Sharing Daily Discoveries About Personal Finance And Business Topics

Expecting A Money Deposit As A Freelancer

I was tipped off about this interesting ordeal on the local Craigslist section here where apparently a freelancer and their client were having a public dispute over work and payments.  From the sounds it of it’s a common scenario where the client alleges that the work preformed was not as expected and therefore they didn’t want to pay what was agreed.

In this situation the freelancer requested for a deposit ahead of time as it is pretty standard for a person to get some of the funds to begin work and upon completion the rest will be paid.  What was interesting in this whole ordeal I thought was how first the customer was expressing her disappointment and encouraging others to never give deposits when hiring a freelancer as you can see here (Click on the images for a larger size):


This then generated responses from other people who work in a similar setup and so they were expressing how you should always have a deposit such as with comments like this:


On the other side of the story the freelancer’s point of view seems to be that the customer is simply making this up in the last minute to hopefully get away with not paying him and so he is perusing legal action as you can see here:


This topic got me very interested as even I know from experience in a business environment like this most of the time you can never really trust a person’s word and expecting everything to go without conflict.  That is just the sad reality of business and when money is involved.  It almost reminds me of how someone told me before that for people who don’t normally steal odds are if the opportunity presented itself where they felt strongly that they could get away with it they will.

In my opinion, a deposit of some sort in these kinds of scenario should be pretty standard to protect both parties.  I think it is a bad idea in this case if one side simply paid everything upfront and vice versa if the other side did everything with no upfront compensation.  It just leaves that room open for either side to be taken advantage of.  As you can see too it creates the mess like the above.

Even for me a long time ago I have been swindled by like an old lady who I felt I could trust based on the stereotype that there is no way an elderly lady wouldn’t honor her word.  But sure enough, right at the last day when everything has been done except it was her turn to pay for the work she made all the excuses in the world to not pay what was agreed.

Fortunately for myself I have been involved in activities that make me more publicly visible to the masses which discourages say a person from wanting to take me for a ride which makes things a lot easier for example.  But in most scenarios like the above, I think you should always have deposits in-place.  If you have to, use a reputable third party service as well where they will hold the funds until the project is complete.

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