Freelancers are often advised to ask their clients for a deposit at the start of projects but many still aren’t doing it. This is surprising, as starting projects with a deposit has benefits for both the freelancer and the clients.
If you still need convincing, here’s why freelance projects must start with a deposit:
It’s good for cashflow
Cashflow issues can ruin a small business so it’s vital to keep money coming regularly into your business.
Getting a deposit at the start of your projects greatly helps with your cashflow. Because if you wait until the end of a project to invoice all the work and the project end is delayed, then so is your payment. If you get some payment up front then you can have more control over your cashflow and any delays won’t have so much impact on your finances.
Project deposits can also benefit clients as spreading the payments over two or three instalments can be easier on your cashflow too.
It shows you are both committed to the project
Trust between freelancer and client is extremely important to the successful completion of projects. Using project deposits is a great way of cementing that trust and demonstrating commitment to the work.
Getting a deposit from your client, before you start the work, shows that the client cares about the project and wants it to be a success. It also demonstrates that they are willing to pay you for the work (if a client refuses to pay a deposit you should take that as a warning sign that they may not intend to pay you at all!)
Additionally, by giving a deposit, your client has already invested in the work so will be more inclined to stick to deadlines for giving feedback or providing information. That means the work can be finished on time and your client can see a return on their investment. It’s win-win.
Trust works both ways and by taking a deposit from you the freelancer is also committing to the project. You can know that your deposit secures your project a place in their schedule and that they’ll complete the work.
Additionally, getting a deposit from you is usually an indicator that they take their business seriously. Which means you should expect them to act in a really professional manner with you.
As you can see, using deposits usually benefits both freelancers and their clients. By using them both the freelancer and the client are committing to building a professional relationship. One built on trust, which could eventually lead to the successful completion of many projects!
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