When hiring a freelancer to help you with a project of any kind, a question that arises is: will it be better to make advance payments or make the payment by milestones? Or would it be better to pay for all the work at the end?
In this article we explain the differences and what is best for you according to your type of project, so that you know what is best for you.
In addition, we will see how to use the milestone project mode in SoyFreelancer.com
A. Payments with Advance
Advance payment consists of paying a significant part or the total budget of the project at the beginning. Some clients pay an advance to commit the freelancer, and sometimes even 50% of the payment is advanced.
However, paying such a significant amount from before is not without important risks, which are well known, since if the freelancer does not meet expectations or changes arise in the scope, you could lose the money invested. In addition, in many cases, if the freelancer has already received most of the payment for the work, their incentive to finish the work may not be as sustainable as we say…
In SoyFreelancer.com, your initial payment remains in an escrow deposit, protecting you as a client and ensuring that your money will remain saved until you approve the work. This avoids committing the budget from the beginning by giving the person you hired a significant advance.
B. Payment by Milestones or Stages with Partial Payments
Payment by milestones (or payments by stages) divide the project into “mini-projects” with deliveries and partial payments. Instead of paying everything at once, you establish several milestones: each milestone corresponds to an objective or project with its own amount. Once you have that stage ready and the mini-project is finished, you start a new one for the next step. For example, you could define design, development and testing as separate milestones in a web development project.
After completing each phase and verifying that it meets what was agreed, you can release the payment of that mini-project to the hired freelancer. Then the project advances to the next.
Working in this way benefits both parties, both the client and the freelancer, since the professional knows that there is a payment reserved for the next milestone. For your part, as a client you know that you will only release the money when you receive the finished work.
In this way, the milestones are functioning as a controlled payment plan and allow you to work either with the same freelancer or with a new one in the next stage or mini-projects that make up your great project.
How to Divide your Project into Mini-Projects to Hire Online
Opting for payment by milestones or mini-projects offers you multiple advantages in management, quality and, of course, also in finance. In the first place, because you reduce the risk with money: you do not immobilize your entire budget from the beginning, but you pay in parts. If something goes wrong along the way, you will have spent only on what has already been delivered. You will not lose the total of the project. On the other hand, you improve the control of the project, since by setting separate stages and detailing specific tasks, you can track progress, request periodic reviews and ensure quality in each phase.
Another benefit is time management. Dividing the work into shorter deadlines helps to meet a calendar. Both you and the freelancers you choose have specific deadlines for each delivery. This makes it easier to finish the project on time.
In addition, with payment by milestones you can adjust the scope on the fly. For example, if you need to change something after the first milestone, redirecting the next step is easier. In addition, you will not have spent all the money. In short, milestone payments give you more security, control and flexibility than a single advance payment.
Flexibility to Rehire or Change
A great advantage of working by milestones is the flexibility it provides in terms of talent. Imagine that you hire a freelancer for the first milestone. If the work is satisfactory, you can rehire him for the next one, maintaining continuity with someone who already knows your project. On the contrary, if you are not satisfied after the first milestone, you can change freelancers in the following stages. You will not be tied to a single professional, so you can look for another more suitable one without losing what has already been advanced.
This modality by stages and payment by milestones minimizes risks, because each milestone functions as a trial period for both. If the communication or quality are not as expected, you can end the collaboration in that milestone. Then you can publish a new mini project to continue with another professional.
In SoyFreelancer.com you can invite the same freelancer to the next phase of the project, or open the opportunity to new talents. In any case, paying by milestones allows you to advance step by step and decide the course according to real results.
How to Work this Way in Soyfreelancer.Com?
Practical Example: Creation of a Book
Suppose you want to commission the creation of a book (for example, an e-book). A smart strategy would be to divide it into milestones. For example:
- Milestone 1: Elaboration of the index and outline, with a sample chapter. After approving it, you release the payment of the first milestone.
- Milestone 2: Writing of the following chapters (for example, three more). You review the content and pay the second milestone when you are satisfied.
- Milestone 3: Completion of the complete manuscript and final review. Only when you have the finished and reviewed book, you release the payment of the last milestone.
With this way of working with partial payments, each stage will be supported by concrete deliverables. If the first milestone does not turn out as you expected, close the project in that phase. Then look for another professional to continue. You will not have spent your entire budget. On the other hand, if everything goes well, you continue with the same freelancer.
Conclusions
Between giving advance payments vs paying by milestones or mini-projects, the latter is the best option. It offers greater security and flexibility.
By segmenting the work into mini projects, you pay only for what is delivered and maintain control in each phase. This takes care of your investment and also improves the quality of the result, so you can also make adjustments in time if you see that something is not going as you expected.
If you are ready to put this smart way of hiring into practice, publish your project by milestones in SoyFreelancer.com. You can define stages, reserve payments safely and collaborate with trusted freelance talent. This way you will carry your idea forward safely, paying as you receive results.
Take advantage of the benefits offered by the escrow and achieve success in your next project!
