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Upfront payments possible?

jackiepeeler
Community Guru

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.

17 REPLIES 17
zacgman
Ace Contributor

I sometimes do a "Deposit" milestone, for 30-40% of the contract amount, and I ask the client to approve that as soon as the contract starts

lysis10
Community Guru
I would never give someone money upfront here. That's the whole point of escrow. Bump up the price by a percentage to account for the escrow risk in case they dispute. Too many frauds here and qa is terrible. Sucks for us but can't blame people for having their guard up.

Had 2 wot phone calls this week and I had to bring out th big b in me and stopped her short and asked her if she walked into her doctors office would she ask these question. Gawd one of them was "what is a typical freelancer day like" so I told her I sleep until noon and then go to the gym. I was so annoyed. But then she said what several others have said to me and explained that hiring on upwork is hard because of the fraud profiles.
kochubei_valeria
Community Manager
Community Manager

Jacqueline,

 

It's technically possible for a client to pay an upfront by releasing the first milestone before the freelancers starts working on the project. However, this practice is not recommended as it cancels the protection of Escrow.

~ Valeria
Upwork

Oh, thanks, that's really interesting. How would it do that?

 

Are you saying if there is a say, 30 percent total upfront payment, after you get that and the next milestone(s) are then funded, those subsequent milestones would not have escrow protection?

 

 

No, it means there is no Escrow protection for the client who releases money without having anything to review. If the freelancer scarpers the client is left with no protection for the amount they released.

 

I used to ask for up-front payments before we had Escrow (in the oDesk days when there was no Escrow at all) but would never do so now. (Those days there was even a function for that)

 

The whole point of Escrow is so there is no need for it.

lysis10
Community Guru
It just depends. Client history and country are huge factors. Even if they claim to be in the US but I can tell they are from certain countries, experience tells me to bump it up.

So let's say I think it's about an hour. Maybe 1.5 hours. I might go $200. This covers my 1 revision or let's say they dispute. I will go for all of it in this case but let's say for whatever reason I messed up and md has me dead to rights in an error I can stroke his little ego and go 50% and make him feel like he won, dispute person will see this as fair, but I've still at least made money on actual time spent plus a little extra for the hassle.

@Jennifer M wrote:
It just depends. ...........

 ............... depends on posting in the right thread?

 

😄

no I was replying to her but no quote function in mobile

If a client wants to make an Upfront payment, that's their prerogative. I've had at least one client who does this, creating something like a 20% milestone for starting a project, presumably so I won't have to wait untIil I finish to get some payment. But I wouldn't ask a client for that, especially not a client I haven't worked with previously -- if nothing else, it seems to me there's a big risk the client will choose another freelancer who doesn't make such a demand.

__________________________________________________
"No good deed goes unpunished." -- Clare Boothe Luce

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

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.


@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.

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.


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

@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

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.

 


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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