an agreement, preferably a signed contract, he won't! And remember, once you deliver the finished goods to the client, you've got no bargaining power – except that contract. The one you agreed upon before you started work.

So what kind of payment terms should you seek? There are several options, and of course different situations have different requirements. These suggestions may help point you in the right direction.

1. Always agree on the figures before you commence work, or at the latest, no more than one week after this date. Notice, agree on the figures. Not vague promises like our friend, Fred.
2. In cases where the figures are based on an hourly rate, ensure that the client has a clear understanding of the scope of the project. An exact number, e.g. 10 hours, is not always a must. An educated estimate, e.g. 10-15 hours, will usually suffice. This ensures that there will be no unpleasant surprises for the client that may translate into ill will or mistrust. If you ever encounter a situation where your estimated hours are way off, inform the client immediately and clarify the situation.
3. If you are a freelancer, remember that your fees must not only cover development time. You need to cater for administrative tasks — attending meetings, corresponding with the client, invoicing, accounting, etc — and other incidental expenses.
4. Work out a reasonable schedule of payment. Yes, you will be paid $x,000 for the project. But does this mean you won't see a dime of it until it is completed? Or will you see 15% now, 85% on completion. Payments made in installments should be complemented on your side by deliverables supplied.
   
   Put yourself in the client's shoes. Which sounds better?
   
   
   “Pay me 10% now, 45% in a month, and the remaining 45% when it's done”
   
   or
   
   “A downpayment of 10%, 45% on acceptance of the site layout templates and artwork, and 45% upon approval of the finished project”
   
   

   Adjust the number of payment points and percentages paid to suit. Obviously more trustworthy or longstanding clients could be offered lower downpayment terms than newer, riskier business.

5. Provide the client with, and record for yourself, proper paperwork for all transactions — invoices, receipts, etc.

Remember, yes you may truly enjoy what you do, and the sense of completion may give you a warm fuzzy feeling inside. And you may accumulate vast tracts of good karma by being trusting and all that, but neither karma nor warm fuzzy feelings pay the bills. You are in business, and you deserve to be compensated for the services you render.

In short, it's your money. Do not be bashful about asking for it.