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Tips for Handling Online Payments for Freelance Workers

Jul 9, 2020 5:53:44 PM

One of the great things about working as a freelancer is flexibility — no boss, no office, no fixed schedule. Naturally, there are also challenges that are more commonly experienced by freelancers than other workers, one of which is dealing with online payments.

If you’re a freelance worker or someone who does contract work remotely (which is slowly becoming the norm), it’s vital to have a system in place to make sure you get paid for the work you do.

Even if you’re just starting out your freelancing career, you can save yourself a lot of trouble by being clear and detailed about how you’ll be paid. Cash flow is everything, and self-employed individuals are essentially microbusinesses, which makes cash flow even more important.

This guide will walk you through the best ways to reduce friction when dealing with everything related to payments as a freelancer, including in the negotiation stage, invoicing, and handling payments for deliverables.

1. Eliminate Payment Concerns with Clients

It’s not uncommon for some freelancers to work for days, weeks, sometimes even months for a client without the guarantee of getting paid. This is the freelance worker’s worst nightmare.

The best way to avoid chasing payments from clients is to have a contract. This is something you can circle back to when a client tries to underpay you, demands more than the scope of work you both agreed to, or outright refuses to pay.

But what if there’s no written agreement? For instance, freelancing platforms such as Fiverr or Freelancer.com may not always accommodate a written agreement between both parties.

In this case, it’s often up to you to take initiative. If you’re working on a big project that requires several weeks or months of work, ask for a milestone payment. Instead of paying you the full amount at the end of the project, milestone payments are a percentage of the fee that the client pays to you over the course of the project.

Clients usually don’t have a problem with paying freelancers 50% upfront, and 50% at the completion of the project. However, factors such as the timeline, size of the project, and type of deliverables, usually affect the number of payment milestones.

2. Charge What You’re Worth

The freelancer’s journey can be fraught with challenges, most of which will involve evaluating and proving your worth to others.

Some clients may think that what you do is easy, when in fact, it actually takes a great deal of skill and experience. It’s part of your job as a freelancer to communicate this to the client so that they’ll understand. While you don’t need to go into the details of your every method and approach, you do need to make sure that you are getting fair compensation.

Also, don’t be afraid to negotiate. If you’re just starting off, you will naturally have to start at a more modest rate. But the more you gain experience and the better you become at your craft or work, the more you should charge for your services.

3. Agree on a Payment Method

There’s hardly anything better for a freelancer than to have an online payment method that moves money fast and doesn’t get denied. But what if you use a payment gateway that your client doesn’t? What then?

The key to smooth payments and fewer problems is to diversify. Creating an account on different platforms can sound like a lot of work — especially because it means you’ll need to manage funds in multiple accounts — but it’s one way to reduce friction when dealing with client payments.

Considerations When Choosing a Payment Gateway

Since we’re talking about protecting your cash flow, it makes sense to also cover fees. For example, even though PayPal boasts close to 300 million users, they lag behind other payment platforms because of the exchange rate and service charges.

PayMaya, on the other hand, has very reasonable fees, making it an ideal choice forFilipino freelancers who don’t want to lose more of their hard-earned money to transaction charges and low conversion rates.

You also need a platform that’s accepted in your country and suits your freelancing career’s needs. Bank transfers, for instance, aren’t so popular if you need the money right away. However, there are plenty of other payment gateways out there. Some of them even cater to other modes of payment, such as Bitcoin, Ethereum, and other cryptocurrencies. Whichever gateway you do choose, it’s imperative that you and your client agree on it.

4. Create Multiple Invoice Templates

Freelancers tend to offer more than one service, which makes invoice creation a headache the more services you have. With PayMaya’s digital invoicing facility,however, you can create as many customized invoices as you need for each of your services.

Let’s say you agree to offer both writing and copyediting services to a client, but you charge different rates for each service. With PayMaya, it’s quick and easy to send two separate invoices every month, which saves you a lot of time and confusion in the long run.

5. Reduce Payment Processing Issues

If you’re a freelancer who works or is interested in working with global clients, it’s often not as easy as you think to process bank payments coming from different parts of the world. Cross-border transactions have a higher chance of getting declined if the bank can’t recognize where the payment authorization request is coming from.

PayMaya provides a solution to this. Even if you don’t have a credit card, it’s easy to receive online payouts through PayMaya’s Digital Invoice facility regardless of where you are in the world. Our company has partnered up with some of the largest banks and financial services providers, which means you can move your payments from freelancing a lot easier and faster. You may visit this page to check out the complete list of our payment partners.

The best part about PayMaya Digital Invoice is that you can do everything even from your mobile device — whether it’s through chat, SMS, or via email.

What to Do If a Client Doesn’t Pay an Invoice

The majority of clients you’ll meet as a freelancer are willing to pay within the terms agreed upon. Some, however, may forget to pay, or will simply be unwilling to — and they may or may not ever tell you.

If this happens, the first step is to give the client the benefit of the doubt. You can choose to wait for two or three days after the pay date, or you can send a polite reminder right away (plus a copy of the invoice).

If this doesn’t work, send another notice — a week after your first — and be firmer this time while maintaining a professional tone. Don’t be afraid to inform the client that you will take legal action if the conditions of the contract aren’t met.

Getting Assistance From a Lawyer


If you still don’t get paid, you need to make a choice. It will cost money to take legal action, which you may not have the funds to do if you’re just starting off your freelancing career.

In some cases, it can be better to write off the client’s debt as bad debt rather than pursue legal action and spend money. Although some situations may also be more economic if you do take action. The decision is yours how far you want to take it.

Alternative Methods to Deal with Non-Paying Clients

Indeed, there are other things you can do if you decide against taking legal action:

Report Them

Freelancing platforms such as UpWork and Freelancer.com offer ways to protect your money from shady clients, which is why you’ll rarely have payment problems there.

But if you’re working with a client outside of these platforms and they decide not to pay (even though you’ve fulfilled your end of the contract), you need to report them.

If the client belongs to a specific industry body, file a report there to make sure other freelancers don’t have the same experience.

Leave a Review

In addition to filing a report, you can also submit feedback about the client on sites such as Glassdoor, JobAdvisor, Indeed, or even Facebook. Wherever you can find the non-paying client’s online presence, you have the option of leaving the review.

It’s normal for starting freelancers to feel hesitant about leaving negative feedback about a client. But if you have done your job, and the client is clearly just trying to get free work, you shouldn’t let it slide.

6. Simplify How Your Clients Pay

E-commerce shops are not the only ones that can take advantage of smart and efficient payment solutions that let them connect with customers anywhere in the world. With PayMaya Checkout, for example, your clients can pay for your products and services on your website or even through your mobile app.

This service is tailored more for freelancers who have their own websites and are offering fixed-price services and products for multiple clients. The easiest way to streamline these payments is to use online solutions that can accept all major credit cards such as VISA, Mastercard, and JCB so your clients have every possible option to pay you.

Part of smoothening out payments is also proper invoicing. As we’ve mentioned above, you are a microbusiness, and as a business, you need to have an efficient invoicing system so your clients can pay you on time.

The better your invoicing system is, the healthier your earnings and cash flow will be, and the more you’ll thrive as a freelancer.

7. Minimize Errors

This is another important tip for anyone in the freelancing or remote work business. Any time you’re handling payments, whether it’s receiving one or giving one, it’s important to avoid mistakes. Invoice errors, for instance, can cause mistrust between you and your clients. Fortunately, many business entities and remote workers are aware that mistakes can and will happen, especially when everything is taken care of online.

Still, if you can manage to avoid making these mistakes, it’s better that you do. One reason to avoid mistakes is because it paints a better picture of how professional you are to deal with. Making one or two invoice errors probably isn’t a cause for concern, but frequent mistakes can seem deliberate and might breed distrust. This might discourage a client from hiring you again for future projects, which can seriously cripple your earnings.

8. Automate

Aside from having an efficient invoicing system, tech-savvy and established freelancers can also automate their invoicing processes to save time (both yours and the client’s).

With invoice automation, you enjoy the following benefits:  
  • Receive automatic invoice reminders for overdue payments 
  • Track billable time and create customized invoices to reflect that time 
  • Set up recurring invoicing schedules 

If you can automate your online invoicing, you can also automate other processes. There are several time-billing software at various price points that can help freelancers reduce the need to manually enter data.

You may not see the relevance of this now, especially if you’re new to freelancing, but the more successful you are, the busier you are likely to become. In fact, it’s not unusual for freelancers to forget to send their invoices to clients, which could be easily avoided with automation.

If you’re a little intimidated by the idea of automating, don’t be. There are numerous apps and online tools that make this very simple, so it’s definitely worth considering.

Effectively Managing Your Online Payments Doesn’t Have to be Hard

If there’s anything you should take away from this guide, it’s this: know how to use the tools and services out there that can make your life easier. Doing this not only frees up your time to widen your skillset and enhance your value, but it also reduces unnecessary stress for both you and your clients.

And if you’re new to freelancing, don’t get overwhelmed. Your priority, for now, is to know how to communicate your worth to clients and protect your cash flow. You can do this by conducting your business using freelancing platforms and drafting clear contracts that you and the client can refer to whenever you hit a roadblock. From there, you can consider the other tips shared in this guide to further refine your payment processes.

What about you? Do you have your own advice on online payments for other freelancers? Share your thoughts with us and the readers and let’s make the world a better and happier place for freelancers in all industries.

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