Payment milestones
How should freelancers structure payment milestones?
Short answer
Take a deposit when the client signs, tie each middle payment to work the client can see (a design sign-off, a beta), and leave the last payment for delivery, with final files released when it clears. Three or four payments suit most projects. In PaloWorks, each payment in the agreement becomes an invoice when its moment comes.
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Worked example
A $8,000 website in three payments
Whole percentages, split to the cent the way the agreement does.
- Agreed price
- $8,000
- On signature (40%)
- $3,200
- When the design key date is completed (30%)
- $2,400
- On delivery (30%)
- $2,400
- Final files
- Released when the last payment clears
What to look for
A deposit before work
Work done before money moves is a loan to the client.
In PaloWorks
A payment due on signature is invoiced and emailed the moment the client signs.
Milestones the client can see
"Halfway" is arguable; "design approved" is not.
In PaloWorks
A payment can be due when a key date in the project plan is marked complete.
Dates when the work has no natural break
Long projects need cash flow even between deliverables.
In PaloWorks
A payment can be due on a fixed date, with its own due days.
The last payment before the files
Final files are the strongest reason a client has to pay the balance.
In PaloWorks
A payment due on delivery is invoiced when you publish the delivery, and downloads can open only once it is paid.
Numbers that add up
Percentages that round badly leave a cent nobody can explain.
In PaloWorks
Up to 12 payments in whole percentages that must total 100, split to the cent.
How it works in PaloWorks
Step 1
Choose the split
Three or four payments: a deposit, one or two milestones, and delivery.
Step 2
Tie each to a moment
On signature, on a date, when a key date is completed, or on delivery.
Step 3
The client signs
They see the whole plan in the agreement and sign from the one-time link emailed to them.
Step 4
Invoices follow the work
Each payment becomes an invoice when its moment comes, with no retyping.
When PaloWorks is the wrong pick
- If the client has no email address on file, each invoice is kept as a draft and you are told, so you can send it yourself.
- Very small jobs rarely need milestones: one invoice on delivery, or a deposit and a balance, is enough.
- Retainers billed every month are a different shape from project milestones.
Comparing tools? Read PaloWorks compared, including what the others are better at.
Questions people ask
- How many payment milestones should a project have?
- Three or four suit most projects. More than that adds admin for you and the client without much less risk.
- What is a common milestone split?
- Many freelancers use half up front and half on delivery for short jobs, and a deposit, one or two milestones and a final payment for longer ones. PaloWorks starts from 50% on signature and 50% on delivery, and you can change it.
- Should milestones be dates or deliverables?
- Deliverables when you can: a payment tied to work the client has seen is easier to ask for. Use dates for long stretches with no natural handover.
- Does the client see the schedule?
- Yes. The payment plan is part of the agreement they read and sign.
- What if a milestone is delayed by the client?
- A payment tied to a key date waits until that key date is completed. Say in your terms what happens if the client holds things up.