Freelance: which billing method to choose?
September 19, 2019
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Freelancing is a life choice that appeals to more and more French people. Being self-employed and taking on only interesting assignments are the main objectives targeted by freelancers.
To make a good living, besides finding assignments, one has to think about an efficient billing mode that would ensure optimum profitability.
Befreelancer explains the billing methods available to freelancers:
Time-based billing
Time-based billing is established according to an average daily rate (ADR) or an hourly rate set in advance with the client.
Most freelancers favor this billing method since it enables them to evaluate with precision the profitability of a project, and thus to avoid making wrong calculations and consequently waste time and money.
Task-based billing
It is a flat fee based on a predefined budget and a mission statement mutually validated by both parties: the freelancer and the company. Delivery must be made at a set date.
For this type of billing an accurate time estimate regarding the project completion is primordial.
Task-based billing is a billing mode that is quite pleasant for the company, which knows precisely its objectives and its expectations in advance.
Outcome-based billing
Outcome-based billing rests on the negotiation of a remuneration that is entirely connected to the final outcome. This type of billing can be adapted to very specific assignments where the client expects a lot of results. For the freelancer, this means that they should have confidence in their skills and the results of their actions!
Outcome-based billing often comprises a fixed income (under the flat-fee rate or time-based pricing), which on the one hand guarantees payment to the freelancer—regardless of the final result—and on the other hand, gives the client the possibility to negotiate the fees downwards if the expected objectives are not met.
The down payment
The down payment consists in the fact that the client deposits a percentage of the total amount from the get-go and the rest of the amount is paid once the assignment is fully carried out.
For the freelancer, the down payment attests to the reliability of the company with which they are about to collaborate and it allows them to get a payment without having to wait for the first settlement date or the delivery.
By using our Befreelancer platform, you can benefit from secure payment. Once the assignment is completed and the client has confirmed it, as a freelancer you are guaranteed to get paid.
In reality, as soon as an agreement on the price has been reached, the company transfers the full amount to our platform which will transfer it to its freelancers in its turn.
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