Today’s job market is increasingly becoming autonomous. People now wish for greater control over how they work, especially since the world got accustomed to working from home. The pandemic period also helped the gig economy flourish – new businesses now prefer short-term contracts with freelancers, full-time working professionals with a bit of extra time on hand have created side-hustles, and more and more people are following the entrepreneurial path by becoming gig workers.
But the gig economy is still severely unregulated, and one of the direct detrimental impacts of this is payment problems. Naturally, the core essence of any type of “work” is the desire to earn. Professionally, we all work to earn. The motivation for most people behind starting a side-hustle too is job security – a steady income flow in the event that you’re unexpectedly laid off. But if this security gets jeopardised, then what is the point?
Reasons Why Freelancers Get Paid Late
1. The client is a douche – primary amongst all reasons due to which your payment is withheld is that your client is a bit of a douche. While most clients are sensitive towards your monetary needs, others have a very black-and-white perspective of services. How satisfied you are with a service varies from person to person. If you don’t state the conditions by which your services should be evaluated, the possibility of encountering a douche will definitely multiply.
2. You’ve not defined service standards – this is crucial. Both you and your client should always sign an agreement which states the delivery date of your work and how the quality of your services should be measured. One simple method of doing this is asking your client to define what s/he/they expect and when. For example, if you’re a freelance content writer, you could discuss and mention the word limit of each blog, focused topics, number of backlinks etc. in an agreement.
3. Your work needs genuine improvement – this is a very vague possibility. While client A absolutely loves your work, client B could think you’re hogwash. This incongruence is no fault of your own – it’s simply the nature of the beast. However, if over ⅓ of your clients display dissatisfaction with your work, you probably need to shake things up a bit.
What is Digital Escrow and How Can It Help You?
For a freelancer or independent service provider (such as CAs), a digital escrow account is essential to ensure you are paid timely and in full. A digital escrow account refers to an instantly created, agreement-based account in which an unbiased third-party helps make sure that transactions are processed properly, without any chance of fraud.
In digital escrows for freelancers, the client and freelancer first form an escrow eAgreement. This agreement would contain the clauses that would help determine on what basis your services should be evaluated by the client. This would help ensure that problems such as obscure dissatisfaction with services are avoided. In this agreement, you can also mention the delivery date of your services and/or project(s), the terms and conditions on the basis of which your payment has to be rightfully released from escrow to you, and what to do if a dispute arises.
After forming the eAgreement and signing it, the client and you can instantly open a digital escrow account. The client would first deposit your fee in escrow, after which you will render your service(s) and/or project(s). Meanwhile your money will be protected securely in escrow, so you know that at least your entire payment will be released to you in one instant (Castler has tied up with leading RBI-licensed banks to store your funds in digital escrow with utmost security).
After you have rendered your service(s) and/or project(s), your money is released to you according to the terms of agreement between you and your client. With Castler’s digital escrow dashboard, you can initiate this transaction easily by yourself. The client will approve the payout, and your fee will be transferred to your personal bank account instantly.
“Can I use digital escrow?”
Absolutely! Digital escrows are industry and use-case agnostic, and freelancers and services providers across a wide array can avail this service to protect their payments. You can use digital escrow if your services fall under any of the following categories-
Arts and Entertainment
Professional and Technical Services
Commodities and Securities
Comment your thoughts down below and share with us what you think! You can also mention any particular fintech topics you would like us to cover in our upcoming blogs.