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One of the mistakes I made a lot in the past and I have also done recently is how I handle freelance design cancellations.
For the first year and a half that I freelanced, the majority of my work was working inhouse for design agencies. Sometimes a design agency would contact me as much as a few months in advance and book me for holiday cover for someone who was going away. I would book the job in my diary and take that design work/income to be set in stone (guaranteed). The problem arose when either a week or few days before the week/two week freelance design job was due to start I would receive a call to say I wasn’t needed anymore. Maybe it was because holiday plans had been changed or the studio was quiet and didn’t need an extra pair of hands after all. That left me, having possibly turned down other freelance design work, with the prospect of potentially no work and no income for a week or two. I was naive and should have built a cancellation fee into a booking, so that if a freelance design booking wasn’t cancelled before a certain period I could at least charge a partial fee for my loss of earnings. For those of you starting out I would strongly advise that when taking a freelance booking in advance that you advise the client that there will be a cancellation fee if the job is not cancelled by a reasonable date.
Fortunately I now work at home and so this doesn’t happen very often, but still every now and again I get caught out. It’s a difficult thing to manage, you don’t want to put people off but you don’t want to be left in the cold with no work either.
How do you handle freelance design cancellations?
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21 Comments
That’s really good advice. Thank you!
So far I haven’t had a cancellation affect me like this but I know it could soon.
For time being, i’m not doing any freelance. But maybe later. What a friend use to say :”Never take things for granted”
This is not only true for freelance work. It happens just as much when doing a job as a company directly for clients (sometimes even mid-project).
To counter-act this we always charge 50% of the full invoice when they approve the quote. For us, this works well.
That’s great advice tara. I always make the client sign an estimate. In the terms of the estimate it states that if the client cancels after 24 hours from booking the job, the client owes 50% plus expenses. I always point it out to the client before they sign and no one has canceled after signing an estimate. I don’t usually work in house so as you know every project takes research and a lot of client interaction. If somebody cancels, I don’t want to have done all that work for nothing. A lot of freelancers don’t even make people sign anything- especially here in Miami. It’s all just a , “Okay Sure”. I don’t play that game, sorry:)
Hi Rachel, glad it’s useful.
Vincent – good advice
Hi Joost – I always break my jobs down and charge as I go. For instance I do concepts, then bill for those – then artwork and bill for that – then amends (if excessive as agreed with client).
Hi Justin, I must admit I don’t have a contact for people to sign, but most people I work for are regulars now.
Really great advice, thankfully I have never had any cancellations yet.
Oh, this is really great advice, Tara! Thank you!! I never would’ve thought about this and it’s so wonderful that more experienced freelancers like yourself are willing to give out advice like this so that we don’t have to go through the headache and stress of figuring it out the hard way.
This is not the same as accepting a large job from client, though, where you could charge a percentage of the project fee up front to make sure the client is serious and now has a vested interesting in completing the project (of course, that doesn’t always work either!).
I find it interesting that you bill at each stage of the project for the work just completed. I suppose I do something similar, though I do approximately 40% up front, 30% on approval of the design, 20% at almost complete (in other words, no revisions of final design yet), and 10% on project completion. I’ve had many jobs that don’t even get to the contract stage, though, which is so frustrating because I can’t be compensated for my wasted time. It’s all talk and emailing and then they decide they are too busy, or they’ve taken the job to someone else, or they really don’t need it that badly after all
Well! Hi tara.. hope ur happy to see me after a long time.. A warm Hi!! to Lauren too..
And regarding charging for cancellation I have never done it.. Though I do charge 40% upfront I make sure there is no looking back… Yeh a few orders do get canceled but Its okay!! I get to make money some or other way.. Atleast I manage to pitch in some or other services..
Till date I never got a client how paid me, and I never made business with him.. but hell lot of people who turned down just before the contract.. But thats Okay.. I did that a lot of times with many other services/products I buy…
After all its a free world..
I generally tell potential clients that I am booking work a certain distance out, and to secure a place in my calendar they can pay 50% upfront.
From previous experience I can definitely say that it is important to get the contract in writing, and to put any clause in there that will protect your own business and cash flow situation. Otherwise it is you taking the gamble by taking on the contract, and not the customer.
Always work to minimize the risks and have the conditions work in your favor, while being fair and delivering everything that you promise.
Hi Lauren, I hope it helps. Your idea of getting payment upfront is a good one for new business although I have never heard of any local freelancers with upfront fees locally – unless for very large projects. Saying that for long distance client I would definitely try and adapt that approach. I can actually see the clients view on paying upfront too(and why they wouldn’t want to). For example if I employed a decorator to paint my house I wouldn’t want to pay him for the job (apart perhaps for materials) before he was finished in case his work was awful, he didn’t turn up or never bothered to finish the job.
Hi Randa, are you regular clients happy to do that too?
Hi Steve, thanks for your input
Hi Santosh, good to have you back hope the new business is going well.
Hi Thomas, thanks for your comment
I used to try to get an up-front commitment with a percentage of the estimate as a deposit, but that turned out to be more of a contractual hassle than I thought it was worth.
Lately I’ve had to allow myself to commit to everything, depending on timing and how much I like working with that specific client. Worst case is I’ve overbooked myself, but that way I’m never sitting around twiddling my thumbs if someone cancels on me.
I always have the habit of insisting for a percentage of the design job every time, for every job. I won’t start working on it until I receive it. Clients are used to it. It would be the same for bookings as well, but instead of a percentage of the pay, a cancellation fee like you say. It’s the same concept and a very good one to do!
Some more wonderful advice and comments!
Whenever I book a client, I always ask for 50% up front for smaller jobs, and 30% for larger jobs, with an interim payment of another 30% (specified right at the outset), payable two weeks after the start date, and a final 40% balance upon acceptance of the completed project. This way, as you mentioned, I at least get something for my time and efforts.
I came out with a term for this pre-payment/deposit/retainer that I like to use, which I feel sounds agreeable and professional: I call it a “financial commitment.” My partner and other colleagues have started to use it, too, because we feel it says exactly what it is and clients are more compelled to live up to their side of the agreement that way. After all, who doesn’t want to show that they’re “committed” to their own business?
Anyway, thank you once again for shring your wisdom and experience. So much food for thought!
I tend not to consider cancellations as disasters – for me it is routine part of my relationships with clients.
There are potential clients that leave without goodbye after receiving a quote from me. There are potential client who become my true clients. And then there are potential clients with whom I get the preliminary agreement regarding future work, cost and timeline, and then they leave without goodbye.
I can’t predict if this specific client would cancel the agreement; but I can predict a percent of clients who are going to cancel – based on previous expirience.
So usually I take this percent into account while planning the amount of work I can deal with, and tend to slightly increase this amount, knowing that some cancellations are inevitable.
The non-refundable 50% deposit weeds out the jokers and gives you a great safety net. I used to accept as low as a 10% deposit but since upping that amount that number of cancelled projects has dwindled to nothing
Non-refundable 50% deposit is a must to handle freelance design cancellation with no hard feelings.
I’m now charging a 50% deposit on design projects after experiencing a couple of jobs where the clients abandoned them half way through and another job which I had a delayed payment on causing many problems. I’ve learnt some lessons the hard way and charging a deposit will at least cover some of my time if any projects get cancelled in the future. I was a bit nervous at first about deposits but it seems to be a common thing for designers to do nowadays.
Hi Rachael, I am am getting to think that a deposit is a good idea myself too. I have always avoided it in the past as I have mostly worked with local companies, but have recently been burned with a company taking about 6 months to pay me, with a small amount still outstanding!
I’d been charging a deposit from the get-go. I explain to my clients that it “represents a financial commitment” on their part. I began with a payment scheme of 30% up front, 30% interim payment after 2 weeks, and final 40% upon their sign-off. Now it’s simply 50% up front and 50% upon completion. No one has flinched at living up their end of the deal (i.e. payment), and I can pay my bills! :^)