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Who decides payment terms – freelancer or client?

Payment terms are the relevant section of the service contract between the talent and the client that defines how and when talents get paid. As a freelancer, you must ensure you get your payment on time and protect yourself against any possible delays in order to avoid future financial problems.

Who sets the payment terms?

In a usual freelancer-client agreement the freelancer usually sets payment terms, but these terms can be negotiated with the client. When choosing payment terms, you should consider:

  • how much resources that you will spend on the job
  • how long the project will likely take

If you think that a job will take longer or be costlier to complete, it may be worth negotiating a higher pay rate than your usual standard rates. As a freelancer, writing up a contract that sets realistic terms and clauses is one of your responsibilities. A carefully crafted contract will allow you to budget your time and money more efficiently.

How can you set the payment terms for your freelance work?

By arranging a meeting  before the contract is signed, you can discuss your payment terms with your client in detail. In this meeting, you can decide on a deposit as a security, or discuss how fees will be calculated according to the project. For starters, you can check out Ruul’s legal contract and service agreement templates and customize them according to your needs. You can also start by learning payment terms crucial for freelancers to get up to speed.

If you are an employer or client, when approaching a new freelancer for your next project, you must let freelancers know precisely how you want to compensate them for their work. Determining the payment terms correctly is an integral part of getting things done in the freelance world.

Can the clients have payment terms?

Clients can propose payment terms, but such terms are only enforceable if they are agreed in writing before the gigs or projects are done. Terms can include the method of payment or a specific deadline, as well as an action course decided by all the parties. Remember that it’s essential to get these terms in writing to avoid confusion later.

To avoid any last-minute disagreements, make sure you are completely on the same page about all issues regarding payment before you begin working together. By the time you complete a project you probably will become more familiar with the client and their style of work, but securing your income must come first.

Be reasonable in your payment terms, so everybody wins.

Both parties must be reasonable when deciding on payment terms. The best rule of thumb is to be fair to the needs and expectations of both the client and the freelancer. Expecting freelancers to wait three months to be paid will be considered unacceptable by many solo professionals. Similarly, as a freelancer, demanding the whole payment before the project is completely finished  may lead to disagreements with the client.

Should you add late payment fees to your contract?

The good news is that most clients will pay you on time. However, expecting a perfect payment history from every client would be unrealistic. If you’re a freelancer, there aren’t many issues that stand out as more distressing than the fear of your clients not paying their invoices on time.

After all, when you create a product or offer a service, you invoice your client and, in most cases, expect payment within 30 days. Sometimes, however, clients may not follow this agreement, and it may take longer before they pay you. In order to prevent a loss of income from these delays, all talents should add a late payment fee clause to their agreements.

The importance of making a bullet-proof contract

Written contracts are one of the legal ways for freelancers to protect themselves. A contract solidifies everything you agreed upon with your client and puts both of you in a legal agreement. The key is to put together something both parties completely agree on and feel comfortable with.

You and the client should be on the same page concerning the core terms of the contract, like what kind of work you’ll do, how many revisions you’ll accept, deadlines, payment plan, etc.

If you want to always be one step ahead and avoid financial issues with your solo career, keep an eye out on the Ruul Blog for articles on how to perfectly manage finances as a freelancer and protect your work-life balance at the same time!

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Arno Yeramyan
Arno Yeramyan is a polyglot who’s a fan of constantly learning new languages.
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