No matter what kind of freelance work you're doing, contracts are part of everyday life as a freelancer, but the devil is in the detail. Covering all your bases before signing on the dotted line helps you to get paid on time, manage your client’s expectations and stay on top of your IR35 compliance duties.
Here are three reasons why an air-tight contract is the key to a successful client relationship.
Whether you’re charging your client a day rate or by the hour, being paid for your project is a top priority – after all, cash flow is king. That's why you should always sign a contract and agree a payment schedule.
Your contract should be clear about costs. Layout exactly what you expect to be paid and when. As a freelancer, you can either be paid when the project is completed or in instalments, whichever payment terms suit you and your client best.
When you submit an invoice, your client typically has 30 days to pay. For larger projects with higher costs, it’s not uncommon to agree to an upfront fee.
If you run into issues with late payments or clients skipping invoices, although not always required, having your late payment fees outlined in advance can help your case if a dispute arises or you need to chase debts.
What if a client uses my work without paying?
Setting out your intellectual property rights until payment has been made usually ensures your client can’t take what you’ve produced and not pay up.
So, if your contract specifically states that your client can’t use your work without paying you, and you suddenly see a graphic you created floating around on their social media, you may be able to take legal action.
We strongly advise you that you speak to a legal professional before you act. FSB members can call the legal advice line 24/7 for advice and guidance.
Managing client expectations
We’ve all been there: your client asks you to do something that’s not included in your vaguely worded contract, and they aren’t happy to find out this will cost them more.
Managing expectations is so important for a prosperous working relationship with your client. Be transparent about the work you’re doing, the scope of the project and how long it will take. The last thing you want is to end up doing more work without pay because your client expected something different.
Making sure you’re both on the same page about the project from day one can help to avoid any disputes. This way, your client won’t be able to ask you for ‘just one more thing’ if it’s not within the work you’ve quoted for.
Once you have agreed on a brief, you’ll want to make sure your client understands what they need to provide for you to carry out the project. For example, if you’re designing new marketing brochures for a shop, they may need to give you high-resolution company logos or pay for stock imagery.
Lastly, don’t forget about edits! Sometimes a project doesn’t always meet the brief in the first draft, or your client changes their mind after seeing an idea come to life. It’s best to factor in your time and costs for any changes, and be open about any additional charges.
Staying IR35 compliant
Your contract needs to make it obvious that your relationship with your client is on a freelance basis so that you can’t be seen as an employee in the eyes of HMRC - this is known as outside IR35. New IR35 rules in the private sector are coming into force from April 2021, so you’ll want to make sure you’re prepared.
Want to spend more time doing what you love?
Freelance life isn’t always nine to five, which is why we offer a 24/7 legal advice line. With downloadable templates covering everything you need, from contracts to invoices, you can spend less time on paperwork and more time freelancing.