In this article, we shall study how a freelancer can ensure steady and efficient payments by drawing out a freelance consultant agreement.
Freelancing is a term used for short-term commitments or project-based partnerships. We have all grown up watching our parents and elders working day in and out at their full-time jobs. However, that is not necessarily the case with this generation. More and more people are choosing to give up their corporate jobs or their 9 to 5 and take up freelancing gigs. Surveys suggest that there has been a considerable rise in the number of freelancers in recent times. This percentage is expected to rise further. The only problem a freelancer may face is that of payments. In a full-time or corporate setup, the employer creates a contract signed by the employee. While in the case of freelancing, the freelancer should create a contract and get it signed by potential clients.
A contract between a freelancer and a firm is known as a freelancer contract. It outlines the many terms and circumstances pertaining to the freelancer’s job. This agreement is critical because it contributes to the development of a strong and equitable relationship between the firm and the freelancer.
Let us now study in detail what importance these freelance contracts hold and why it is necessary to have one.
The Need For Freelance Contracts
As a freelancer, it is obvious that you may be working on different projects. Every project is individual with distinctive requirements and job scope. The timeline for which you are working on every project also varies. Only you know how much work will go into the project and what you bring to the table. Hence, it is best to express your concerns and lay things clear on the table.
Since every project and its timeline varies, there is a need for a new contract each time. Rather than verbally agreeing on something, it is best to chalk out a written agreement contract and get it signed by the client. This avoids confusion in the future and makes the client legally bound to pay what is promised.
Drawing a legal contract should be the first step before starting a new project. Doing so avoids confusion and ensures timely payments and a level of security and certainty.
Vital Clauses That Need To Be There In Your Contract
Every freelance project is different, and so are its requirements. The terms and conditions may also vary based on the project and the client. But some important clauses must be part of your freelance contract to ensure the protection of rights. Make the following clauses a staple in your freelance contracts, and you are good to go. These clauses include:
- Job scope and output: Before starting a freelance gig, both parties (the client and the freelancer) must be on the same page. Both parties need to be fully aware of what the freelancer is to deliver and what they will offer. If this is not done, you may end up doing more than you signed up for.
- Premeditated payment structure: Whether a full-time job or a freelance gig, the need for an agreed payment structure is vital. You (the freelancer) must decide whether you want to be paid in full before or after the project. You may also choose to be paid in instalments or even agree on a commission model with the client. Whatever you opt for, make it crystal clear to the client and get the deed signed and sealed before you start work.
- Timeline: It is always a good idea to draw a specified timeline for the project. Not doing so may lead to unnecessary confusion, and you may end up dedicating more of your precious time than you thought. Also, timelines are necessary as they help chalk the process’s progression and act as a reference in many cases.
Freelance Payment Structure – The Kind Of Payments You Expect
It is of utmost importance to lay payment-related information on the table. You can choose how often you want to get paid as a freelancer. You can choose to be paid weekly, hourly, or even demand 25% of the total payable amount before the project. It is completely up to you. The same should be mentioned in your freelance contract. Here are some freelance payment structures that one can choose.
- Stage payments: If you are working on a big project, you can divide the same into stages. The stage-payment structure allows you to demand payment after every stage. It is best to divide the project into stages 1,2, and 3. Hence on the completion of stage 1, you can ask for a specified amount and then begin the next stage.
- Due-upon-receipt: This payment strategy is best when dealing with new clients. This strategy allows you to demand payment once the client receives the receipt. Avoid using this strategy with old clients with whom you have had long associations, as it may create a conflict of interest and affect harmonious business relations.
- The number of days/net: This payment strategy is the most-used one by freelancers. This common payment strategy allows you to mention when you want to get paid. You can mention the same in the invoice by writing it. For example, if you wish the client clears the payment within 30 days of receiving the invoice, you can mention Net 30 at the end of the invoice.
- 50% upfront: It is best to use this payment strategy when the project is big. Securing half of the total payment before starting work is considered safer.
Make Use Of Technology For Efficient Freelance Contracts and Payments
It is best to use technology to draw out efficient and faster freelance contracts. Various tools available in the market today help make this process of drawing out contracts and payment structures seamless and quick.
These digital tools have various templates that freelancers can use. One can also use accounting and invoicing software that helps make and receive payments from time easily. Making use of technology helps in saving time and also lowers the risk of discrepancies and human errors.
Conclusion
This article specifies the importance of a freelance contract and payment strategy. All important clauses which are aforementioned should be included in this contract. Doing so would safeguard your rights during and after the project. To rule out all confusion and uncertainties, it is best to take professional help. You can contact our lawyers at Vakilsearch and sit with us to draw out a desirable freelance contract.
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