Why does Upwork allow partial funding of the Escrow?

[danmiller007]

Hi! I’ve been in a situation before where I’ve had to chase someone for the last half they didn’t fund into the Escrow. Upworks response is to ensure that the client funds the full amount at the beginning of the project. My question is, why isn’t this already a requirement on the clients part? Seems like a lot of extra selling for the freelancer to have to do. Can be difficult to convince someone to fund the full amount if they don’t have to automatically. Anyone else find this frustrating?

[yitwail]

Jordan, I think multiple milestones are useful for large, fixed price projects, with clear deliverables, so you don't have to wait all the way to the completion of the project to get paid, but as you've observed, it does permit the client to drag their feet when funding the remaining milestones. Realistically, I think all you can do is either ask the client to fund the entire project in advance as one milestone, or pass on the project. 

[petra_r]

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Jordan M wrote:
Hi! I’ve been in a situation before where I’ve had to chase someone for the last half they didn’t fund into the Escrow. Upworks response is to ensure that the client funds the full amount at the beginning of the project. My question is, why isn’t this already a requirement on the clients part? Seems like a lot of extra selling for the freelancer to have to do. Can be difficult to convince someone to fund the full amount if they don’t have to automatically. Anyone else find this frustrating?

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No, I don't find it frustrating because I don't accept a contract until it has been funded the way that was agreed before. Also, Upwork do not say the full project has to be funded, just the first milestone. 

I submit against a milestone exactly what was defined for that milestone.

Then a new milestone can be set up for the next part.

Anything up to $ 1500 I generally do "per project" - fully funded as one milestone.

[bizwriterjohn]

Seems like  a competent approach.   Has it worked 100% of the time?  I am aware of Upworkers on the system who do not pursue this strategy.  Instead they pursue strategies of focus on client delivery and let the money work out as it works out.  That is not to say they lag behind in the tactics of project financial management.  They simple do not require such things as full funding or other set-in-stone tactics. 

I am aware of the fact those Upworkers have never experienced a client who did not pay the agreed amount.  There are several of them I know.   One of which, I believe, has a record of about 70 to 0 in achieving full payment.

My message is a simple one.  Correct client selection and competent to advanced excellence in delivery seems to consistently solve the problem of lack-of-payment. It is possible to achieve 100% payment outcomes, without direct tactics such as this.

One must decide one's value set however.  I trust in correct client identification, competent to advance excellence in delivery and believe the money will work out just fine.

Boomer who loves ice cream.

[prestonhunter]

You can set things up however you want. But for me, as a freelancer, I never want to set up large milestones with a client I don't know. Too risky.

I start small... with an amount I can afford to lose if necessary. Because I don't have time for clients who play games with fixed-price contracts. 

With a small amount of time and money on the line, if a client asks for out-of-scope work, I can tell him very simply that the work is done and he needs to release payment or I will close the contract myself.

After a client has demonstrated that he can be trusted with fixed-price, I will agree to larger milestones.

But there is nothing wrong with splitting things up. I have done projects which were accomplished using more than a dozen separate fixed-price contracts.

[tlsanders]

There are a lot of good reasons.

If I'm undertaking a large project, for instance, I would certainly not expect a client to deposit $30,000 against work to be completed across a period of six months to a year. What sense does it make for the client to leave a large chunk of money in limbo for all that time, when the milestone system makes it easy to ensure that you're not doing work without funds in escrow? In fact, this would preclude a small client planning to do a job in increments as funding allowed from using Upwork. 

And, of course, a great many projects aren't completely defined at the outset, and neither the client nor the freelancer knows exactly what the ultimate price tag for the project will be, or how many milestones will be required, so requiring full funding up front would likely result in the need for modifications later in many cases.

Clients ARE required to fund the full amount of a milestone. But, Upwork can't know what scope of work is included in a particular milestone and whether the description of the milestone matches the funding. That's for you to make sure of. And, you don't have to "sell" the client anything--you tell the client that you'll start work on the milestone as soon as it's fully funded, or that you'll submit the portion of the work covered by the milestone and wait for the remainder to be funded, and then you go on with your life.

[jr-translation]

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Jordan M wrote:
Hi! I’ve been in a situation before where I’ve had to chase someone for the last half they didn’t fund into the Escrow. Upworks response is to ensure that the client funds the full amount at the beginning of the project. My question is, why isn’t this already a requirement on the clients part? Seems like a lot of extra selling for the freelancer to have to do. Can be difficult to convince someone to fund the full amount if they don’t have to automatically. Anyone else find this frustrating?

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You just have to turn it around. The ToS say:

6.4 OWNERSHIP OF WORK PRODUCT AND INTELLECTUAL PROPERTY

Upon Freelancer’s receipt of full payment from Client, the Work Product (except for any Background Technology), including without limitation all Intellectual Property Rights in the Work Product (except for any Background Technology), will be the sole and exclusive property of Client, and Client will be deemed to be the author thereof. If Freelancer has any Intellectual Property Rights to the Work Product that are not owned by Client upon Freelancer’s receipt of payment from Client, Freelancer hereby automatically irrevocably assigns to Client all right, title and interest worldwide in and to such Intellectual Property Rights. Except as set forth above, Freelancer retains no rights to use, and will not challenge the validity of Client’s ownership in, such Intellectual Property Rights. Freelancer hereby waives any moral rights, rights of paternity, integrity, disclosure and withdrawal or inalienable rights under applicable law in and to the Work Product. If payment is made only for partial delivery of Work Product, the assignment described herein applies only to the portion of Work Product delivered and paid for.

If the client only funds and pays part of the agree amount, he can not use the product, because he does not own it.

[bizwriterjohn]

Hello.

In addition to my work as an Upwork contractor, I also hire Upworkers on the platform.  For scope: about 10 or so over the past years.  I completed my most recent contract with my 2020 mentoree last week, as we were fortunate to have found work in one of my projects he could immedately deliver.

I explain this, so that you understand my response comes with a base of experience in hiring Upworkers.

The probable answer to your questions include:

1. Upwork requires some amount of payment made by the hiring client first-and-foremost to check to see if the credit or debit card we post is active and can support payments.  I perceive this as a safety check provided for the benefit of Upworkers.  Full funding is apparently not a requirement they deem necessary.

2. Some clients bring in multi-thousand dollars projects to the system.  Requiring immediate funding of that amount of cash would (a) impinge on client cash flow and (b) tie up a bunch of money.

My sense here is that Upwork 'splits the difference' in risk and requirements of funding to make it easy for clients to fund to some modest amount, yet, at the same time, make sure our debit or credit cards can sustain payments.

You asked if anyone else feel frustration at this.  

- Yes, I do, when I am a contractor starting a partially funded project.

- No, I like it a lot as a feature when I am a hiring client.

Therein lay the balance Upwork has chosen to maintain.