Recently lost a big client due to a poorly structured contract. It’s got me thinking about how to better protect my income going forward. What clauses or terms do you include in your contracts to safeguard your revenue? Curious about both common practices and any unique approaches.
Keeping it simple is fine for small jobs, but it won’t cut it for bigger clients. I always include payment terms, kill fees, and scope creep clauses. Payment terms specify when I get paid and late fees. Kill fee covers me if they cancel mid-project. Scope creep clause lets me charge extra when they keep adding work. These basics have saved my ass more times than I can count. Worth the extra effort to get them in writing upfront.
Contracts are a pain. I keep mine simple. Just list the job and price. If they don’t pay, I don’t work for them again. Works for me so far.
Been there, lost clients that way too. Painful lesson.
After some trial and error, here’s what’s working for me:
Payment schedule tied to project milestones. I get paid as I go, not just at the end.
Clear scope of work. I spell out exactly what I’m doing and what it’ll cost. Anything extra? We discuss and adjust the price.
Kill fee if they cancel. Usually 30% of the remaining project value. Keeps them committed.
Late payment fees. 2% per month after 30 days. It’s amazing how quickly invoices get paid with this.
I also started asking for a deposit upfront. 25% to book the job. Weeds out tire-kickers.
These aren’t perfect, but they’ve definitely helped. My revenue is more stable now.
One last thing - I review and tweak my contract every year based on what worked and what didn’t. Always improving.
I’ve found a few key things help protect my income:
Upfront deposits. Even 25% locks in commitment.
Clear payment schedule. I tie it to project milestones.
Late fees. 1.5% monthly after 30 days gets invoices paid fast.
Cancellation clause. I charge 30% of remaining project value if they bail.
These basics cover most issues. I keep it simple but effective.
Contracts are tricky. I’ve learned the hard way too. Here’s what works for me:
- Milestone payments
- Cancellation fees
- Clearly defined deliverables
Milestone payments keep cash flowing. I break projects into chunks and get paid as I go.
Cancellation fees protect me if a client bails. Usually 25-50% of the remaining project value.
Defined deliverables prevent scope creep. I list exactly what I’m providing. Anything extra costs more.
I also throw in a late payment clause. 1.5% interest per month usually gets their attention.
It’s not foolproof, but it’s saved me a few times. Might be worth running your contract by a lawyer too. Peace of mind is worth the cost.
Contracts? Nah I just shake hands and start working.
Never had any big issues yet.