How to get paid as a freelancer (easily and on time)

Statistics by the Freelancers Union show that there were 56.7 million freelancers in 2019. And each week, these freelancers spent over 1 billion hours working. It’s clear: freelancers are everywhere, and freelancing isn’t going anywhere. 

The life of a freelancer is an exciting one. You set your own working hours, work from anywhere, and choose who to work for. You're your own boss! However, you're also your own accountant, which isn't as fun.

Whether you get paid per hour, per project, or you’re on a retainer, it’s important to consider how you will get paid before you begin working. Choosing a good payment system can make the difference between getting paid on time and getting paid late.

In our previous post, we talked about how to be a freelance writer. Today, we’ll talk about how to get paid as a freelancer. 

Here’s how to go about it, from payment methods to best practices when communicating with your clients.

How to receive payment as a freelancer

1. Use Xe money transfer

With over 1 million customers around the world, Xe is a popular money transfer service. It’s used by many freelancers and expats around the world. Transferring money with Xe is affordable, safe, easy, and quick. 

Here’s how to get paid with Xe money transfer:

1. Open an Xe account.

2. Provide your bank account details to the sender, along with your name and address.

3. Wait for the money to arrive, typically within 1-4 days of payment.

Using a money transfer service like Xe is the best way to ensure that your money is safe, and that you receive it as quickly as possible. Xe is also a much more affordable option than banks or PayPal.

2. PayPal

PayPal has been in operation for close to 2 decades and many freelancers use it. Receiving money from another PayPal account is instant. The online payment system has an invoicing feature that allows you to customize and send invoices for free. Once you create an invoice, PayPal emails your client a link to it so they can pay you. The client can pay you securely with a debit card, a credit card, PayPal Credit, or PayPal.

You can set a time for the invoice to be sent or create recurring invoices. If the client doesn't pay on time, PayPal will send reminders. 

However, PayPal charges you a percentage of the money you receive and a fee for every transaction. This significantly reduces the amount you receive. For example, if you’re in the US, you’ll be charged 2.9% plus $0.30 USD for every payment you receive. Also, PayPal has a tendency to block user accounts temporarily.

3. ACH direct deposit

ACH refers to Automated Clearing House. It is a type of electronic funds transfer made by a business or government entity to a person. Some companies prefer this payment method because it is convenient, fast, and has lower processing fees compared to other options. 

The best thing about this payment method is that the client pays the processing fees, which vary from institution to institution. You only need to provide your bank account details. You can offer ACH as a payment method when using invoicing software. 

However, one disadvantage with ACH direct deposit is that the deposited money isn’t always available for use immediately. Compared to wire transfers and online money transfers, ACH direct deposit typically takes much longer.

4. Payoneer

Payoneer is an American financial services company that offers digital payment services and online money transfer services. You can send money in 150 world currencies and receive payments in your home currency. Payment processing is quick and you get your money in 2-6 hours. But this is if the sender also has a Payoneer account. 

Freelancers in America, China, UK, Japan, and Europe don't have to pay extra fees for currency conversion. If you're not from these areas, you'll pay an extra 2% for currency conversion. Also, if your clients pay you with a credit card or eCheck, Payoneer charges you 1%. But getting your Payoneer account approved can take a while. 

5. Paper checks and eChecks

A paper check is one of the oldest methods of getting paid. Some companies and people still prefer it, especially for large invoices. However, it’s slow and inconvenient because receiving checks via mail takes very long. The check may also get lost, stolen, or damaged. And after depositing it, it may take a while to clear. 

The only good thing about paper checks is they have no processing fees. You also get your money quickly if the check is given to you instead of being sent over. However, if you prefer not to live in a bygone era, request your client to pay you via eCheck.

An eCheck is a modern version of a paper check. It is processed faster than a paper check and reduces waste. When someone sends you an eCheck, money is electronically transferred from their account and deposited into your account after passing through the ACH network. However, an electronic check carries a few disadvantages, like the potential for fraud.

6. Credit or debit card

Almost everyone owns a debit card or a credit card and uses it to make payments. Your clients can pay you using online card payment systems like Square, Stripe, Wave, Google Wallet, and Paypal. You don't have to worry about the payment’s safety because these payment systems are secure. However, they charge different fees, so it’s important to do a little research before you settle on one.

If there’s a lot of money involved, avoid credit and debit cards. Some debit cards have a limit of $1,000 to $3,000 USD daily while most credit cards have a limit of $3,000 USD.

How to get paid on time as a freelancer

1. Get it in writing

Ensure any communication between you and the client is written down for future reference, and don't begin any project without a contract. It should be as detailed as possible and the terms should be clear to both of you. 

A contract is a legally binding agreement that helps you to avoid problems in the future. It sets the right tone for your working relationship. Some clients may create a contract for you to sign or you can create one and customize it for every client. The contract should protect both of you.

Make sure the contract specifies: 

• The terms of payment

• The amount to be paid

• The work schedule.

It should also specify what will happen if you don't get paid on time. You can charge an extra fee for any overdue payments. 

2. Ask for a deposit

Most freelancers have come across clients who don’t pay after their projects are completed. To avoid this, always ask for a deposit before you start working, especially when you’re starting new projects. When you ask for a down payment before work begins, you enter the working relationship from a position of strength.

If you’re working on a freelancing platform, ask for milestone payments for longer projects. It may be hard to ask for an upfront payment when you're a newbie, but with time, it will come naturally.

3. Use an invoicing system

Identify who is in charge of paying you long before you deliver the work. Get a name, a phone number, and an email address. This will save you plenty of time. Also, use an invoicing system as creating invoices from scratch is hard and time-consuming. 

An invoicing system captures all the important details and eliminates the repetitiveness associated with invoicing. It takes less than 5 minutes to create an invoice with FreshBooks, QuickBooks Online, and Wave. The invoicing software keeps track of unpaid invoices and lets you know if the client viewed your invoice. Choose one with a user-friendly interface that allows you to manage your entire freelancing business. 

Other popular invoicing software include Square Invoices, Xero, Honeybook, and Zoho. 

4. Make it easy for clients to pay you

To prevent delays, be flexible when it comes to payment. Some clients prefer eChecks while others prefer credit cards. Provide multiple payment options so they can choose the one they’re most comfortable with. You can accept credit card payments, include a “Pay Now” button on invoices, and give instructions for paying by check.

Most invoicing systems allow you to choose your preferred payment method(s). So, your clients should be able to pay your invoice just by clicking a button. The most common forms of payment for freelancers are PayPal, checks, credit cards, electronic funds transfer, accounting software, and Square Cash.

5. Fire clients who always pay late

Can you fire a client? Аbsolutely!

If you've completed the work, sent an invoice, but have to follow up numerous times before you get paid, it’s okay to fire the client. Some clients may decide to ignore you for weeks or months. When money owed to you becomes a bad debt, you can write it off. 

Drop clients who always pay late as you’ll go broke trying to accommodate them. Be polite but firm with clients. Remember, freelancing is a business, and a business must be profitable to survive. 

Get paid with Xe: the fast, affordable option

Xe offers you a great way to get paid without losing a lot of money in fees. You can receive payments wherever you are in the world--in different currencies. So, if you’ve been planning to start a nomadic lifestyle, don’t wait any longer! Sign up to get started today.