Having started freelancing in a recession, my payment terms are simple: a 25% upfront deposit, with further 25% milestone payments at agreed intervals, and a final 25% payment before the web site goes live.

The 25% deposit confirms to me that a prospective client is serious about a project. Further 25% payments make the client feel involved with the project, and ensures they actually review the work rather than just signing it off and then coming back at the end with a list of changes. For them, the next 25% payment signifies they’re happy with the work to date, and want to continue. It gives them some protection, too – if I don’t produce the work, I don’t get paid.

Only once have I ever had to chase an invoice (ironically because I put a web site live before the final payment), so I’ve stuck to my guns on this one.

I’ve had a few businesses in the past say the above doesn’t work with their payment terms. I explain that I am a one man band freelancer, that my rates are competitive because of my payment terms, which means I don’t have to include an overhead for invoicing & chasing clients, and ongoing part payments ensure I have a smooth, steady cashflow. It also means I’m not worrying / stressing about not being paid, which can have a negative impact on (their) work.

If a business doesn’t understand the above after its been explained, then I simply move onto the next one. A risky strategy by dropping a prospective client? Probably – but I’d rather have no client than a late (or non) paying one (and I guess I’ve been lucky, as another prospective client has always then come along wanting work done).