Effectively managing payment cycles is crucial for clients to ensure timely and accurate payments to contractors. This article offers guidance on managing payment cycles on Contra, including understanding different project types, payment schedules, and recurring payment processes.
Understanding Payment Cycles
Clients on Contra may engage in various types of projects, each with its own payment cycle. Here's an overview of the payment cycles clients may encounter:
- One-Time Projects:
- For one time projects, you can set up your project to be based on a fixed amount or fixed hourly amount (max hours times rate).
- For fixed amount projects, the entire project fee will be charged upfront and held securely until the contractor submits their deliverables and you the client approves them.
- For hourly rate projects, the entire project fee (max hours times rate) will be charged upfront. At the end of the project, the contractor will submit their hours worked, you the client will then need to approve them. If the submitted hours is less than the max hours, you will be automatically refunded the difference.
- Milestone Projects: For milestone projects, payment is collected at the start of each milestone and securely held until the contractor submits the milestone deliverables and you the client approves the milestone. Subsequent milestones are charged individually.
- Ongoing Projects: For ongoing projects, you can set up your project to be based on a fixed amount or hourly amount. If fixed, Contra will automatically generate invoices on your chosen frequency and payment date (ex. bi-weekly every other Friday). If hourly, freelancers will be prompted to submit their hours worked in a given period (weekly, bi-weekly, or monthly). You’ll be able to set a max number of hours that can be submited in that time.
In conclusion, managing payment cycles effectively is essential for you to uphold your financial commitments and maintain positive relationships with contractors on the Contra platform.