Why Freelancers Should Get Upfront Payment From Clients

Getting paid for your work is one of the most exciting — and sometimes most nerve-wracking — parts of running your own business. 

While proposals and invoices are built around trust, it’s also a smart idea to build a few guarantees into your payment process and terms. That’s where a deposit comes in. 

Deposits are a form of security for freelancers and studios. Getting money upfront ensures commitment from your client and provides you with financial security in case a project falls through. 

Let’s go over what an upfront payment or deposit is, the benefits of getting deposits, and how to ask for a deposit from your clients in just a few easy steps.

What is an Upfront Payment? 

An upfront payment or deposit is either a partial or full payment made before a project kicks off. When you add a deposit to your proposal, once your client accepts they will pay an invoice that’s based on the agreed-upon deposit amount before you start working. Getting a deposit from clients is a common practice among freelancers and studios as it helps establish financial security and trust — which are critical when you’re running your own business.  

There are a few ways you can structure your deposit request depending on your preference and the project needs:

• Percentage-based deposits (e.g., 20% of the project total)

• Partial flat-rate deposit (e.g., $2,000 that will go toward the project total) 

• Full payment (e.g., 100% of the project total)

4 Benefits of Deposits for Freelancers and Studios

There are many reasons why you may want to secure a deposit before you start a project. The biggest one is that it helps solidify the client’s commitment and protects you from missing any dollars you’re owed or not getting paid after the project is complete. 

Let’s go over a few benefits of getting upfront payments and deposits from clients when freelancing. 

1. Secures commitment 

There’s nothing worse than being excited about a new project or client, getting started, and then never hearing from them again. Being ghosted is an unfortunate reality that many freelancers have had to deal with at some point in their careers, either during the proposal process or worse, after sending an invoice. This is where requesting a deposit can help. 

When a client pays upfront, whether partial or full, they’re essentially guaranteeing their commitment to the project. It’s less likely that a client will ghost you, lose interest, or decide not to pay you if they’ve already invested some of their money in the project. 

2. Communicates professionalism

Not only do deposits help build trust between you and your client, but they also show that you take your business seriously. By requesting upfront payments, you’re communicating to your client that this is a legitimate business transaction and you have professional payment processes in place. 

Plus, when you have a seamless payments workflow, your clients can pay deposits quickly and easily. They’ll likely find it convenient to get payment out of the way so they can focus on the project itself and the results that it will generate for their business. 

3. Protects you from unpaid invoices 

Unpaid invoices are a legitimate concern when freelancing if you don’t have the right systems in place to protect you. A survey from Independent Economy Council found that 72% of freelancers have outstanding invoices that clients have yet to pay. And of those freelancers, 59% are owed a whopping $50,000 or more for work they already completed. 

No one wants to deal with the frustrating aftermath of unpaid invoices: chasing down clients, sending countless follow-ups, and being left worrying whether you’ll ever see that money. Requesting a deposit or upfront payment can help protect you and your business from the stress of late payments or nonpayments. 

By securing partial or full payment *before* you start working, you’re ensuring that the client is committing to paying you for the project — which will give you peace of mind when it comes time to wrap up and invoice for the rest of the payment. 

4. Provides cashflow 

Another benefit of getting upfront payment is that it can help maintain a steady cash flow. 

Some projects may require working capital or out-of-pocket expenses in order to get started — whether you have to bring on teammates or pay for supplies necessary for the project. 

Getting a deposit or full payment from the client can help you kick off the project without having to wait for the funds or dip into your savings to finance the project. 

How to Ask for a Deposit 

Now that you know how upfront payments can be beneficial for your freelance business, you’re probably thinking, “How do I ask my clients for a deposit?” 

While it may sound nerve-wracking, getting an upfront payment can be easily worked into your current payment process. Here’s how to ask for a deposit. 

1. Communicate to clients early in the process 

The hardest part about requesting deposits is bringing it up to potential clients. If you’re nervous about mentioning it during your initial conversations, just remember that asking for deposits is a very common freelance practice. This probably isn’t the first time your client has received this request and it won’t be the last. 

If you’re wary of scaring a potential client away by asking for a deposit before they even sign your proposal, think about it this way: If for any reason they aren’t open to paying upfront, then it’s better to find that out during the proposal process than down the road when they suddenly disappear after receiving your invoices. Being upfront about your payment process is the best way to find clients who are the right fit for you and your business. 

2. Include it in your contract terms 

Once you’ve made the client aware of your deposit request, it’s time to put it in writing. Your terms and process around payments need to be outlined in your freelance contract. Outlining your deposit request in your contract lets the client know from the start what your process is and what they can expect as far as when to pay invoices and for how much. 

Keep in mind that some clients may be more open to paying upfront than others — it depends on the project, type of client, and budget. This is why bringing this up *before* you send over your contract is a must. Once you know they’re aware of the deposit request and are on the same page, you shouldn’t have to worry about pushback or back and forth around the contract terms. 

3. Build deposits into your proposal process 

After outlining the deposit process in your contract terms, the next step is to ensure you have an easy way to request deposits from clients. The best opportunity to do this is during the proposal process. 

When you include deposits in your contract terms — which should be included in your proposal — it makes it easy for the client to find information about their payments all in one place instead of having to chase down multiple documents. By doing this, your proposal becomes the source of truth between you and your client which emphasizes your professionalism and provides your clients with more ease.

With Wethos, you can include a deposit request with your proposal in the proposal builder. The best part about this option is that it seamlessly integrates with your workflow. By enabling deposit requests with your proposals, an invoice for the deposit amount will automatically generate and save to your drafts. Once your client signs the proposal, the invoice will automatically send and you’ll be ready to get started with the project with peace of mind.

When putting together your proposal, you’ll see a “Deposit” section underneath the Scope of Work. Toggle this option “on” to request a deposit. You can decide the amount you want to collect for your deposit whether that’s a percentage of the project total or a flat rate. 

4. Have a clear payment process 

As a freelancer, one of the many parts of your job is to make it as easy as possible for your clients to pay you. Your entire payment process, from sending invoices to requesting deposits to accepting payments, should be clearly outlined in your terms. It’s also important to have a tool that provides clarity and makes it easy for your client to pay. Make sure your client is aware of your process and the timeline of each of the steps so they’re not caught off guard when it comes time to pay an invoice and use a tool that automates invoices for deposits to save time. 

If you’re requesting deposits, make sure it fits seamlessly into your current payment method. Offer multiple payment methods for your clients to choose from, whether that’s through an ACH bank transfer, a credit card payment, or a payment processing tool like PayPal. Adapting to a client’s preferred payment method is not only convenient for them but it helps you get paid faster and seamlessly. 

Getting payment upfront is a smart way to protect your freelance business. But requesting a deposit is just one step in the process. To fully protect your business and secure your cash flow, you need to have clear payment terms and offer multiple payment methods to adapt to your client’s preferences and make it easier for you to get paid faster. 

Ready to request a deposit on your next proposal? Sign up for your Wethos account here.