Have you heard of the mantra, “Freelance isn’t free?” Because you work outside of the traditional terms of employment, it’s important to clarify the freelance payment options for every project. Getting paid isn’t optional, and unlike other aspects of freelancer agreements, this component can directly affect your ability to support yourself financially.
During one $2,000 project, I got paid five months after I completed the work. I finished the project in November, but I didn’t receive the electronic transfer until April. Unfortunately, these experiences aren’t rare in the freelance world. But by setting up clear contracts and selecting the best freelance payment options for you, you can avoid these mix-ups.
For new — and experienced — independent contractors, picking a payment method can feel like a daunting process. Entrepreneur alone highlighted 25 different payment tools in their magazine. Rather than leaving it up to you to figure it out on your own, we’ve come prepared with the best ways to approach your payment options:
Adapt to Clients
Many lucrative clients have their own processes for paying independent contractors. When you land a prestigious account, you’ll need to adjust to their way of doing business — from project management to payment methods. This is particularly true of large organizations with extensive red tape. You’ve been warned: These big companies may take longer to pay you — and they’ll do so in their preferred way. To keep track of each client’s preferred payment method, I include the information in my project notes. If I can’t remember who pays me in which way, I can look it up before sending over an invoice.
If you have the opportunity, let your clients know which payment methods you prefer. Smaller companies often adapt to your payment method. After discussing my preferred option with clients, I include it in my contract with the expected payment time frame. For most projects, I prefer checks. While they may take more time to hit my bank account, no fees means I save a lot of revenue.
Explore Your Payment Options
Thanks to digital transactions, there are a ton of different ways to accept payment for freelance projects. Not all freelancers prefer checks — some would rather rely on the convenience of online payments. The most common methods for collecting revenue include:
If you’re just starting out as a freelancer, play around with different options to see which ones work best for you. Is your priority convenience or optimal savings? Do you want to find a happy medium? It’s hard to know until you’ve tried them out. Just note that every method, besides checks, is accompanied by fees. While these fees vary depending on how much business you do, one option may be less expensive than another.
Some freelancers manage fees by tacking them onto invoices for clients to pay. If you go this route, make sure you’re transparent about it with your clients from the beginning. You don’t want them to feel as though you’re charging extra without giving them a heads-up.
Feed Revenue Into a Single Account
The best way to manage multiple forms of payment? Have them all transfer into one shared account. Connecting a single business bank account to every payment channel will help you keep track of each transaction. When I receive an email from PayPal that I received a payment through their online system, I immediately transfer the money straight into my business bank account.
Although freelance payment options may seem complicated, they become clearer with practice. Soon, you’ll have a handle on each method and a sense for your favorite way to collect income as a freelancer. The most important factors are to know what you’re making and how to keep it all in the same place.