"I’m not broke, I’m a cash flow fanatic."

by Nick Usborne

Yes, this is something I say to clients and prospective clients from time to time.

Specifically, I make this comment if they raise their eyebrows at my request for partial payment in advance of starting on a project.

Why do I ask for part payment upfront? For a number of reasons.

1. It helps with my cash flow

In theory, if you have multiple clients, then jobs from different clients start and finish at different times, and your cash flow naturally evens out.

That’s the theory. But it doesn’t always work like that. Particularly if you have a couple of big projects in hand, lasting several weeks.

Suddenly you can find yourself going for weeks without a check coming in.

And, wouldn’t you know it, at the exact same time, a bunch of big bills arrive, and have to be paid.

So I always ask for some money in advance.

If it is a fairly quick job, I ask for half the money in advance, and half on completion.

If the job is going to extend over several weeks, then I usually split the total estimate into three parts: a third in advance, a third mid way and a third on completion.

This way, I always know checks are going to be coming in on a regular basis.

2. It protects you against not-so-nice clients

About once a year I’ll have a bad experience with a new client. A scope of work will be agreed, the job will be completed... and then suddenly there’s a problem with getting paid.

It happens to me very rarely. But it happens.

If I have billed and received half the fee in advance, at least I have something. Even if I fail to collect the final payment.

3. It gives me peace of mind

I just feel better when checks drop through the mail slot on a regular basis.

I would rather receive one check a week for a thousand dollars than wait a whole month, wondering when that one check for four thousand dollars is going to arrive.

Maybe that makes me sound a little weird. But I’m probably not alone in finding some comfort and reassurance in receiving payment on a “regular” basis.

The freelance life is filled with potential pitfalls, with no guarantees. We’re on our own.

And, as with any small business, poor cash flow can be a real killer.

So if asking for partial payment in advance of starting a new project makes me feel better, that’s what I’ll do.

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