Should You Request a Deposit from Your Clients?
January 11, 2008 by Deb
Filed under Freelance Writing
Do you request a deposit from your client before you begin a project? Many writers, especially those who write for the web, don’t request deposits at all. In fact, many clients won’t hire a writer who requests a deposit.
Here’s why you should and why many don’t.
Why request a deposit?
Deposits prevent you from getting the shaft. I’ve never been stiffed by a client. I don’t know if that’s because certain clients had to pay a deposit before I would begin the gig, or because I have great clients. By requesting a non-refundable deposit up front, you’re guaranteeing at least some payment for your work.
Deposits allow the cash to flow. Requesting a deposit at the beginning of the task ensures you won’t go broke while waiting for accounting to cut the second check. In the publishing world, payment on acceptance usually means a check is cut 30 days from receipt of your invoice or payment request. Deposits ensure you’ll still be able to eat.
Deposits show good faith. If your client issues a deposit, it’s showing his faith in you to do a good job according to the terms of your contract. And you’re showing your faith in him by accepting the deposit and doing the work.
Why don’t some clients issue deposits to their writers?
When I worked in publishing (from the early 80’s through the late 90’s), no freelancers would write for us without requesting a deposit. For them it was unheard of to accept an assignment without a show of good faith. Nowadays, especially with the boom in web content writing, many writers are writing without a deposit. There are several reasons for this:
- It doesn’t occur to them they can do so.
- Webmasters and web portals won’t pay deposits.
- With so much competition many writers feel they have a better chance if they don’t request a deposit.
Don’t be afraid to ask
Don’t be afraid to ask for a deposit up front. If your client balks, use your best judgement. I’ve never had a single client turn down a request for a deposit. Now, if you write for one of the many famous web content portals out there (LoveToKnow, About.com, Associated Content, etc) these are regular gigs with regular payment schedules and you won’t get a deposit. There’s no reason why other clients shouldn’t pay a portion in advance, however. All of my clients are regular monthly gigs right now, so I don’t request a deposit. If someone brand new gave me a call, you can bet I’d request partial payment in advance. I haven’t been turned down yet.
How much should you request as a deposit?
This depends on several things: The writer, how well you know the client, how much work is involved. Many writers are comfortable asking for 20% – 50%.
Requesting a deposit shows good faith in both parties and ensures you’ll receive at least some form of payment for your work. Do you charge a deposit? Why or why not?
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Very good advice. I call it a “retainer”, which sounds more professional and all that. And I like to hit the 25% range, which is a bit low but workable.
Also, don’t forget the most important reason to ask for a retainer – to make sure the check doesn’t bounce!
A retainer is different from an advance or deposit. A retainer is paid monthly and “retains” your time. A deposit (which is a word clients balk at less) or advance is a percentage of the agreed-upon fee paid before commencement of work. I cannot get these for articles or magazine work, but I insist on them for corporate or marketing work. Deal breaker. If companies don’t know how to buy creative services or won’t send a deposit, you will be hatin’ life down the road.
I always request a 50% deposit on larger projects, unless it’s for a repeat customer. It’s a necessity for cash flow.
I work out a weekly pay arrangement for long-term projects with repeat customers. Again, it comes down to cash flow and the value they’re receiving from me. I’m less expensive than hiring an ad agency and can turn projects around with a lot less lead time.
Hi Deb,
I usually require a deposit from my new clients, and hadn’t been turned down until recently.
Whenever I get a blogging/contributing author/blog article gig, I get turned down for deposits. I’m beginning to think that webmasters or those that hire a bunch of freelancers aren’t willing to pay upfront.
One person told me that because I retain the copyright, he would have no recourse if I didn’t do the work. Also, these types of clients are generally asking for low-paying jobs, under $60. Maybe that’s the reason.
So far I’ve gone on to accept these small gigs after getting some company information from them. I haven’t been stiffed yet (knock on wood), but I don’t like it. I figure that if I don’t get paid then I’ll just find someone else to buy the article I guess.
I don’t request a deposit, but I wished I had last year when I got stiffed on a large project, in which the payout would have been enough to cover all my monthly expenses. This project was for a repeat client, who had always paid on time – so I was caught off guard. Since the majority of my clients are weekly or request smaller projects, I don’t ask for a deposit. I’ve been stiffed twice on smaller projects, but I was always able to find another buyer.
It depends on the project. With smaller projects I don’t ask for any sort of deposit, but if it’s a larger project there will usually be a small up-front fee. On a number of those projects I’ll also use structured payments, so that the initial fee is paid when the job begins and then an additional amount will be paid when certain project milestones are reached. The clients that I’ve used this method with have generally liked it, as it allows them to pay a smaller amount over the course of the project instead of having to wait ’til everything is done and then pay the entire due amount at once.
I usually request a deposit from new clients. With repeat clients I come to a payment arrangement that works for both of us. I have a couple of clients whom I invoice on completion of the job, and a couple of others who pay weekly instalments.
I haven’t requested a deposit either but this discussion certainly has given me something to think about and a good reason for requesting a deposit.
@ Theda – All my business is about web content, and no one has ever complained about a deposit. It’s seen as standard on both sides, as far as I can tell. Blogging, articles, website copy… No issues.
But I can say that none of my clients offer credit or let us hold any copyright. Magazine work, I expect credit or some form of copyright. Web work? Nuh uh. It’s ghostwriting all the way, because clients want to be the experts for their business success. Makes sense.
(opens up the can of worms about retaining copyright…)
Also, 60$ an hour isn’t low pay, in my eyes. Then again, I’m Canadian. We have frozen brains.
Hmm, I’ve started asking for a third up front after being stiffed on a project last year.
It does work out with private individuals and smaller companies: e.g. I just took quite a bit up front for a novel I am translating from Swedish. However, government agencies and larger corporations won’t touch you if you ask for money up front. Last year I had to wait nearly three months from a Swedish government agency after slaving my summer vacation away doing a rush job for them.
Bottom line: as a freelancer it’s very difficult to protect yourself all the time, but if you can get money up front. Businesses seem to squeeze you if they can.
I still wouldn’t do anything else, mind you !
I always require a 50% deposit on projects that are larger than $100, or if a client is brand new. I think ghostwriting on the web is a different playing field. While it might not be required in other writing arenas, it’s pretty standard.
I’ve been toying with doing a 25% deposit…something about having a larger deposit at the end seems more motivating.
Thankfully the company that had been more than a month late and kept making excuses paid me last night after I had to threaten them with small claims, not ideal because I really liked working for them, but I needed to be paid.
This is actually a subject I keep a tally of. I’ve been ripped off once – $175 that I never saw again. The person I wrote the article for had created a false name, false mailing address, and false phone number. That made me a little leery, so now I request those items and a website and then research them to make sure they are legit.
There have been to date 8 jobs that I would have landed until the discussion of payments came up. I said that I would prefer a 25% deposit because of the fraudulent people out there. Each time, the owner of the company would come back and say those terms were not acceptable and then say they were no longer interested in my writing services. While this may have protected me, it has also cost some business, so I stopped bothering with the deposit and business picked up. So far, I’ve been lucky and get paid as promised, but I know they time will come when I’ll be fighting another payment.
James: I meant $60 or less for the entire project. I was turned down for the deposit when someone wanted one $20 article, or several $5 articles. So that kind of low pay. I haven’t been turned down when I did a project at $60 an hour and the project was estimated at over $100. Yet.
I think it might be like Courtney says…ghostwriting on the web may be a different playing field.
When you work on little projects, do they give you a deposit (or have you worked on little projects)?
THANK YOU for writing this post, as it has been on my mind recently. Now that I have started to accept writing assignments outside of my normal contract work, I’ve been wondering what is the proper protocol. Thanks for clearing this up for me . . .
@ Theda – Yeah, for stuff less than $100, I usually don’t ask for a deposit, because it’s more trouble for me to manage that. Anything over $100 is a standard 50/50 or split into milestone payments.
I use a structured payment for contracts where I am being paid by the job (ie $1500 for a brochure, $3000 for a web site). When the client signs the contract, I get 30-50% up front. Then the contract is structured for due dates and additional payments as the project gets completed. This makes it easier for the client and less likely for me to be stiffed.
But truth be told, I don’t have a lot of contracts like that. My freelance journalism contracts are $300 here and $50 there. And they pay mostly acceptance net 30, terms dictated by the publication, not by me. My largest client right now pays by the hour and there’s no real way of knowing how many hours I am going to log. It was all hunky dory until they were 2 weeks late with a payment and I overdrew my checking account (ie. someone list an eye). On the other hand, I am glad that I didn’t take any money up front because I got very sick the third week of the contract and only billed 50% of the hours I was supposed to log.
I don’t see deposits as really fitting the way I do business–or the way the industry does business. But then, is a structured payment any different from asking for a deposit? Different vocabulary. Same effect.
I use a structured payment for contracts where I am being paid by the job (ie $1500 for a brochure, $3000 for a web site). When the client signs the contract, I get 30-50% up front. Then the contract is structured for due dates and additional payments as the project gets completed. This makes it easier for the client and less likely for me to be stiffed.
But truth be told, I don’t have a lot of contracts like that. My freelance journalism contracts are $300 here and $50 there. And they pay mostly acceptance net 30, terms dictated by the publication, not by me. My largest client right now pays by the hour and there’s no real way of knowing how many hours I am going to log. It was all hunky dory until they were 2 weeks late with a payment and I overdrew my checking account (ie. someone lost an eye). On the other hand, I am glad that I didn’t take any money up front because I got very sick the third week of the contract and only billed 50% of the hours I was supposed to log.
I don’t see deposits as really fitting the way I do business–or the way the industry does business. But then, is a structured payment any different from asking for a deposit? Different vocabulary. Same effect.
Many of my clients are traditional journalism pubs. They won’t pay a deposit. I have one retainer client, though my definition differs slightly from Erik’s.
With clients that have required more expense on my end (newsletter clients), I’ve required expenses (printing, graphics). Not much luck with others, but I think that has to do with the nature of the clientele (pubs rather than small businesses).
I have asked for a deposit,%25 of the fee, only to be turned down. It does annoy me, so lately I have not asked. Perhaps for someone like me, who isn’t as well known, it may not work as well. But, this post has inspired me to ask on my next gig.
If a writer has no clips, no links, nothing to show experience, I can see the client not wanting to work with a deposit. I’ve seenwriters like that go flaky. But, many of us do have clips and links.
One question:
If you blog for a client outside of a media network, what is a good way to ask for a deposit? I haven’t had but one problem with an individual owner…it is something I would like to consider, though. This is a rough draft of how I might ask, but would much appreciate tips!
“Before we continue with the mechanics of how the blog should be handled, I would like to mention that I have a policy of a one time %25 deposit. After the first month, we would continue on the agreed invoice and payment schedule.”
I worked for a client for about 6 months, and they always paid in a timely manner so I never thought to ask for a deposit or retainer during my final round of work for them.
Now, they shafted me on over $400 at the end of the summer, and communication also ceased. They didn’t respond until I threatened them with a lawsuit, where they responded once to tell me there site was having “problems with funding” and i would be paid in Sept.
I have yet to receive a cent, and he no longer responds to correspondence. It was for a site called AmericanBlog.
Any advice? Is this a lost cause or can I fight this in any way?
I should have realized that as Grant Writer people perceive me a bit differently. I call my “deposit” a “retainer” because it does indeed reserve my time up until the deadline. People see me as more of a professional service provider than a writer.
I’m saying this because there is indeed a line that is crossed when you become a professional service provider, and there may be ways that any writer can pump up their image a bit. This is just a thought on my part, not anything specific or direct.
I always request a deposit now from first-time clients, usually for 50% of the total project fee. (Very large projects I’ll break up into multiple smaller payments, but most of my projects are on the smaller side.) After the first project, I usually revert back to a pay-at-project-completion policy.
Amusingly, two of the three times I’ve had a client try to stiff me, it’s been when they’ve already paid a deposit. Both times I eventually got them to pay the balance, but only after notifying them that I was going to report them as a non-paying client.
I ask for one-third or one-half up front, depending on the size of the project. It’s worked well. In only one case was I stiffed, and I had that one-half payment up front, so it didn’t sting so badly. Oh, others have tried to stiff me, but I’ve learned to work with two safety nets – an airtight contract spelling everything out, and a billing process that includes eventual litigation.
Jon, on a side note, could you get in touch? I’m looking for the meaning of two Swedish words, and if you could help, I’d appreciate it.
)
I usually request a deposit, but I decided to see what would happen if I did not. I took an online assignment from Craigslist(generally a good place to job shop).
The client gave a reputable New York address and a very professional request. He asked for a 24 hour turn-around because he had to meet with clients and I delivered. The check he offered to cut and send never came and when I sent a request for payment he had deleted his e-mail address. It was a small assignment, so not much to lose.
So, I tested and what I learned was that when both client and writer are professional, no one gets ripped off.
@ Erik – We ask for retainers when clients “book” us or reserve a chunk of time. As in, we can’t begin until February 5, the client wants to reserve us, hence, he pays a retainer. The retainer applies to the last invoice.
Deposit is slightly different, as it’s essentially paying for services up front and not applied to the last invoice.
@ Julie – That looks fine. Just remember, you’re not “asking” for a deposit. You’re stating your business terms. Difference
Though I agree, deposits don’t work for magazine and newspaper industries, I think.
I request a deposit. I’ve been freelance writing for a month. It hasn’t been a problem. Who knows I might run into it later.
I’ve never requested a deposit. I guess if you’re talking about articles, then the kill fee would be the good faith “deposit”?
I don’t write for companies I haven’t heard of before, and I don’t answer blind ads.
I guess if I did write for someone I was unsure of, I would request a deposit. It has never occurred to me though. Even when I was doing copywriting, I always got paid.
Deb,
Great post, as usual!
I have a question for everyone though. I’m about to design a website for a small client (couple hundred $$). From my conversations with him he doesn’t have too much experience. Think: small guy who’s just started his own business.
When I spoke to him last week I brought up payment terms and he immediately offered me a 30% deposit. However, he wants me to fax him a copy of my driver’s license, for “his own protection”.
I can see where he’s coming from, but I’m a little uneasy about faxing any sort of id to just some guy. Has anyone been asked to do this before? Is there any reason why I should be worried about identity theft? If so, then which specific piece of information can I just black out?
I tried it and it worked. Small job, $250, but I am getting %50 instead of my requested %25. How great, this will really help out that unfilled gap in the mothly payments. Thanks for posting this Deb and to everyone else, great advice!
What a great topic! I charge a deposit for jobs over $100, and I rarely take jobs for less than that. I will waive a deposit for a client I’ve worked with previously, or if I have some other reassurance (like they are well-known). But for new and unknown clients, no deposit, no work. Period.
@Saad,
I posted about a month ago in a different discussion that I’d been asked to fax a copy of my driver’s license and I wasn’t willing to take that risk. I’d specifically told the “client” that if I had to provide that information, I wanted to black out my driver’s license number, signature and month and day from my date of birth, I didn’t feel this person needed that information at that point. As soon as I emailed that response, he never contacted me again. It would have been a really decent job – $25 for every 100 words for music reviews from CDs provided to me. They claimed they needed the license as proof of my age in case there was mature content on the CDs. I understand their need to protect themselves, but there are too many scam artists out there.
@Tamara-for the two times I’ve not been paid. I threatened small claims or a trip to the Better Business Bureau (which only works with certain companies). That threat worked this week. For the other company, it was harder because the guy I’d written the articles for took down his website and deleted his email after I turned in the last of the articles. I did go to his webhost provider, but they couldn’t do anything because he’d yanked his website and had also given them the fake email. In the end, I took the $150 loss with him and then kept copyscaping those articles. Eventually they did appear and I went to the website that posted them and told them to either pay up or remove the articles. In the end, they removed the articles.
In your case, you might want to see if Angela Hoy can help you.
I would never fax a license. What is that telling the person? I once had a guy say he would never pay a deposit unless he “came over and saw my house.” I said, “Uh…forget it.” It creeped me out. I don’t mind meeting with clients, thought it’s unusual these days–but for that to suddenly be a condition made me think he was trying to see if I was broke, worth the money, needed the money, I don’t even know–but my work should stand for itself.
Wow, this is so timely right now. I have a client who I did a relatively small job for and she paid me in a timely fashion with even a small bonus because she liked my work.
Then she asked me to help her with a book proposal that a major pub house was waiting for. I asked her for half up front and she paid it. Then I worked on the proposal over the summer and returned it to her in September. She complained in an email that I had changed the book and that she would call me. She never did. I sent follow-up emails about how I had only changed the order of some of the stories and it would be easy to change them back and that I had added info in the marketing section that could be left out. No answer. Another email. No answer. Finally before Christmas, she emailed me to say she had been going through a divorce, someone else had come out with a book similar to hers, and she wasn’t sure she wanted to do it any more.
I guess she thinks that because she isn’t going to use the proposal, she doesn’t have to pay me the rest of the money. I haven’t given up yet but I am sure glad I got half up front – especially since I took less than I normally would have since she was a repeat client.
And, of course, I live in New York, she lives in CA.
I do editing rather than original writing, but I try to get a 50% deposit on large projects and on smaller projects from new clients. This sorts out the legitimate clients and has given me an excellent track record of collecting in my Internet-only business. I would be very leery of a prospective client who didn’t see the need for a deposit so that the risk of nonperformance can be shared between the client and the service provider.
It depends on the project. For most business writing gigs, it’s the norm, either 1/3 or 1/2 upfront. For critique/editing, it’s 1/2 up front, the remainder when the work is complete. For articles, it depends on the contract offered by the publisher.
I would NOT fax my license to a client. If it’s a high paid gig and they’re putting me on payroll for a period of time and taking taxes out or plan to 1099 me, I’d give my social security number, providing their accounting dept. sent me the appropriate form. But I don’t toss around ID lightly. Too many cases of identity theft for me to be comfortable with that.
PS This also bring up a topic, Deb, you might want to address — the need for freelancers to have templates of contracts or letters of agreement. I find that cuts a lot of the hassle and getting stiffed.
For instance, the commentor who worked on the book proposal and the client didn’t pay the rest because she was going through a divorce and someone else published a similar book. Too darned bad. The writer did the work, and a contract would have clearly stated that the writer is paid no matter what the client decides to do or not do with the proposal.
Deb,
Thanks for a great topic. I do copy writing and work with manuscripts. Typically, I charge 50% up front and the remainder upon receipt of the finished product. For larger projects I have set up a system where I get a third up front, a third at receipt of a specific deliverable (ie an edited MSS and standard query letter), and final third after the last deliverable (ie book proposal).
I ask for 25% upfront simply as security. I’m putting considerable time into their project and stand to gain nothing from the outcome unless they pay me. The 25% advance gives me the security I need to give my all to their project.
On my last job after asking for a 25% advance she paid 100% in advance. Talk about a way to ensure your freelancer works her heart out for you. For that woman I would have bent over backwards to complete on time and to specifications. Perhaps potential employers should consider that side of things when they talk about payments and advances for their freelancers.