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Re: Upfront payments possible?

jmccpa
Community Guru
Joseph C Member Since: Jan 22, 2016
11 of 18

Lawyers and CPAs often get an advance retainer from clients.

 

For CPAs doing expert witness work or valuation work, it is common to get a substantial retainer in advance to assure impartiality and to avoid the appearance that the "expert" has modified his/her opinion to be sure of getting paid.

 

In fact, experienced expert witnesses usually require for all fees incurred to be paid before giving testimony in deposition  or trial.

 

However, with the Upwork system of escrowing for fixed fee jobs and guaranties for hourly, the need for upfront payments is eliminated.

 

Joe

 

 

Joseph M. C. ,P.C., CPA/ABV
prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
12 of 18

Sometimes clients offer to pay me up-front payments.

 

I always decline.

 

Mainly because I don't want to owe them money if I don't don't the work.

 

I try to be a responsible freelancer... but I can't always predict the future. If something comes up... if there's a delay... I much prefer being in a position where they have never actually released any money to me. If there's a delay, I feel better if they have control over the money and feel like they could get the money refunded if necessary.

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
13 of 18

@Joseph C wrote:

However, with the Upwork system of escrowing for fixed fee jobs and guaranties for hourly, the need for upfront payments is eliminated.

 


 That is exactly the crux of the matter.

apphoney
Active Member
Tommie A Member Since: May 8, 2019
14 of 18

I would not say that the need for up-front payment is at all eliminated. A freelancer may place value on getting an up-front payment and having those funds available to them. Also, there is value lost in having to endure a dispute at all. Safeguarding against this process with an up-front payment is reasonable. Just because Upwork decided to change things with an escrow service doesn't mean they've completely rewritten what it means to get (Or not get) an up-front payment.

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
15 of 18

Tommie A wrote:

I would not say that the need for up-front payment is at all eliminated. A freelancer may place value on getting an up-front payment and having those funds available to them. Also, there is value lost in having to endure a dispute at all. Safeguarding against this process with an up-front payment is reasonable.


Upfront payments do not safefguard against a dispute. They can be disputed just like any other payment.

 

kat303
Community Guru
Kathy T Member Since: Jul 17, 2015
16 of 18

@Jacqueline P wrote:

I just asked for an upfront payment -- that is, a partial payment to begin a project before any work is submitted. The client has some experience here and said that can't be done. But I have had it done in the past on an Upwork contract. It's not unusual for agencies and designers with their own businesses to ask for that, but maybe not here.

 

It wasn't important so I let it go, but I'd like to know for the future.


 A client CAN fund escrow (assuming this is a fixed rate job) and release those funds Before you start work. This client may be hesitant about doing that because they have no way of getting those funds back if something goes wrong. Of course, you wouldn't do that if that was the case.

 

There have been posts from clients who have done just that, and the freelancer disappeared after getting the funds. And the client posts something to the effect ...." The freelancer asked for payment so I released the funds in escrow, but the freelancer is not responding to my messages. I don't have my work, How can I get the work that's owed to me and how can I get my work from the freelancer."

 

The whole purpose of escrow is showing good faith. It shows the freelancer that the client has the money and is willing to pay. Escrow keeps that money safe until the job is done and the client approves the results of the work.

 

Having said that, there are circumstances where an upfront payment (before work starts) may be necessary. If the job is going to take more then a month (such as ghostwriting) a freelancer can't wait for that length of time to get paid. So an up front payment can be made. Of if the freelancer needs to hire actors etc for a special video, an upfront payment is necessary so the freelancer can pay the actors.

 

IMO, I would not ask for funds to be released Before work starts. If a client knows that funds are released after a job is approved, asking before hand can turn off a client. They may think you're out to scam them. And they will quickly look for another freelancer.

gilbert-phyllis
Community Guru
Phyllis G Member Since: Sep 8, 2016
17 of 18

What others have said covers it, for the most part. In my niche (custom primary research), however, it's not unusual for certain phases of a large project to consume all of my available bandwidth for specific periods of time. Accepting the contract, therefore, requires blocking my calendar accordingly. I invariably turn down other opportunities then, so if the project gets cancelled for some reason, I've lost out. Also, on some projects I invest considerable time and effort prior to producing a substantial deliverable that can be reviewed. For those reasons, I have often included an initial "launch" milestone in a proposal that represents 20-30% of the fee (typical in my non-UW contracts) and have never landed a single one of those. So I guess UW clients are not interested in upfront payments.

 

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
18 of 18

Phyllis G wrote:

 So I guess UW clients are not interested in upfront payments.

 


I only ask for advance payment on very large projects with a lot of work to do before there's a deliverable, but I've had Upwork clients pre-pay up to $2,000 in that situation. And, I've had a few smaller clients make unsolicited advance payments.

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