March 17, 2010
USING MILESTONE PAYMENTS: Prevent Non-Payment Situations in Corporate Writing By Yvonne Pesquera
"Diversify. Broaden your client base. Earn more money." This is typical advice given to corporate writers. But the risk of non-payment runs high when working with new clients - particularly small-to-medium-sized companies with fluctuating cash flow.
The best way corporate writers can protect against non-payment situations is to have your client agree to a "milestone" payment system. Draft a simple and clear letter of agreement (that outlines deliverables, deadlines and milestone payments) and ask your client to sign it.
How Milestones Work
Milestones are used in business to mark stages in development. When a company agrees to hire you for a project, that's a development. When you write a first draft and e-mail it to them, that's another development on the journey toward completing the project.
Different from the magazine industry (in which writers are subject to the publication's contract terms), emerging corporate writers may be heartened to learn that payment is more in our control in this market. Companies expect us to name our project fees and set our own payment terms.
For example, let's assume I quote a $1,000 project fee. I can make a common milestone arrangement with my client, such as:
Asking for Initial Deposit
Some writers may be shy about asking for an initial deposit even before they've written a single word. But veteran writer Mary Mihaly of Cleveland says, "I always ask for a deposit. It's just a standard, accepted way of doing business."
Mihaly explains that payment of an upfront deposit is especially important for projects that stretch across a few months. "The client has to do something to retain you."
Sheldon Gordon, a corporate writer from Toronto, says he once drafted a contract and presented it to a non-profit, setting out milestones at various stages, and indicating he would not proceed to the next stage until paid for the earlier stage. "I did this because the head of the non-profit was known to me as a 'slippery character,' and I did not want any misunderstandings. [The potential client] said he couldn't meet the terms of the contract, so there was no deal."
Payment Before Milestone
It sometimes happens that a writer delivers a draft, but does not receive the milestone payment. The next course of action falls upon the writer: Do you continue to deliver future milestone targets, or withhold until previously accomplished milestones are paid for?
Gordon says that many years ago, he agreed to do a project on terms that were ambiguous. "Before the next to last stage, the client indicated they had paid me. I disputed their interpretation of the contract and withheld the final, edited portion of the document."
Julie Catalano is a freelance writer from Texas and says she too had one of those "rare corporate nightmares." She had been contracted to write test items for an educational publishing company. "We got advance money, but somewhere in the middle - I had to write a rather snarky letter about not turning in the next batch until payment was received for the last. It took a few weeks but [my client] finally coughed it up. Obviously, I never worked for them again."
Benefits of Corporate Writing
Corporate writing is no panacea, but industry studies show that writers are gravitating toward corporate work - as the magazine industry continues to close doors to freelancers. Negotiating these types of payment arrangements is why Catalano loves corporate writing. She says, "Corporates 'get' it; they know good writers are not a dime a dozen. They know you get what you pay for."
Yvonne Pesquera is a freelance writer whose urban upbringing has inspired a lifelong pursuit of wild, open spaces. Her website is at: http://www.yvonnepesquera.com.
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