6 Ways to Get Paid as a Freelancer or Consultant

The Best Forms of Payment for Freelancers

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The gig economy has been booming—and it appears that freelancing is still on the rise. According to a survey by Freelancers Union and Elance-oDesk (now Upwork), more than 57 million Americans earn freelance income—with tens of millions likely to follow. The study reports that freelancers should outnumber traditional workers by 2027.

If you plan on freelancing at some point in your career or you’re already doing it, one of the first things you’ll need to figure out is how to accept payments from clients.

Like anything, some options are better than others.

6 Forms of Payment for Freelancers

Checks. Accepting checks is one of the easiest ways to receive payment as a freelancer. The biggest advantage is there are no fees for depositing a check into your bank account, making checks one of the best forms of payment for many. The downsides to accepting checks include waiting for the check to arrive in the mail and waiting for the check to clear in your bank account. If you need the funds available as soon as possible, electronic payment options might be better—but you can’t beat the price of checks.

Concerned about customers bouncing checks? See how to avoid taking bad checks: Rules for Accepting Payment by Check

PayPal. PayPal is the most common form of payment freelancers receive. It’s free to set up an account, and clients can pay you electronically as soon as you complete your work. The money appears instantly in your PayPal account and you can then easily transfer funds to your checking or savings account. Transfers to your bank take at least one business day, but you can also use a PayPal debit card for instant spending from your PayPal balance.

The downside? Fees. For payments you receive, expect to pay a 2.9 percent transaction fee, based on the amount you receive, plus $0.30. While that might not seem like much, it can add up to thousands of dollars per year or more if you accept most of your payments through PayPal.

Credit cards. Freelancers can accept credit cards as a form of payment, and customers may prefer paying with plastic. These payments are typically processed through PayPal or another online payment system.

You can also purchase your own credit card processing equipment to accept payments from clients. You’ll need wireless credit card terminals and credit card processing software or a merchant account. Several vendors have hardware that works with your mobile device, so you don’t necessarily need the bulky terminals you see at checkout counters. Keep in mind that most freelancers who accept credit cards use apps or other service providers to get paid. For example, you can take credit cards using your PayPal, Google Wallet, Wave, Square, or QuickBooks account—eliminating the need to purchase costly equipment.

Electronic funds transfer. The easiest, quickest, and least expensive way to get paid is through an electronic funds transfer (EFT). Payments move directly from one bank account to another without any apps or credit card processing companies involved. The transaction typically takes two to four business days to move from your client’s bank to your bank, but once the money is there, you do not need to worry about transferring it again like you would with PayPal.

The disadvantage of EFTs is that your bank—or your client’s bank—needs to accommodate those transfer requests. That’s sometimes difficult (or costly) when you’re moving funds from one bank to another. Because of this, most clients that hire freelancers prefer to use checks or online apps to pay their freelancers. However, a client with a robust payroll provider may be able to set up payments easily.

Accounting software. In addition to helping you track income and expenses, your accounting software might help you collect payments. What’s more, the revenue is automatically updated and linked to the client when the same service handles billing and accounting. Programs like QuickBooks or FreshBooks can create invoices and make payment easy for your clients. They may even send reminders and let you know if clients have viewed your invoice or not. If you’re already using an accounting program, find out if it will also send invoices and handle payments. You may need to pay an additional fee, as well as transaction fees.

Square Cash. Similar to PayPal, Square Cash is an online option for freelancers to accept payments. Instead of moving money from your online account over to your bank account, though, the money goes directly into your checking account. Like an EFT, the funds take several business days to arrive in your account. The fee is also less than what PayPal charges at 2.75 percent of payments received. For personal use, sending money from one person to another is free of charge. Clients don’t need a Square Cash account or app—they can pay online at www.Cash.me.

Tips for Getting Paid

Make it easy. You should never begin working on a job until you have read and signed a freelancing contract. To prevent slow payments, make it as simple as possible for clients to pay you. Provide multiple options so that they can use the one they’re most comfortable with. For example, on invoices, include a “Pay Now” button, offer credit card payments, and include instructions for paying by check.

Invoice often. Don’t wait too long to invoice for the work you’ve completed. It’s crucial to keep earning revenue, and invoicing can seem like a distraction, but it’s also important to collect the revenue that you earn. If you wait too long, clients may need additional reminders, and they may get the impression that you’re in no rush to get paid.

Follow up. Sending an invoice doesn’t guarantee payment. Set up a system to ensure that you’re actually getting paid, and reach out to clients who are slow to pay. It’s possible that they’re busy, but it’s also possible that they’re reluctant to pay. Whether they’re just dragging their feet, or they have a problem with your service (or billing process), get in touch to keep things from getting out of hand. Again, some billing services handle this task for you.

Note: Justin Pritchard updated this article.