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The Definitive Guide To Getting Paid As A Freelancer

Key Takeaways

  • Why (and how) you must absolutely and always get a deposit payment before starting a new project.
  • You need to eliminate cash flow hiccups. Invoicing weekly is the best way of doing that.
  • Get serious about late payments (I’ve included what to write to clients when they’re late.)
  • Always use an airtight contract.
  • Live off last month’s profits.

Most articles on the web that talk about small business cash flow or money management or whatever else tend to focus on one thing: “spend less”. Often the advice is around the importance of saving money (duh!) or reducing the number of lattes you drink daily (silly).

This is not that sort of article.

Today I want to focus on how you can get paid faster, get paid more reliably, and never need to worry about whether or not that invoice you sent out will arrive before the rent is due.

Most freelancers, myself included, tend to be optimists. We expect that things will work in our favor. Don’t we all love that high you get after signing a new client? When you realize that over the next few weeks or months a bunch of brand new money will be sent your way?

But that sense of accomplishment and optimism can fade pretty quickly. And it usually fades around money. Late invoices. Stubborn clients. Squabbling over payment terms. The stress that naturally comes around when you realize that you live in a world of fixed expenses and variable income.

When I started to build my agency, I became responsible for the financial livelihoods of quite a few other people. As a freelancer, I supported myself, my wife Deborah, and my kids. But as the owner of an agency, I suddenly added Andrew (and his wife), Ryan (and his wife, who was going through medical school), Ann, Kristi, Thomas, Zack, and a number of others to the list of people who depended on me to keep their bank accounts from overdrafting.

You already know how hard it is to keep yourself afloat. It gets exponentially harder when you have a twice-a-month payroll expense.

We couldn’t afford to let our money situation run wild. I had to build into the way we worked certain frameworks that helped us ensure that we’d get paid on time so that I could pay both my personal and business expenses.

Here are a few of the things I learned along the way:

Always get a deposit

Before starting work on any project, get a deposit payment — especially when working with a new client. As we’ll discuss shortly, it’s really important to set the precedent that if you’re not paid, you don’t work.

I see many freelancers, especially those new to the profession, who don’t do this. Either it never occurred to them, or — more likely — they don’t want to “rock the boat” and make demands that could jeopardize the new relationship they have with their client.

But just about every professional services company requires some sort of downpayment as a way to ensure that someone’s serious and able to pay.

If you’re billing for time, I like invoicing for one to two weeks of work upfront. You treat this income as a credit, and when you produce invoices in the future you deduct the total due from this credit pool.

Most invoicing tools support the idea of client credits, but if you’re using one that doesn’t, here’s what you can do: When drafting a new invoice, include a line item with a negative total amount that either fully deducts the invoice total (if the total is less than the client’s credit) or deducts whatever’s left from their initial deposit payment.

I typically require deposits when a contract is signed. This could be months prior the kickoff date of the project, and as a matter of policy I let my clients know that I can only schedule their project if they’ve paid a deposit. Be careful though: This money is a liability, and you probably shouldn’t treat these deposits as actual income.

Invoice frequently

When I was first starting out, I invoiced twice a month. You should invoice as frequently as you can — preferably once a week.

The shorter the loop between sending out an invoice and getting paid, the better. If you’re working on NET 30 terms (meaning: the client has 30 days to pay your invoice) and you invoice once a month, you’re looking at upwards of 60 days (2 months!) before getting paid for your time.

This is less than ideal, especially since many of us don’t have the cash flow to support that.

In the United States, many clients still pay using paper checks. And if your clients are at the opposite end of the country, as many of mine were, it might take a while for checks to slowly make their way from your client to your mailbox. I’ve been through days where I’d stare at the clock, praying that the mailman showed up with a client check before the day’s deposit window closed at the bank.

One of the best ways I’ve found to get paid faster by check is what I call the FedEx Trick. Send your clients a sign-on-delivery packet that includes a printout of their invoice and a pre-paid overnight FedEx pouch. Have them put their check in the pouch you sent and place it in the mail. This might cost you a few dollars each time you invoice, but it can really help eliminate the stress associated with the ambiguity of “the check is in the mail”.

A note about credit cards: The common pushback freelancers have toward accepting credit cards are the fees, which are typically around 3%. Any normal business would kill for that little transaction overhead! My biggest gripe with credit cards are consumer protections. Lets say you build a website for a new company, and a few months later that company is out of business. If they paid you with a credit card, they can issue a chargeback. While a solid contract and documentation can often help you win these, you shouldn’t want to ever put yourself in this position to begin with. Checks and wire transfers are arbitrated in civil courtrooms; credit card disputes are arbitrated by American Express and such.

Don’t work unless you’re paid

Always try to get paid upfront. Not just for deposits, but for everything.

I once had a client who had booked about half of my team. They were a good client, and paid their bills on-time (we had NET 30 payment terms at the time). Mid-way through the engagement they defaulted on one of their invoices. And because we invoiced twice a month, we actually had two outstanding invoices out and we were working toward an upcoming invoice when I realized they were overdue.

So I called the client, who I was on fairly good terms with, and let him know his payment was late.

“Brennan, I meant to tell you… I’m out of money. But it’s ok. I’m talking with some investors this week.”

We had around $80k outstanding. And I then realized that there was a fairly good chance now that I’d never see that money, or at least not anytime soon.

“Paul…”, I hesitantly replied, “You know our costs. You know what we’re charging you each week. Why am I just hearing about this now?”

“I needed the app closer to being finished before I could raise the money I needed to —“

Paul, I don’t care. That’s not my concern.”

“Brennan, I’m putting everything on the line with this business. My house. My kid’s college money. Everything.”

Paul, as the founder you have everything to gain and everything to lose. I’m not your investor. I own a services firm, and I need to pay people for the month and a half they spent working on your project. And now you’re telling me you don’t have the money.”

The conversation didn’t get any better. And this made me realize something: I never, ever, ever want to need to play the role of debt collector ever again.

After this project, I began telling my clients that we only work if there’s money in the bank. We’d invoice weekly, and if the money for the upcoming week wasn’t cleared in my bank account by Monday, I’d rather us sit idle than work on credit.

When questioned, here’s what I’d say:

“The best use of my time is making sure that my clients get the best service possible from me. If I’m spending time chasing around invoices, I’m not spending that time on delivering value to my clients.”

And it worked. This might be a bit different than what your clients are typically used to, but you need to let them know what the advantage is for them (you being able to focus on them instead of delinquent clients).


I’m not going to talk here about creating retainers. I covered that in-depth in the last section of Double Your Freelancing Rate and previously on this blog.

Retainers and productized consulting services are subscriptions. They’re predictable expenses for your clients and predictable revenue for you.

My accountant, who I pay on retainer, holds a copy of my credit card and charges me on the 1st of each month like clockwork. I never see or pay an invoice. Likewise, my coaching clients are automatically billed monthly.

If you have clients who are paying you monthly, try to avoid needing to send invoices in order to get paid. Setup some sort of automated payment system that will draft from your clients account each month.

Here are a few thoughts on how you can do this:

  • I use GetDPD, which gives me a unique URL for each subscription service I offer (which at the moment is just my monthly coaching). The payments actually happen through PayPal.
  • You can setup recurring billing directly through PayPal, but I believe it’s not as turnkey as using GetDPD as a frontend.
  • allows you to setup recurring ACH payments with your clients.
  • If you’re OK with the liability, you could signup for a free Stripe account and manually enter in your client’s credit card info and associate it with a monthly billing plan (preferably over the phone, you don’t want to have this info floating around your computer).

Get it in writing

Always use a contract!

I’m still shocked and surprised by how many people I talk to don’t have legal, binding contracts between them and their clients.

Besides the usual indemnity, non-disclosure, and other clauses that go into services contracts, you want to make sure your contract includes provisions for what happens if you don’t get paid on time.

At a minimum:

  • The client owns nothing they haven’t paid for.
  • You charge interest on overdue invoices (non-issue if you charge upfront).
  • You have every right afforded to you by the courts to get that money back.

If you’re working with a client who isn’t exactly fiscally stable (like the example I gave above), I’d strongly advise you to have your clients personally guarantee your agreement with them. When I contacted my attorney in a panic to let them know that I was owed $80k, he told me that the best he could do was to send them a strong letter and contact their bank with a request for the money. But if the bank account didn’t have anything in it… I was out of luck. Because my client was behind the shield of a corporation (which, in the US, only takes $100 sent to your state’s Corporation Commission) I couldn’t really do anything more.

(In the next few weeks, I’ll be updating the Complete package of Double Your Freelancing Rate with the Master Services Agreement I use for ensuring I get paid, along with indemnity, non-disclosure, etc. I paid a good amount of money — over $11,000 — for this contract, and you can save yourself a lot in legal bills by using mine. If you have the Complete package, you’ll get this update for free.)

(Also, obvious disclaimer: I’m not a lawyer. This is all what my lawyer told me. What I relayed above might not be applicable to you.)

Recruit a “bad cop”

If you’re not charging upfront and a client is late on paying, the best thing you can do is be stern. Let them know that you need to stop work, and that it will only resume once you’re paid. (This is also a great time to mandate a pay-upfront policy.)

I had a full-time assistant who was my “bad cop” — she’d call clients who were overdue and relay on the terms of our contract, namely that we don’t work if they’re in a state of default. Since many of my clients were attached to me and were on really good terms with me, I could position myself as the “good cop” who helplessly needs to go along with whatever Ann, the office manager, says we need to do.

Earlier this week, I had a great interview with Kurt Elster (Episode 20 of The Business of Freelancing Podcast). In our chat, Kurt mentioned that he has his girlfriend play the role of his “credit analyst”, and she would be the bearer of bad news to overdue clients.

The preferred path is to avoid this altogether by always getting paid upfront. But if you’re not there yet, try to think about who could be the “bad cop” in your freelancing business.

What to do when you need cash NOW

If you need money immediately, or you want to raise some money based on your past track record as a consultant, there are a few options for you.

Are you familiar with invoice factoring?

My first entrepreneurial pursuit was a lead generation company I started after dropping out of college. Most of my early customers were mortgage brokers and real estate agents, but I started to see that factoring companies were signing up. “Factoring? What the heck is that?” I remember thinking. And after some Googling and discussions, I learned that they were the business equivalent of payday loans.

Here’s factoring in a nutshell:

Many companies, especially those that require buying from suppliers and then selling to distributors, tend to have a lot of receivables (invoices) floating around at any given time. And often the payment terms are NET 60, NET 90, or more, especially if they’re working with BigCos or governments.

Often times, these companies want to do things that companies are wont to do — like expanding, purchasing new equipment, and so on. You might expect that these companies get a bank loan. But getting a loan, whether for personal or business reasons, requires time (which not everyone has), due diligence by the lender, and quite a bit of paperwork.

A factoring company is a special type of lender that will buy your outstanding invoices at a discount. There are other companies that can lend you advances based on your historical cash flow.

The terms, for both factoring and advances, tend to be pretty bad, especially when compared to traditional loans or lines of credit. But you can often get money immediately, which is helpful when you have bills that need to be paid.

Here are a few ways to get working capital:

  • Kabbage. This is really only helpful if you get paid through Stripe, PayPal, or other processors that they support. They’ll look at your past revenue, and lend you money based on that. They set you up on a fixed payment schedule, and Kabbage’s fees are pretty high.
  • PayPal Working Capital. If you do a lot of transactions through PayPal, this is actually a pretty nice option. Like Kabbage, they’ll look at your average monthly revenue and come up with an amount based off that. But unlike Kabbage, there’s no fixed payment plan. They’ll take a percentage — between 10% and 30% — of each future sale until your loan is paid off. And the origination fee is pretty low, often around 5% of the total they lend.
  • Fundbox. This is a new service I just came across, and it seems that they’re targeting freelancers and agencies. They’ll buy your outstanding invoices and pay you right away, but they’ll take a percentage of the invoice amount as their own.

Closing thoughts…

In closing, here’s what I recommend:

  1. Bill weekly. It’s easier for your clients to budget for, and makes charging upfront a lot easier (since the burn rate per week is fixed).
  2. Charge upfront. Get deposits upfront, and invoice ahead of time.
  3. Use a contract that guarantees that you’ll get paid.
  4. If you can, live off last month’s profits. If you need cash, don’t be afraid to seek out the cash you need to survive, even if it means losing money. Stressing over whether or not you can pay your bills is something you want to avoid, as it will adversely affect your work and the relationships you have with your clients.
  5. Ensure that what you’re charging will allow you to generate the income you desire. Use our freelance rate calculator to see if you’re on track.

What are some things that you’ve done to make sure that you’re paid on-time and keep your business humming along nicely? Let me know in the comments below!

  • Jure Žove

    Great one Brennan, certainly a lot of useful tips. Now just have to put them in practice. 🙂

  • Gina

    I think asking for a deposit or to get paid in advance is the hardest part when working with a new client. I like the client credit component though & could see how if one got in the habit, this could pan out nicely! Great article with a lot of good info.

    • Mario Strada

      I have always asked for a deposit from most of my clients and very rarely had any push back. If a new client is not receptive to giving you a reasonable deposit on the job you are about to do for them, that should sound all sort of alarm bells.

      My policy is usually to charge them some of the work that invariably I have already done for them (such as proposal work, mockups, etc.) plus the work that I will do in the next 2 days after I receive the deposit.

      That way, if there is a problem and the client wants to pull out, my contract clearly states that deposits are refundable minus any work already performed, charged by the hour at my regular rate.

      Also, it’s a good idea to try to get your deposit through Paypal and make sure you mark it as being a deposit. Paypal has a policy of no refund on deposits for services to be rendered in the future. That gives you leverage. I think that if you received a deposit and you have not yet worked an equivalent amount to what you were paid, you should refund it, regardless if PP lets you get away with it, but you need to be compensated for the work you already did. If the client is canceling for their own reasons (as opposed to you screwing up big time), they only get back the portion of the deposit you didn’t work for.

      • Tracy Bradley

        Agreed – I won’t take on a client who doesn’t want to pay a deposit. Huge red flag if there’s pushback on a deposit – it’s pretty standard.

  • Mario Strada

    In a previous life I was a glass artist and my wife and I were able to grow our company well beyond our little artist studio. Obviously, going from 2 or 3 items production a month to 50K items creates all sorts of issues, such as buying 50K boxes, shrink wrap, packing popcorn, etc.
    So in order to pay for all that (most of our clients paid net 60 or later and run their receiving as a revenue center back charging for every little mistake we made) we had to resort to factoring.

    My suggestion is to look at factoring like you would Morphine if you were in great pain: take the Morphine but try not to take it too frequently or you’ll get addicted to it.

    Factoring is the crack of any business that uses it and in almost no time you are back to where you were, only poorer because part of your profit is going to the factoring company.

    That doesn’t mean you should not use it, it means: BE CAREFUL.

    • Factoring is similar to a shark loan but with a fancier name. If it takes a few weeks (or months) to get a bank loan, while it takes a few days with factoring, while you need the money now. You are tempted for this and as you said it might be ok for once or twice if you have no other choice. But don’t fall into the trap of easy-lender money

      • Totally agree. I was really considering putting a big CAUTION banner above the bit about factoring. My hope was comparing it to payday loans would be enough.

        • toobulkeh

          And John Oliver’s recent spiel tied the deal. Don’t consider factoring.

          • katie99

            Ooh. Which segment was this? Not sure I caught it.

  • Josh

    You suggest paying via wire transfer to prevent chargebacks yet you suggest automating payments through credit card?

    • “If you’re OK with the liability, you could signup for a free Stripe account…”

      The other options I recommend involve PayPal Business Payments subscriptions, which are basically ACH, along with, which is ACH. When mentioning Stripe for doing credit card payments, I made sure to preface it with a liability (chargeback) disclaimer 🙂

      • toobulkeh

        ACH has pretty hefty chargeback systems too. Hence bank deposit limits or ACH accepting limits — those are basically lines of credit, ala risk analysis of your company and financial history, in case of a chargeback. Starting up, we had to deal with getting our limits above the checks we were bringing in for quick jobs! Even $5,000 took some stern phone calls. A year or two of history goes a long way.

  • Savyra Meyer

    Something I did a few years ago was charge an extra 20% for the sheer hassle of getting money out of possibly dodgy clients. This was then the ‘actual price’. If however, they paid within 7 days, they got the discount. Worked very well. I did make sure to put the relevant bits in bold so that they didn’t feel cheated when they went over 7 days inadvertently and had to pay the higher price.

  • Pooyan Khosravi

    It’s really inspiring to see someone talk about pragmatic approaches without being afraid of getting called an asshole.

    I’m so sick of out of dream beliefs and extreme unfit ideas that I could high five you Brennan.

    Thanks for the article.

  • Carolyn Breninger

    I agree with many of your suggestions. Even for a very small consultant (as I am), many of these are relevant. I have found that managing my own invoices through QuickBooks, with the option to pay via bank or credit card (linked to the Intuit Payment Network) gets me paid faster. The QB invoices have a direct link to IPN that the customer can click on. I print them as pdf’s and email them, with a message that they can pay this invoice conveniently online. Then I follow up, if I do not see the payment notice within a day or so. I do not have to wait on checks, though, like PayPal, you do have to wait a few days to get the money into your account.

    I spend much less time worrying about what will show up in the mailbox. It really does get you paid faster when your invoice shows up in their email box, as it is a constant reminder until they take care of it. I do memorized invoices in QB for monthly recurring payments.

    I am also not bashful about calling a client and asking if they got my invoice and when might I expect receipt of payment. You can ask nicely and they will not be offended. That is part of what building a relationship with your client will do for you. So call/email and talk to them during your project; as that does buy you the right to ask when you may receive payment.

    I also agree that you should take a deposit. I used to do 33% of a project, now I do 50% of a project as a deposit; unless it is something long-term. It does depend on what you are doing for the customer.

    The biggest item is to have a binding contract. You need to set the expectation with the customer what you will do and when you expect to be paid. If you prance around those items, your customer will most likely take advantage of that. When you have a default (and you will, at some time, guaranteed) you must have the legal items to fall back on. Or you will have just given your time away for free. You also must have some degree of control over your work, to demand payment when it is finished. For example, in constructing a new website for clients, I do not give the keys to the kingdom (log-ins and passwords) until I receive the final payment. AND maintenance billing is separate and starts AFTER the final payment. Do not let clients say, “Oh, I just thought that was part of the maintenance on the site” as an excuse for not paying for work.

    My other suggestion is NEVER work for free. Even if it is only minimal, charge for your time. People who think you are for free will never pay you what you want to make. This includes non-profits.

    Sorry to be so long-winded. But you got me started… 🙂

  • I’d like to chip in here and say a big part of cash flow as a freelancer is keeping on top of your business invoice flow, I have 3 lists, billed, to invoice and booked. The to invoice is what is being invoiced that week and my billed list has invoiced dates and more importantly due dates and I check that daily. Another trick I used was a client that was on net30 was paying late by the process they used to pay the invoice(which normally ended up with me having the cash a week late). With this client I switched them to net15 and now I get paid within 30 easily now. Great Article Brennan

  • toobulkeh

    On the topic of deposits, have you ever done some kind of hybrid financing between fixed price and hourly rate? We’ve adopted it as a trial with a single new client to see if we can use it as cash-flow leverage to bridge the gap of hiring people.

    On a small note, we’re not sure how to express it to our client in the form of hourly work. It’s a credited deposit, but it’s also a guaranteed monthly payment. Usually our invoices show hours worked, but what if our hours are less than the deposit? This may often be the case because we invoice on the calendar month, and a project phase might start towards the end of the month.

  • I don’t have a company, just have an author website and started writing, but your article is smart mindset!

  • This information is extremely helpful. My clients are all startup, tech companies. Sometimes, I get the feeling there are cash flow issues (invoices get paid much later than usual). I’m fairly new to freelancing, and I’ve been doing NET30 because that was what the company requested. Is it difficult to convince startup companies to switch to the retainer method?

  • Bree Wakefield

    Great article, thank you!

  • Ant Pugh

    Great article. I have started asking for a deposit for all project work now, and I haven’t had one negative response yet – I think most people respect me and my time more now that I ask for this.

    One question I have though is how do you ask for this for consultancy work billed hourly or daily? Its easy with a project, I can say “I require a 50% deposit to schedule your project into my diary”. But with consultancy work (which may not always be the same number of days per week/month, its a little more difficult to figure out the correct way to build upfront payment into negotiations?

    Any suggestions would be very welcome 🙂

    • [email protected]

      I have the same question. What is your recommendation when you have clients that pay by the hour? I am assuming weekly? I would like to shift to the “pay to play” method where they pay upfront, but when the hours are irregular or clients choose to pay hourly vs. retainer this causes difficulty. Would love your input, Brennan. Thanks!

  • Devin Campbell

    Awesome post! It’s so important to have a good invoicing software. As a freelancer, I’ve been checking the progress of a company called Workweek. Looks like it will be perfect to invoice right from your website. Check them out and subscribe at

  • Gipsy7

    I hate pops ups but this one is more annoying. It pops up and it won’t disappear, even after I signed up for the lesson #1. I did that b/c I want to check it out, not b/c the pop up. But if you have a pop up, make it go away? this turns viewers off big time. I wont’ go yet b/c I am finding your content still interesting but if it was 10% less interesting I would go away and not come back, on the account of the pop up alone. My 2 cents.

  • Julie gorham

    Great information. My credit card processing company allows me to have the have the client sign through and email push as soon as I capture dollars. This means they cannot request a charge back because the dollars were authorized, not just captured.

  • Kyla Matton Osborne

    Great advice here about protection when working for a corporate client!

  • Trent

    I design web sites and generate leads and have had a couple clients refuse to pay me. When a client refuses to pay me I send the account over to a commercial debt collection agency that has worked time and time again for me in the past… That is Tucker Albin & Associates… Hope this helps.

  • Suzi Wojtkun-Pritchett

    Fundbox is not all it’s cracked up to be. You have to use a certain invoicing method which not all companies accept and you have to have at least six months’ worth of invoices with that particular company. It tried getting funds through Fundbox but it wasn’t worth the hassle.

  • Who are you? Can I marry you (in a non sexual way)? This solid advice is beyond valuable to me as a 5+ year freelance content & community manager. These tips are indeed going to help me as I step up my game to become a business person and worker. Thank you!

  • if you are good at what you do and you have a good relationship with you client you never have to worry about being paid.

  • Airam

    YES. Yes to all of this.

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