My accountant told me to stop taking 50% upfront payments

For years, I always asked for half the project fee before I began any design work. My accountant, who works with a lot of freelancers, said this was a bad habit that messed up my cash flow and tax planning. He explained that getting a big chunk all at once made my income look huge in some months and empty in others, which was hard to manage. He suggested I switch to a smaller 25% deposit and then bill for milestones every two weeks. I switched to his method about eight months ago, and my bank account is way more steady now. I don't have those scary lean months anymore. What's your normal payment structure for a big project?

3 comments

3 Comments

margaret_gonzalez251mo ago

Wow, that's smart advice! I started doing weekly invoices instead of big deposits and it totally smoothed things out.

grant_allen851mo ago

My old accountant told me that about ten years ago, and it changed everything for me. It's funny how breaking big scary tasks into small regular ones works for so much more than just billing, like saving money or even cleaning the house. You're totally right, @margaret_gonzalez25, that weekly rhythm just makes the whole cash flow thing feel normal instead of a crisis. It turns a mountain into a bunch of small hills you can actually walk over.

troy8321mo ago

Smoothing out cash flow sounds nice, but I still take half up front. That big deposit means I know the client is serious and I have real money to buy materials or cover my time before I even start.