Hi everyone! Just wanted to get your thoughts on this, are there "best practices" in charging clients for design projects?
- per Hour or per Project?
- payment terms (for down payments, what is generally an acceptable amount to require? 50%?)
- payment methods (checque, Paypal, etc.)
What are some of the problems you've encountered when dealing with payments?
I've heard some horror stories about clients not paying on time, or not paying at all. So let's help each other out!
Hey Jarmaine -
I read your post and found it to be an interesting topic, one that you don't really learn much about until you find yourself in the position where you need to figure things out. Here is what I tend to do:
I will charge an hourly rate for design work unless the client has a limited budget, in which case I will accept a single payment for the whole project. When doing this, it can be tough when the client asks for endless rounds of changes. For this reason I will have to make clear to the client that additional revisions will cost extra before starting on the project. If they are okay with that then I will generally ask for 50% of the costs up front.
I had a client once that I did a freelance project for, and she was a "friend" of the family. After the project was complete it took 3 months for them to send me the payment for my work which was incredibly frustrating. Since then, I always ask for half up front.
I tend to ask for cash or a check as PayPal usually takes out a portion for fees, which is no good for the hard working designer. Overall, these methods have served me very well and the only real variable is how much to charge hourly. This can fluctuate depending on the budget of the client, and also depends on how much experience the artist has.
Hopefully this is somewhat helpful, but I would love to hear what other people have to say also!
A contract would be beneficial. In some situations, the use of a contract could determine the success of the project.
Hey, This is something that really changes based on what the designer feels is right I guess.
I very rarely ask for a deposit, but that is because I am picky about who I do work for, my work is 90% of the time referral work and I can usually be a good judge of character, if the work comes from elsewhere I approach the project differently.
I do have a contract written out that I can tailor to each client if I do not feel 100% comfortable, and then I will also ask for a 45% deposit of the estimate price. I find 45 a good number as it visually feels a lot less than 50%
As far as price goes I work as hard as I can to get a very detailed brief, in perfect scenarios the brief is set in concrete and I can judge how long I will spend, and more to the point, how much I think that piece of design is worth.
If this is not the case I will set a price per hour figure and then keep track of my hours spent on each project, giving the client updates if the project goes beyond 5 hours - This stops any 'shock' figures appearing. I also take time to explain why certain things take a lot longer than others.
With payment methods I quite often work with direct bank transfers, the details they need to transfer money are safe to give out. Paypal is ok IF you need to use it, but yeah like someone else said, they take a cut, but it might be worth it to feel that little bit more 'safe' early on.
I have not had a client not pay on time, if you pick your clients correctly you should not have too much trouble here. If you do I imagine a second invoice each 2 weeks with increased charges on would do the trick - Just make sure that its written into the contract. I'm pretty sure there is a fair trade policy that means you can only charge a certain amount for late fees in the UK.
Working for friends of family etc is a great way to get further work via recommendations but make sure you keep it professional - This is how your making your living after all (hopefully!)
I charge per hour. I have a fairly good sense of how long various jobs will take me and I'm usually pretty close to whatever my estimate/bid is. Charging hourly and giving estimates also allows me to price myself out of jobs by raising both my hourly rate and the hours it will take if I think a particular person/client will be more trouble than they're worth. I'm in a unique position where I don't have to take every job that comes my way and I'm a pretty good judge of character when it comes to trouble clients.
I do mostly web design and I've found that asking for any percent of the cost upfront really turns people off and creates a more tense business relationship. I've decided to break the service into 2 parts which are simply Design and Development. I require %50 of the total cost of the project due after a design has been approved by the client and they don't receive a usable copy of the design until that payment is made. I require the remaining %50 at the end of the project.
I accept all kinds of payments including paypal if I have to. I try to ask the client at the beginning of the project which payment method they plan on using and if it has to be Paypal I'll figure the Paypal fee into the total cost.
One problem I've had was a particular client having multiple changes throughout the project to the point of completely redesigning one site 3 times. It was one of my first freelance clients and I was absolutely consumed by the need to make the client happy to the extent of actually giving work away for free. After that experience I added another thing to my contract. Now a client can only give me 2 sets of changes without the price of the project going up. The client can give me as many changes as they want in a list but they can only do it twice. If they want more changes after the first two instances they're charged for the hours those changes take on top of the original cost of the project. This REALLY helps in keeping my hours equal to what I estimated and forcing the client to tell me exactly what they want in at least 3 tries. ;)
I charge by the hour, and same with the company i work for. Personally i dont collect a down payment because the jobs i do for my clients are not overly huge. If they were larger i might request a down payment. The company i work for however does collect a 50% down payment.
My clients have been great for paying on time. which i am exceptionally happy about because i have seen how bad they can be at paying through the company i work for.
I do know of places that to not charge by the hour, they have flat rates for their various services.
I think every one and every business just needs to find a way that works best for them.
While this comment might not be as helpful as I would like it to be... I worked a good amount in-house before going fully freelance. In lieu of that, I have a good prediction for the time it takes for various projects. As such, I took the knowledge I had and created a spreadsheet of general pricing per project for quotes.
The quote based off this experience is what I use as a rule of thumb for pricing, with some adjustments depending on the project. One note though, I always make sure that if the client creates a series of changes that results in an increase in the duration of a project, I will charge additionally per hour (roughly) beyond the initial quoted time. I inform all clients ahead of time of this possibility.
So I guess in summation, I will quote a price with a pre-determined time - with the understanding that additional time will cost X amount per hour (pro-rated).
The one difficult thing in truly establishing the time spent on labor, is your style. This is why I do not like to charge by the hour because very often, I find myself making breakthroughs on a project while sketching on the train, partaking in a beverage at the local coffee shop or enjoying a walk around town.
As for deposits, this is something I do like to do, but sparingly. Sparingly in terms of percentage. Never more than 50% because, you never know if a project will go sour or not, so its good to have something in place to cover at least the early work done before possible negative outcomes come to light. But receiving to much can lead to arguments over reimbursement. Generally its 25% for my projects. Funny enough its the individuals closest to you that would require this more often than completely new clients. I believe its the comfort level and the higher difficulty in bringing up "money" to those close to you.
For payment, Paypal is nice, but the fees can play a role in your actual take away (or quote)... I never accept check. Its always certified funds or no project.
In the end, its whats most comfortable to you. And after a while you will get a good feel for your pricing and how you wish to pursue the payment. If your uncomfortable with predicting how long it takes you, play with some personal projects to get a feel for time spent, then once you are confident with your efficiency and your projections, you can break down how you want to charge, which is different for each designer. One thing to never do is back yourself in a corner by making your pricing structure static, because one seemingly similar project can be very different from the next.
I hope that helps in some form or another. When going freelance, this was a very difficult area of the business plan to break down. Sadly its also one of the lesser discussed aspects of freelance design.
My practice is for new clients per project and be sure to set a deposit of 30% that shouldn't frighten even the most frugal of clients. Once a working relationship has been established over time then you can charge an hourly rate. Most clients in my experience have no idea what design involves. Therefore you must at all times explain the process that you and the client will be going through from comps to final delivery. Once they understand the process they won't think they are being taking for a ride.
Getting paid on time or not at all is always a tricky business however once you have been in this business for a good amount of time there are red flags. Try to always be in a business frame of mind. Some clients become a little to friendly telling you about there day or what they made for dinner last night. When these situation come into play the client in their mind believe there is a little wiggle room when it comes to money; because you are so nice and will understand. It doesn't have to go as far as Miss or Mr. Johnson but be sure to keep you professional pose.
Contracts are always good if it is something like Web Design and Development with firm milestones. However most clients are aware that someone freelancing may not have the resources to come after them legally if they don't pay.
In a nutshell a career as beautiful and rewarding a media design can be brutal when it comes to the financial end of it all. Try not to concentrate so much on the monetary issue the money will come it always does. Just stay true to your craft and the right clients will magically appear and when they do treat them like gold. Last I checked its trading a $1,823.00 an oz.
After carrying out a salary survey in the Eastern region, we found the average wage a Junior Graphic Designer could expect was between £9 - £12 per hour (with up to 2 years' experience) or £18k - £22k as a permanent salary.
Someone with 3-5 years' experience would charge £15 - £18 per hour / £25k - £29k per annum.
For advantages and disadvantages of being freelance, check out this useful link: http://www.branddigitalandcreativejobs.co.uk/news/view/126
Hope this helps and good luck!