i have been doing web design freelance for quite some time but most of the time are quite informal. so i consider myself to be still new in this area. i usually meet the client to discuss and make payment in cash. for some clients who wants to feel safe, they write a letter which states that I have received the money and asked me to sign before i get the money from them.
but today, i have a client who requests me to prepare an ‘enterprise’ to him when i said he could make a down payment today. i wasn’t sure what ‘enterprise’ he was referring to but i presumed that he meant the letter which i will need to sign when he has given me the money. seriously, i don’t know what’s the name for such a letter and that’s why i made a guess that the enterpise he meant was the letter.
i haven’t written such a letter before and the ones which the past clients had written for me to sign are just as informal. the letters are like 3 to 5 sentences which looked so kiddy but I don’t know if that’s the right way though. so i am just wondering how should i write such a letter? what are the things i need to write and tell? how should the process be, like should i have 2 copies while I keep a carbon copy, who are the ones who should sign and things.
i will be meeting him soon this weekend to do the down payment while i show him the prototype. i wish i could give him a good letter(without much loopholes) because i had bad experiences with him delaying the payment and i am really worry if something like this will happen again.
Why are you accepting payment in cash? Get a cheque from the client instead, and then deposit that in your bank account (if you don’t have a bank account, now is a good time to get one). Once the cheque has been cashed, send a letter to the client stating that the cheque has been processed and you can begin work.
Something like this may be useful (bear in mind it’s a Sunday and I’m not in my “business mode” so I may be off by a bit).
(Today’s Date)
(Your Name)
(123 Your Street Address)
(Your City, ST 01234)
(Name of Client)
(456 Their Street Address)
(Their City, ST 98765)
Re: (Name of Project)
Acct # (XXXX-XXXX-XXXX-XXXX) (This will be the account number for the job; if there is no account number, then don’t use this.)
Amount: ($X,XXX.xx) (This will be the amount of the payment that was made.)
Dear (Client Name):
This letter is being sent to you in response to a payment for (describe the services to be provided) dated (Date), which was received on (Date). Your payment has been received and processed. (I/We) look forward to working with you to complete your project as soon as possible. If you have any questions please do not hesitate to contact (me/us) via (list the methods you wish to be reached by for normal business inquiries and so forth) between the hours of (list your business hours). In the event of an emergency, (I/we) can be reached via (list the methods you wish to be reached by in case of emergency).
Please retain this letter for your records. In the event you lose this letter, a copy will be sent to the above address upon request.
Best Regards,
(Your Signature - actually write this out, don’t print or type)
(Your Name - Type this out in your word processor program of choice)
[Edit: One other thing, make sure you have a signed CONTRACT before accepting ANY money. If this is what you were looking for, just ask me and I’ll direct you to some online resources to help you out.]
I think that the name you are thinking about is ‘receipt’. Generally speaking, as long as the contents is clear, the form doesn’t matter (a contract written on the back of a napkin is just as good as one written on office stationary). Generally, the more terms and conditions you write, the higher the chance of unintentionally hurting yourself or your clients legal status.
As an alternative to having the client sending you a cheque, have him transfer the money directly to your bank account.
Your talking about 2 things here. one is reciept other is contract.
Receipt just says you recieved payment to do the work and you can word it like that.
Contratc should list what work your doing. How long it will take to be done and what payments will be made. Half up front or before work begines and other half when work is done.
The more you work out in contract the better it is. Most contracts by law need start date and finsih date. that is in the Usa not sure about other countries.
You should have them sign contract and save one and mail one back to them also. Checks are best way to go for payments also.
thanks a lot guys.
looks like i need a contract. because i thought the letter could include the dates for the start and end of the project. how should i write a contract that is good enough to protect myself?
the reason why i am sounding like a paranoid is because i have experience with these client owing money for more than a year! i almost thought i will never get back the money until recently he suddenly contacted me to do the payment he had owed me for a year and work on his new project.
Dan Schulz, say if I have seperate payments. The client is making 3 seperate payments, the initial down payment, then the second payment after I completed a milestone and the final payment when I completed the project. Do I have to state these in the letter format you had given? Otherwise, if the initial payment is $100, would the letter look as if the entire project cost is $100 and not $300?
It’s up to you, really. If you feel comfortable issuing a letter with each payment, then go right ahead. Just make sure you spell out what the payment was for (deposit, milestone payment, and final compensation) so that there is no confusion.
You dont need a contract or a receipt or any of that. A ‘deal memo’ and check would suffice, which is simply a written letter which indicates what the payment is for (and any critical terms) and a cancelled check. If a client writes a check and asks for a receipt, tell the the check is the reciept, and to protect both parties write a 2 or 3 paragraph note saying what the payment is for and outlining very generically the terms of the deal. You don’t have to go into too much detail - the memo should discuss the PAYMENT, not the ongoing deal. Just mention whether the payment is refundable, whether a more formal deal will be put into place, next steps, and the total debt as it pertains to the deposit, etc.
This is what laywers, attorneys frequently do and it’s a great way of protecting everyone while accepting money before/without a contract in place. A signed deal memo isn’t exactly a contract, but it can be a legal agreement if it’s done properly and it only takes about 5 minutes. For trusted clients, I have been known to email them a deal memo and ask then to sign it and fax it back, and never bother to execute a more formal contract. If the note is properly written it can be construed as an agreement in court.
It sounds like this client doesnt’ trust you, so you should address that verbally with them and see what they need to be more comfortable.