I was just discussing this issue with a client. I thought of the just post manual hours work-around, but the client mentioned that solution would be difficult for accounting purposes. But it looks like there is an expense-reimbursement from the client side, so that should be the way to handle this issue. It's just not obvious anywhere that it has to be done by the client and not the freelancer.
re: "It is not helpful for UpWork to take a service fee for reimbursement of expenses. I'm not talking about paying freelancers for their work. That, of course, is critical and a necessary part of freelancing. But I should be able to repay a freelancer for a software license that they purchased upon my request. I shouldn't have to pay more for my freelancer to break even."
But this is not going to change.
Because of dishonest people who would cheat the system.
Dont blame Upwork for this one. There is nothing that they can do to change this until you eliminate the dishonest people.
So for now, take the hit on the fees, or do what everyone else is doing, which is to buy the software license yourself and send the serial number or activation code to the freelancer.
Sorry. That is the best we can do.
As Preston noted, "Sorry. That is the best we can do." It is, and is reflective of not just dishonesty on the part of freelancers or clients, but the one-size-fits-all solution that inevitably arises out of automating everything.
I have a job coming up with a current client. Airfare is negligible, less than $300. I've already spent more than $100 on linkedin and other ads looking for specialized assistance I will pay on my own. Beyond that, total travel expenses will be about $4,500 (gone for a month), and I'll pay contractors $1,500 out of my pocket. I've suggested the client rent the hotel room on my behalf, as that is more than $2,000. It costs him the same amount of money to pay it directly as to reminburse me, and saves me $200+.
Some non-commodity jobs simply require travel.
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