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jeremiah-brown
Community Member

Reimbursement for purchases

I would like to know if there is a way to receive dollar for dollar reimbursement for purchases that I make on various projects?

Some of my contracts involve building prototype inventions and new products.  Upon doing so, I often need to purchase supplies, hardware, and other various items to complete fabrication and assembly of these different items.  I typically submit invoices to the client at various intervals (usually per invoice) to receive reimbursement.  I do this in a way that is similar to a milestone such that I have a backstop in the event that a client decides not to pay.

However, once of the major annoyances that I have is that reimbursements from clients is not a 1:1 exchange.  For example, if I purchase $100 of materials, submit the invoice with $100 shown as line items, the client repays me, then I only receive $90 because of the 10% Upwork fee.  Is there any way to avoid this for reimbursements? 

 

I don't have an issue with Upwork taking a percentage when it comes to hours worked since thats how the site works, but hitting my reimbursements is getting old.  The only way that I can make up for this is to overcharge the client, which I don't think is right considering we are simply transacting material purchases.

ACCEPTED SOLUTION
dyumnin
Community Member

  1. Create a shared shopping cart on an ecommerce site.
  2. Add all the required material to the cart.
  3. Share the cart with the client for payment.
  4. If the shipment crosses national boundries, ensure that the logistics company has online payment of custom duties.

Note: I have paused bidding on upwork for contracts related to design of electronic products because the Bill of materials goes into thousands of $$ and it is neither fesible to ask the client to pay a 20% markup fees of $1000 or more, nor to wake him up at odd hours and request direct payment of custom duties, because the courier guy ignored my request to not attempt delivery before duties are cleared and is now at my door with a customs demand for $300

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11 REPLIES 11
prestonhunter
Community Member

Standard fees apply. Not complicated.

 

If you have a new client, fee is 20%.

 

If you purchase a $100 photo, fee is 20%.

 

If client reimburses you $100, then you receive $80.

 

re: "Is there any way to avoid this for reimbursements?"

 

Have the client purchase the materials directly.

jeremiah-brown
Community Member

I don't think you're understanding what I am asking.

 

Yes, I am fully aware of Upwork's fee structure, no need to post it.

 

Having the client purchase the materials is not an option.  Since I am developing prototypes and new products, I frequently order parts from different manufacturers, vendors, and suppliers.  Some of these vendors and suppliers require a business license to open an account with them - therefore my client would be unable to order from them without documentation.

 

Secondly, these parts orders get expensive.  I don't mind doing it because there is an agreement with the client, spelled out in writing, and all kept documented through Upwork.  However, I like to be reimbursed after each order so that it provides a checkpoint for the project.  This is much better than letting invoices and POs accumulate until the job is finished, only to find that the client can't afford to pay or there are disagreements in the amount owed or billed, whether by me or the vendor.

 

Again, as I stated above, I have no problem with the fee structure if its based on hours worked.  This is the fee for facilitating the job.  Reimbursement for materials should be kept outside of these fee channels, in my opinion.  I understand that it would be difficult to track what is a legitimate expense and what isnt, especially when fraud runs rampant in the job postings.  

 

I am simply asking if there is any way to accomplish a 1:1 reimbursement for items without violating Upwork's terms.

Yes there is simple way for this as Preston pointed you just need to make statment to the client the price is larger by 10-20% do to transaction fee.

Yes, I am aware that I can tack on a fee to offset the upwork fee.  That's not what I am asking about.  I am asking if there's a way to simply do a 1:1 reimbursement through Upwork.  Nothing more, nothing less.  Thank you for the response.  Evidently there is no other way.

You can charge the client more, to cover the Upwork fees.

 

Or you can have the client buy the materials or pay the invoices directly.

 

If you receive money direcly from the client - money that doesn't go through Upwork - then you are violating Upwork ToS, and you could have your Upwork account terminated if you are caught doing that.

 

Freelancers have had their Upwork accounts suspended or otherwise penalized simply for TALKING about receiving money directly from a client.

At no time has anybody mentioned, suggested, or asked about transacting money outside of Upwork.  

 

I really don't appreciate you planting the implied notion that it may be occurring within this thread.

Jeremiah:
It was not my intention to imply that anybody associated with this thread was thinking about doing a client/freelancer exchange of funds outside of Upwork.

 

I'm just providing the standard information in response to this standard question.

 

You can do a search in the Community Forum and see that this question has been asked dozens of times, and Forum participants always provide the same information.

If you are surprised that there isn't a way to get 1:1 reimbursement, then that is normal.

It is normal to think that it should be possible to do that through Upwork.

But it is not.

dyumnin
Community Member

  1. Create a shared shopping cart on an ecommerce site.
  2. Add all the required material to the cart.
  3. Share the cart with the client for payment.
  4. If the shipment crosses national boundries, ensure that the logistics company has online payment of custom duties.

Note: I have paused bidding on upwork for contracts related to design of electronic products because the Bill of materials goes into thousands of $$ and it is neither fesible to ask the client to pay a 20% markup fees of $1000 or more, nor to wake him up at odd hours and request direct payment of custom duties, because the courier guy ignored my request to not attempt delivery before duties are cleared and is now at my door with a customs demand for $300

I can't do this for the vendors I work with.  Good idea though, I'll keep it in mind in case the opportunity arises.

tlbp
Community Member

If reimbursements were not included in the commission calculation, millions of freelancers would suddenly begin purchase materials for the projects their clients have assigned them and insisting that they owed no commission. Upwork is not set up to review the validity of invoices--which could easily be faked. So, the only way to handle the commission issue to to charge an appropriate amount to cover that commission when acting as a procurement agent for your client. 

I wish Upwork would set up some kind of a dashboard where freelancers can submit invoices to clients.  Something like the submit work for review option, but instead a submit invoice for review and payment.  Once submitted, the invoice and payment (with or without the fee) gets logged together as a digital record for that freelancer/client.  That way if there are discrepancies later on, there is already a tabulated history of receipts/transactions without having to weed through all of the messages.

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