The benefits of freelance writing cannot be overstated. The flexibility, freedom, and feeling of being your own boss. What’s not to like? The freedom feels so good—it almost makes you forget the other side of running a business. The “darker” side—freelance contract writing, bookkeeping, or marketing a business. And it’s not to say that darker means bad. It just means business skills that not everyone studied in school, is “born with”, or is particularly skilled at. And freelance contract writing is definitely one of them. As a freelancer, you’re on your own with no one looking out for you. Corporate companies typically have a legal department to review all incoming contracts. You represent the company, and the company lawyer represents you. Freelancers, on the other hand, are skilled at a certain trade—whether that’s graphic design, strategy consulting, or carpentry. Freelancers generally don’t have the legal expertise to respond to and craft contracts that protect themselves. Although you don’t necessarily need a law degree, understanding the basics of creating a freelance contract is key. This article is here to help guide you through what freelance contract writing is all about, including the anatomy of a freelance contract and helpful tools to automate the process. Freelance contract breakdown Here are the basics of a freelance contract: 1. Names, contact information, and dates Every freelance contract should include the full names of both parties: the seller and the buyer, as well as contact information and dates of contract execution. Best practice: Use full names for both you and the client. Avoid abbreviations like J. Doe. Instead, detail full names (i.e. Jane Doe) and company names to ensure that the names of both parties and corporations involved are clear. 2. Your role Detailing your role on the freelance contract is crucial to managing expectations. If you received a proposal from the client detailing the scope of work and responsibilities, then you should be able to craft a clear freelance contract. On the other hand, if scope was communicated verbally, then crafting a contract or other forms of written communications will help bind these ambiguous statements. Key items to include are: Deliverables: Deliverables will drive your work. These items will also tie in to the payments you receive. Responsibilities: List all the responsibilities required to complete the work/deliverables detailed in the proposal. Exclusions, if any: Similar to detailing responsibilities, make sure to include any out-of-scope items. This will help ensure that you do what’s required—nothing more, nothing less. That way, if clients push to expand the scope, you have what’s in-scope and out-of-scope in writing to back up your claim, when necessary. 3. Brief description of scope Scope description directly ties to what clients need help with. Typically, clients (the buyer) approach the freelancer (seller) for help on certain tasks. A Statement of Work (SOW) is typically provided. As a freelancer, it’s your job to fully understand what’s required, and ultimately itemizing these details in the freelance contract. This helps ensure that both parties are on the same page. 4. Payment information Explicitly detailing payment terms, deadlines, and methods is key to freelance contract writing success. Use a how, what, and when approach. Here’s how: Define how you expect to be paid: some freelancers get paid by the hour, while some clients prefer paying per project. Lawyers, for example, tend to charge an hourly rate. Digital graphic designers typically charge per project, while freelance writers charge per word, based on their years of experience and expertise writing for a certain niche. Best practice: Use a time-tracking tool such as Toggl or Bonsaito log hours. Even if you do end up charging per project, initially tracking your hours can help you understand the amount of time it takes to complete certain tasks or projects, which you can use as a reference for future jobs. Here’s what: Next, write the total amount of money you should be paid, breaking them down into milestones. If you anticipate spending your own money to complete the project, then include those expenses (as disbursements) so that the client is aware that you expect to be reimbursed upon project completion. If these charges are unknown at the time, you can always itemize these expenses when you invoice your client. Here’s when: Finally, detail when you expect to get paid. Typical net-payment terms are 15, 30 and 60 days. If payments are late, you might want to charge a fee. However, remember to detail payment terms that are reasonable. At this stage, your relationship with the client hasn’t fully begun, so you don’t want to scare them away too soon with unreasonable terms. It’s all about balance! Best practice: TrulySmall Invoices is a tool that allows small business owners to automate their invoicing process. Freelancers can save hours in their week when it comes to creating, editing, previewing, and sending tailored invoices. When it comes to the what and when approach, invoicing technology automates many aspects of this process. From data input and calculating payment periods and sales taxes to sending invoices with a credit card payment option, freelancers are much better off using an online invoicing software that is customized to suit their needs. Not ready to make the switch just yet? TrulySmall offers a range of free invoice templates in different formats and for varying industries to help you start creating invoices that help you get paid. Read More: Freelancer Invoicing: The Full Guide for Small Businesses 5. Project deadlines Without deadlines, freelancers can easily lose focus and push projects back—resulting in an unhappy client and unhealthy working relationship. Unlike working in a corporate environment, freelancers don’t have bosses breathing down their back, checking in on work statuses. Freelancers should break up a project into different milestone achievements, especially for multi-month projects that are large and complex. These deadlines not only help freelancers stay on track each week/month, but it’s also a way to set-up payment expectations in increments, thus improving cash flow. 6. Legal Details A legal component is always included in freelance contract writing. Although you don’t to have gone to law school, some knowledge of legalities can do you more good than harm. Here are some legal details that you should at least be aware of: Ownership Clients pay you to complete work and often reimburse you for any expenses you’ve incurred while completing the work. As such, they generally would seek full ownership of the final product. It’s just the way freelance works. However, it never hurts to ask for credit. When setting up the freelance contract, confirm with the client if you can include the final product on your portfolio. For example, for some freelance writers, some clients may want you to ghost write for them, while others are happy to list you as the primary author. Either way, it’s a good practice to confirm with them at the project outset—particularly if they choose the ghost writing route in order to build out in-house thought leadership. Confidential information Working for any company involves handling confidential information such as business strategies, customers, data, differentiators, etc. Freelancers and independent contractors, in particular, are expected to come to an agreement with the buyer on not disclosing any of this information on the freelance contract. This typically occurs before any work is completed. Independent contractor terms Similar to the above, independent contractors aren’t like your average in-house employee. There are different expectations between the two, including: Taxes: You’re liable for your own taxes. Representation: You don’t represent the client and neither do they represent you. Payments: Unlike employees who get paid salaries, your payments will be explicitly stated in the contract. Management: You won’t expect the client to manage your daily schedule—you’re just expected to provide quality deliverables on the dates stated in the scope of work or contract. Limitation of liability This section can be short and simple. If there is a breach of contract that neither party could have reasonably expected based on contract terms, then either party is responsible. Termination terms Unless you’re signing an ongoing contract, you should include a final date to describe when your relationship with the client ends. This signifies when you will stop doing work and when the client will pay you for all the work that has been completed to date. Indemnity In the unlikely event that a third-party files a lawsuit against the final product or end result of a project, the freelance contract must clearly state who is at fault. The client will often confirm that you (the contractor) is at fault if your work is the reason why they’re getting sued. Legal best practices: AND.CO, Bonsai, and other similar freelancer apps offer digital tools to help streamline this part of the proposal/freelance contract writing process. Not a legal pro? Not to worry. Let the software show you how! It not only educates you on contract items that aren’t taught in school, but it also saves tons of time through automation so that you can get back to running your small business. Putting your freelance contract altogether There’s a lot of time and care that goes into developing your first freelance contract. Including the right information—such as contact information, scope, payment terms, and legal details—is only a part of the battle. The other part is putting it all together to present clearly. Where possible, define terms that might cause confusion. Use bullets, where possible, stick with plain language and avoid jargon. After all, a freelance contract must be understood and agreed to by both parties before work execution begins! Need help with the rest of your business? Kashoo is the simplest tool available to handle all of your accounting and bookkeeping needs.
