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Home-Based Work: Protecting Yourself from Shady Clients

 

Almost any freelancer out there will tell you that there are some significant challenges involved in making a living from home based work. Entirely too many clients who request freelance services decide later on that they don't want to pay the bill, and experienced freelancers know that litigating every nonpaying client may not be much of a solution. However, there are some general strategies that work-at-home freelancers use to protect themselves against nonpayment and other kinds of bad client relations.

Working with Contracts

A contract for 1099 or freelance work provides more of a basis for guaranteeing payment for work completed. That's why some freelancers will only work with a contract. This may not be feasible in the beginning of a work-at-home career, but over time, freelancers can pick the jobs that offer more security and credibility.

Assessing the Client

For many freelancers, looking at freelance job offers is almost like a professional assessment process. Freelancers will study the contact information they are given, research the company holding the cash, and talk to the project managers they may be in contact with about background on the project. This can often give the freelancer a better sense of whether or not they stand to be ripped off. The more engaged work relationship also helps freelancers shame some clients into paying what they owe, without resorting to formal collections processes.

Money Strategies

Some freelancers ask for retainers or get part of the job payment up front. This provides more of an even incentive when no contract governs the work relationship. Another strategy is to start off slow. With this kind of setup, the freelancer agrees to do a low volume of work initially. They then delay further contracted work until the first payment comes in. After the freelancer sees a check, they understand that they are not likely to be denied payment later. This can be an effective way of hedging against the chances of getting ripped off.

Diversification

Freelancers who are too dependent on a single client can find themselves roped into situations they don't like: being denied pay, being paid too little, or treated badly in general by a project manager or other client staffer. The key to avoiding all of these kinds of situations is similar to what someone might bring to the table for a regular 9-to-5 job; for freelancers, let's call it diversification. When a freelance worker has enough clients to survive without one or the other, bad contracts and bad clients can be dropped. This creates a lot more empowerment for a class of professionals who are all too often undervalued and taken advantage of.

Keep these tips in mind for setting up your work-at-home business in a way that will safeguard the value of your work. It's important to understand that strategizing over "accounts receivable" isn't hard-nosed, just practical.

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