Consulting · Services

How do you ensure you get a payment for a project from your client?

Ishan Garg On a mission to build the biggest media on Blockchain technology.

February 14th, 2018

I have seen that sometimes while doing project the client backs out, changes their mind or basically become a pain in the ass. How do you handle such a situation? And how do you ensure that client pays up.

Nate Smith Founder of Enormous Elephant, Creative Director + Strategist, UX/UI Designer, and Voice Actor

February 14th, 2018

Firstly, depending on the scope of the project, always make sure you receive a payment up front, be it 50/33/25% for the work you will do to a point, and don't do any work with the promise of equity or back end payment. Cash is king, and if they can't pay you, you have to be willing to walk away.

Secondly, as it relates to the above, if you're a partner in a company, that's a different matter. Sweat equity is to be expected. However, if you're service based, the client needs to understand they owe you compensation for a service provided - and this should be clear as crystal in your MSA, along with what will happen if the agreement is not adhered to.

Outline deliverables, milestones and objectives clearly at the outset so as to set proper expectations for the client and yourself, and communicate clearly. If there is a discrepancy, then do what you can to talk with them and problem solve. If they become too much of a pain and you've exhausted what you can in keeping it copacetic, then you relinquish them as a client aka fire their a**. Plain and simple.

If it reaches a point of service provided and lack of payment and no intention of paying, well, what happens when your electric company sends you notice of payment needed with no response? Eventually you come home with no lights. Shut their service down.

There is value in what you do, and don't let anyone sell you short or tell you differently.

Hope this helps.

Kishore Swaminathan Serial entrepreneur looking for a cofounder

February 14th, 2018

Take a 5-10% deposit to start the work. Agree on 3 installments, each connected with the completion of a milestone and a final payment for extra scope, unexpected delays etc. This way, you don't start the next phase until you are paid for the previous phase. And if the client changes their mind half way through the project, you would have been compensated for most of the work you already performed.

Fred Cohen We help grow companies

February 15th, 2018

This goes to risk management. Depending on your position regarding the client, you have a wide range of billing options that affect cash flow as well as reliability of payment. This ranges from retainer-based work to partial and progress payments, to credit checks and payment terms, to credit limits, to contract terms and discounting strategies with timeliness discounts and penalties and interest for non-payment, to a legal collection strategy, etc.

A good CFO should understand these issues and include shrinkage based on the market and methodologies use. Get a good CFO...

Mazen Alahmadieh Marketer, social media expert, r&d

February 28th, 2018

Well as a client why would I trust someone who will ask for upfront , so asking for upfront is a risk as well as not giving the project at time since u have agreed for a timeline that if u exceeded u do not deserve a penny without mentioning quality or bugs . So do your job right and you'll costumer won't back out

Paul Garcia marketing exec & business advisor

February 28th, 2018

Project work can be tricky especially if you don't ever meet face to face, being continents away. Your contract needs to be well-constructed and mitigate risks in both directions. Whether there are installment payments that follow milestones, limits on changes to the scope of work, etc. all depends on what type of work you're doing and with whom. It's also helpful to understand why the client is seeking you as their service provider. If it's primarily a cost factor, you can expect money to always be an issue, and you can plan for that up front.

You'll feel better if you vet your customers as much as they put an effort into finding you. There's no reason you have to take less than Class A and B customers. Let the troublemaking C and D customers go to a competitor and slow them down. Make a recommendation to your competitor that you want to slow down as a method of getting away from deals that you have doubts will proceed smoothly.

Lalith Muthali CTO @ Sipher

March 1st, 2018

At Sipher, we always split the project cost into equal segments. 3-4 payments typically for a large projects and 2 payments for smaller projects. We never start a project without a contract or a down payment. Legitimate companies will sign the contract and pay. If a company doesn't want to then its a big red flag so proceed with caution or get rid of them.

Jeff Ramirez Founder of Kiloran Apparel, Former warehouse manager for Alliance Apparel

February 14th, 2018

Hey Ishan, For current projects, if you did not have some kind of order acknowledgment which you both agreed on, there is not much. If you can have them confirm you completed a project, task or job they are inclined to provide you some compensation fiat/itemized or just provide the project back to you. For future projects, an order acknowledgment where there is an agreement of the work to be done with recommended terms of purchase prior to the work you are set to do and having them sign the form so that you can have a contract. I am no lawyer but I believe you just need the date, the work to be performed and signatures of both parties to create this. Lay out project deadlines and be as transparent as possible - delays, updates, completion dates, etc. A huge plus is trademarking intellectual property such whether it's posting your project to a private folder with a time stamp or using lawyers to do so in case if someone does back out on their project but try and use an idea which you see is VERY similar to your project you can revert back to if it goes legal. Good luck! --

Sanket Thakkar We are offering Enterprise Mobile Integration with existing ERP, IoT and working on bigdata.

February 15th, 2018

Take a 10 or 20% deposit to start the work. Agree on 4 installments, each connected with the completion of a milestone and a final payment for extra scope, unexpected delays etc.

Milestone such as

1 conformation of project: 20%

2 Designing: 30%

3 Development: 30%

4 Testing: 20%

This is the one of the best best way where the work what you have done and get paid for that work. It will make win win situation from both end.

Rahul Asanikar Cofounder of Benchmark IT Solutions

February 14th, 2018

Explain the situation and ask to cover your losses. Define a clear deadline of further free work. If the client doesn’t care about your profitability, find a new one.

Precautions and next steps.

1. Clearly defined process of requirements definition And milestone based payment.

2. Change billing model to Resource billing.

Adaramati Tobiloba Consultant

Last updated on February 15th, 2018

Hello Ishan, I am a freelancer so I understand what you mean. You can ensure your client pays at least 30% of the project cost before you begin. You should also develop a refund policy so your client understands what is and isn’t refundable should there be a breach