Graham Smith, of ImJustCreative

How do you normally charge clients?
Typically I charge a flat or hourly depending on the job and also the client. Things like stationery, more predictable stuff will be flat rate. If the business card design is more adventurous, then I’ll usually charge hourly if I think the client is likely to be going backwards and forwards with ideas and revisions etc.

This applies to all other design work. If I am convinced a large design job will be relatively straightforward then I will usually try to negotiate a flat rate, but with a condition that if estimated time, proofs, extra word starts piling up then additional charges can be incurred. If however the job is more free flowing, more of a evolving over time type project, then a hourly charge applies. Obviously some indication of overall time in a ideal world is useful to give the client, but ultimately that comes down to how they deal with changes and revisions etc.

But moreover, I am not steadfast in my methods. A lot of it has to do with how I feel about the client, Im quite good at sensing positive or negative vibes, can they be trusted or not. And this so far has allowed me to be pretty flexible and chilled about payment terms which generally is appreciated. Personally, if you start blowing hot about insisting this and that, you can sometimes look like you don’t always seem to have much overall respect, and trust does come into that. As a designer you want to be trusted, but equally, clients also want to be trusted, it certainly is a two way thing that I often feel is not taken into account.

I’m sure a lot of people would initially say Im probably way to free and easy with this and far to trusting. It’s actually quite rare for me to invoke the ‘contract’ maneuver when taking on new work. It’s just something I have not really ever done. I think part of this mentality has been because most of my professional life I have been an employee so am more used to clients being invoiced after work completed with nothing more than a sales order, certainly no contracts. Admittedly bigger companies, but also bigger clients and more costly jobs to risk.

I think the first and only time I took a retainer was for a big holiday brochure I did a few years back, but again, this was insisted on by the client, not me and was half the estimated project cost.

ImJustCreative

What methods of payment do you accept?
Cash is king. Paypal is also good. I have sometimes thought about the adding of fee’s on top of the overall cost if the client ‘wants’ to use PayPal, but so far I have not. Often for me though, I choose to be paid by PayPal as it’s the easiest form of payment for my overseas clients, of which I do have a few. Quick, easy and pretty cheap given the alternatives through the banks.

Don’t take credit card.

Often I don’t have any choice over how I get paid, as I might be doing work for a larger firm that use BACS or something, so I tend to keep my mouth shut at these times.

Why?
As I mentioned earlier, I like to portray a easy going way of working from the outset. It’s something that has worked for me for a while and not once have I been taken advantage of. Not to say it won’t of course, but so far so good. I don’t like laying down to many ground rules, especially with a new client, I find this can have a positive effect on the professional relationship.

If the client feels that they are trusted themselves it can really help open things up to a different level, and this can be so crucial in professional relationships as it sets the tone for possible future projects.

If I ever come across someone that I don’t get a truly good vibe about then I will cautiously negotiate a reasonable payment structure, but one that keeps things relatively flexible but not so flexible that I could end up with egg on my face or worse. So it is often on a client by client basis, but so far, most clients have been totally trustworthy which is fantastic. Just don’t drop your guard.

ImJustCreative

Michael Martin, of Pro Blog Design

How do you normally charge clients?
I charge a flat rate, but make it clear that if the client requests more advanced features or extra revisions during the project, then there will be extra charges (So that they know the original flat rate isn’t always the end cost). I then ask for a third of that payment upfront, a third at a milestone about half way though, and the final third at the end.

Pro Blog Design

What methods of payment do you accept?
I use PayPal for everything. I’ve tried working with cheques, and not only were the charges ridiculous, but the hassle was unbelievable! Seems that a bank can simply not reply to a request for a cheque to be cashed when they’re in another country (Or at the least, delay their reply for a long, long time!), so you can spend months waiting on your money. That may not happen too often, but with PayPal, it never happens. And because I ask for a second payment part of the way through the design, I don’t carry on to the final stage until I have that payment. PayPal is instant, so it means we don’t lose any time waiting around for money to be transferred.

Why?
I work mostly with bloggers and small business owners. Larger companies may be used to awkward, tedious billing processes, but I don’t want them and my clients don’t tend to either. A flat rate and payment in thirds makes things very simple, so the client (and myself!) know exactly what to expect and when to expect it. Before we even begin, they can get ready to set aside money for the second payment. I’ve never had any trouble getting paid on time this way (And I don’t go onto the next stage of the project without being paid whatever was owed to this point. Great incentive to pay on time!).

Pro Blog Design

Vivien Anayi, of Inspiration Bit

How do you normally charge clients?
It usually depends on a client and the projects I’m working on. If it’s a big project, I charge a flat rate, though usually I specify the amount of hours it would take, and mention the discount the client gets when going for a project rather than a small amount of work here and there.

Usually I split the cost of the project into two or three payments, the first one is always paid in advance, and the last one after the completion of the project. If it’s an ongoing work with the same client that takes place after the completion of the major project, then I charge hourly rate and send the invoice out every month. There can also be some exceptions, like with one of my clients, who split the cost of the project into several monthly payments.

Inspiration Bit

What methods of payment do you accept?
Once again it depends. I used to accept cheques only, then I had a few local clients who were wiring me money via Email Money Transfer that’s supported by all major banks in Canada. Now I’m getting more international clients and find that PayPal works best in such cases.

Why?
I would recommend everyone to find what works best for them. I always try to accommodate every client I work with and find the payment option that’s mutually convenient.

One piece of advice I have for handling those clients who don’t pay on time: when preparing the invoice, after the total cost add a line that mentions a certain discount (say 5%) that the client would get if the invoice is paid by the due date, otherwise the client will have to pay the original total. It worked really well for me. I find this method more encouraging, rather than charging the client late fees. Who wouldn’t like to save some money by paying on time?

Inspiration Bit

Adelle Charles, of Fuel Your Creativity

How do you normally charge clients?
I normally charge clients per project if it’s a large one. They get 2-3 mockups, revisions and then one final revision (all outlined in the contract). Anything after the final revision is billed per hour. Most clients I take on, I require a 40% deposit before any work starts. The final amount is billed after completion and I give 30 days.

Fuel Your Creativity

What methods of payment do you accept?
For local clients I accept cheques and PayPal. For clients I have found through the web, or I outsource to, I use PayPal only, it’s quicker and easier.

Why?
Honestly this setup works for me and I know every creative person has a different way of handling clients. I think it depends on your workflow if “my” way would work for you or not. I like it because everything is stated clearly within the contract and if you stick to it, the work is produced quickly and efficiently for the client and if they have deadlines / approvals and payment that they are aware of up front you usually have less chance of “skirting around issues”.

Fuel Your Creativity

Jon Phillips, of Spyre Studios

Spyre Studios

How do you normally charge clients?
I usually charge per project though I will sometimes charge hourly depending on the work that needs to be done and who I work for. I have some long term clients that I charge hourly and invoice at the end of the month, but in most cases it’s a flat per project rate. I usually ask for 50% in advance, but not always. I ask for 50% in advance if it’s a returning customer or someone I know fairly well.

What methods of payment do you accept?
Most of my clients are ok with Paypal but I also accept cheques. In the event my client wants to pay with a cheque I ask for 50% in advance and wait till the cheque clears at my bank before I start working. But in most cases Paypal is the #1 choice.

Why?
Well I’d recommend charging a flat per project rate (and ask %50 in advance, especially for new clients) simply because I find it’s a lot easier to give a quote for the whole thing rather than give an approximate price based on the amount of time a project may take. I know how much time this or that will take me, I just tell my clients what I can and will do and how much I charge for it. Clients know exactly what they’re paying for and what to expect. Like I said in my previous answer I also have clients that I charge hourly, but these are usually long time customers that need my services on an ongoing basis.

Spyre Studios

Jeff Fisher, of LogoMotives

LogoMotives

How do you normally charge clients?
With smaller identity clients I usually estimate projects at a flat fee rate. With large corporate clients my fees are most often based on an hourly rate – simply because the corporate approval process usually is much more time-consuming, involves many usually unnecessary meetings, and requires so many levels of approval. Basically, design-by-committee = higher project cost. Time is a limited and valuable commodity for me, and I want to make sure I am compensated for all expended on any job.

For years my project agreement has required a 35% project estimate deposit in advance prior to beginning work on a project. At the first of the year I will be raising that advance to 50%, simply due to clients seemingly getting slower and slower to pay project balances in these economic tough times.

Years ago I offered a 5% discount to clients for paying upon delivery of the completed project. I thought it would encourage smaller businesses to pay more quickly. Instead, the larger corporations – with much larger project invoices – would jump at the opportunity to save the money. I ceased the practice about ten years ago – it was costing me too much possible profit.

In the past I have had retainer agreements with long-term clients requiring a great deal of work on a regular basis. I now have only one client for which I execute design work on a monthly basis – and I just provide them an invoice every 45-60 days, depending on the amount of work done.

What methods of payment do you accept?
I’ve never accepted credit cards or PayPal, as I might get one or two requests a year. Most of my clients pay by bank cheque. With international clients, I have used bank wire transfers and international money orders.

Why?
My methods have worked for me and my clientele for 30 years now. If a number of future clients requested other options they might be considered. I would recommend that others make use of the methods most effective in resulting in efficient and timely payments to their own business.

LogoMotives


In case you missed them, part 1 and part 2.

A few other resources

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November 16, 2008

Comments

It seems as though many designers ask for a 50% deposit. I was quite surprised by this when I read the first part of this series of articles but on reflection I would say this is fair. I really enjoy visiting the sites of other designers to see the difference in styles. Thank you very much for a most informative series of posts.

David
Super article, really has helped me get a handle on some aspects of my own charging process. As Firebubble mentioned, it’sgreat to be able to read honest account’s of this side of business to see if you are doing anything remotely wrong.

I am still happy with my methods, mostly because it just works for me. But now I can incorporate other strategies should I need them purely because I have read them here from a bunch of people I truly admire rather than some random book.

Im always open to change which is what makes freelancing so wonderful, nothing is set-in stone if you don’t want it to be without having to pass it through multiple layers of directors. :)

Thanks again
Graham

Thanks for the compilation. Interesting read — it seems most of us do a 30-50% down flat rate for large projects. I find that clients are often open to 50% down for smaller projects, and that psychologically, 40% often sounds “more fair.” In the end, you get paid the same.

I think invoicing is something that you learn as you go. After a few clients burn you and a few others take too long to pay, you will develop a billing schedule that fits your business.

I like the idea of an on-time payment discount — that’s a great way of turning the convention around to be more positive (and I assume you would adjust the project cost by that 5%).

I always charge a flat rate, I would charge for hours, but I guess it depends on the geographical zone you are practicing on. In my city, no one is used to pay an hourly rate, they want to know an exact ammount… But I do calculate how many hours aproximately it is going to take me to finish a project, then I give the client a number, once the client agrees, I usually ask for a 50% upfront, but I have lots of trusty clients, sometimes busy ones, so instead they pay me 100% upfront or after I finish the project. Of course this is a practice I wouldn’t recomend, because not all clients are easy with payments. So, in my opinion, the best would be to charge them a 50% upfront, and the rest upon delivery.

I also, rarely, charge 25%, to insure im getting paid at least the least, then when I present a mockup I charge another percentage… sometimes 25% more or even the total ammount!

Thanks for the articles David, but someone should tell these guys it’s cheques not checks! for interviews about pricing/billing advice I found this amusing/strange.

Graham, I’m glad the series has helped. The freedom is a real draw for me too, being able to make your own decisions without levels of restriction. Thanks for promoting the post on Twitter. Much appreciated.

Zack, invoicing was something I’ve learnt as I go, and I haven’t fully streamlined it just yet (looking around at various applications).

Jonathan, the American spelling is ‘check’, though it would’ve made sense to edit answers for consistency.

Brian, I’m glad you contributed.

Said, good of you to offer your own insight.

David,

This is a VERY informative post and right on time for me. How to charge clients is always a question. It’s good to get lots of opinions and you have done that in detail with this post. Great job and thank you to the contributors!

David,

These posts and your blog in general have been a great resource to me as I am quickly getting a grasp on my freelance career. I have been an in-house graphic designer for a little over a year now, but my goal has always been to pursue design on my own some day. However, recently, through word of mouth, I have had quite a large workflow in freelance. If it weren’t for the amount of projects I have lined up, I would already have my website up but it is something I’ve yet to get to. It is my main goal, but in the meantime I’m building up some great portfolio pieces. When it comes time to create my site, I’m sure I will reference your blog as a resource. Again, thanks for this and what you are doing for the design community!

David,

That was quite the educational bit on how designers charge clients. Having never charged a client formally I can’t deny that I am afraid to make such a claim of requiring an up-front amount. I guess it’s for the better if I do that, though.

Daniel

Great series of articles.

I am just starting to get into more design (I usually do film and video work), so I am doing a lot of work for friends and family. I never know how/what to charge them and I feel weird charging them 50% up front or even charging them what I think my services are worth. Also, since I am a student I feel like people expect cheaper work, but still good quality.

It is a tough line to walk.

Thanks for posting this series. I am on the other side, looking to have a blog upgraded and redesigned, and it helps to see the fee-setting-and-collecting process from the designer’s point of view.

Once again, a great resource – thanks, David! It’s always great to be able to read straightforward dialogue about the business aspects of freelance design, especially because each designer/client/project is so different, and when it comes down to it, the numbers are never concrete. I’ve been freelancing for years now, but I’ve always had a hard time asking for a deposit with new clients – but that’s something I’m getting over quickly, largely thanks to these posts!

Daniel, it’s definitely better to an advance. You’re open to a fall if you don’t.

Eric, working with friends / family is slightly different. I’m more apprehensive from the outset, the last thing I want is a rift over some design work.

Have a great weekend everyone.

David,

Again I find another great post from you on a subject that is near and dear to every designer.

At my design studio we are trying to come up with some good base prices for common items that need designed. I will certainly be scouring your site for some additional info in that respect.

As a side note, I just wanted to tell you how impressed I am with the way you follow-up with the comments on your site. In doing so, you seem much more tangible and engaging… something that I find very encouraging.

Keep up the great work!

Great article. I have been wondering whether to form estimates based on the hour or the project. What happens if I go longer than the time estimated, what if I’m more efficient? Do I give a refund? I am finding that basing my services on a hybrid approach is working. First I determine what I would like my hourly rate to be, then I multiply that by what I think it will take me to do the project. Finally, I try to keep in check with industry pricing, making sure I’m not cheating myself or the client.

This is a good article series. Interesting to see how others handle the financials. I too charge flat pricing with a 50% upfront deposit, 25% after a major milestone like design approval and the other 25% after completion, which I allow only 48 hours.

A great topic would be, “How 20 Designers Handle Bad Paying Clients” as I recently had to deal with a client on a monthly payment plan, decided he wanted to stop paying. Say… this is a topic I might write/interview about.

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