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How should I invoice for a fixed price project?

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Chris Park
How should I invoice for a fixed price project?
on Nov 8, 2018 at 8:11:05 am

Hi there!

First of all, thanks so much for sparing your precious time for me :).

I'm a motion designer in Sydney with about a year of experience in the industry but have never done a fixed price freelance work before.

But this time a client (whom I've worked for as a casual on hourly bases a few times before) has asked me to deliver a project for a fixed price, which I said yes, but I'm simply lost on how to handle the "getting paid" part.

It is quite an urgent project and the given timeline is only 5 days from start to finish, but I'm expected to spend a lot of hours a day.

I first thought of invoicing 50% of the total price up front and the remaining 50% at the completion but considering the time frame both of them would be paid as a whole anyways.

So, I'm thinking of asking for a payment as a whole at the completion of the project. and if the project gets cancelled in the middle of it, claim for the hours I've spent so far by hourly rate.

I was wondering if it's a real enough plan, or is there any recommendations or insights on how these matters are normally handled?

Also, Is it necessary to write down a contract, or would it be okay as long as I have agreement on the above terms in the email comms?

Thank you in advance.

Cheers!
C


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Mark Suszko
Re: How should I invoice for a fixed price project?
on Nov 8, 2018 at 3:16:41 pm
Last Edited By Mark Suszko on Nov 8, 2018 at 3:41:44 pm

You're probably right that the short turn-around time makes it impractical to break the payments down into a down payment and a final. Though that's always the best way to go IMO.

So you are going to have to be tough and uncompromising at the other end, and do NOT give up the clean, finished version until they put a check in your hand. Bill them TODAY, NOW. Start the payment clock running. You set a fixed price so you must know the number. Five days is plenty of time to cut a check for a fixed amount, if they *want* to. If they tell you that's not true, they are lying.

Get as much in writing as possible, even if it's just email. Leave the correspondence as a chain with the previous messages left in. Actively ask at multiple points: "This is how I understand what we discussed; do you concur?" You can make a message mid-week, saying: "Here is a sample to show the progress on the deal we made for program x, it will be delivered Friday in exchange for $n amount in cash or check. Is it looking the way you wanted?" This gets them on the record, regarding the amount and delivery terms, when they respond. If they respond elliptically or not at all, it's a warning sign.

In American courts, contract law looks for three things to determine if a contract was valid; offer, acceptance, and consideration. Consideration means, did any kind of money or thing of value, even a token amount, get exchanged as part of the deal. A down payment or starting fee fills that role. Documenting the email as I described gives you some evidence on paper that there was an offer and it was accepted.

They may tell you you have to wait 30, 60, or even 90 days to get paid. It's up to you, and that's pretty common, but I'd fight to get paid sooner. Otherwise, you're a bank, loaning your own money out at zero interest. If they insist on 30 days, offer them a discount for early payment (which you already had figured into your bill in advance because you're not an idiot at this game). I understand some companies bully providers and try to take the discount without making the early payment. If they did that to me I'd never work for them again, except for cash in advance.


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Greg Ball
Re: How should I invoice for a fixed price project?
on Nov 8, 2018 at 9:46:55 pm

Hi Chris,

We usually require at least 50% to start the project and the balance is due once they approve a watermarked version, and before we release the final version. We also request that they provide credit card info for payment. We use PayPal.

Yes ALWAYS have a contract. This protects both parties and everyone is on the "same page" for the project.

Greg Ball, President
Ball Media Innovations, Inc.
https://www.ballmediainnovations.com


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Stephen Smith
Re: How should I invoice for a fixed price project?
on Nov 12, 2018 at 8:04:04 pm

You have worked with the client before. Have they ever not paid you? Have they been a bad client? If you said No then I think you have a good relationship and don't need to worry. If you answered Yes then why in the world are you still working with them?

Stephen Smith

Utah Video Productions

Check out my Vimeo page


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Mike Cohen
Re: How should I invoice for a fixed price project?
on Nov 13, 2018 at 7:28:53 pm

On a short turnaround project, at the very least get a written contract and send an invoice for whatever the payment terms dictate, and another invoice upon completion if it was split into parts.

The main drawback of getting 100% upon completion is if you need to incur any costs out of pocket. Narrators or freelancers often want to be paid immediately, or certainly faster than you will be paid. you are not a bank, don't get stuck having to pay your bills while waiting to get paid.


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Chris Park
Re: How should I invoice for a fixed price project?
on Nov 13, 2018 at 11:45:41 pm

Thank you so much, everyone, for your kind and valuable insights.

I have billed them prior as advised and got the contract written down.

So far it's going as smooth as silk!

Thanks again for all of your thoughts. It really helped me a lot to get my head around the actions I have to take.

Cheers,
Chris


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