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Elance Tips: How to Make Sure You Actually Get Paid When You Complete Work
By Winton Churchill - December 12, 2012
The business model for Elance is unique, part job listing website and part e-Bay style auction site.
It allows employers to post job descriptions and then hire freelancers based on their proposals and bids. Freelancers are able to find jobs with Elance employers located in across the country or around the world.
Since email is the preferred method of communication for most Elance employers, freelancers often complete a job without ever meeting face-to-face or even speaking to the employer. In fact, there are some jobs where the freelancer doesn't even know the name of the Elance employer.
All this anonymity could cause problems when it comes to getting paid, so Elance has created an escrow payment system.
An employer who hires a freelancer places money for payment into an Elance Escrow account. When the freelancer completes the project, the employer reviews and approves the work and then releases the escrow payment.
For larger projects, escrow payments may be spread across several project milestones.
The Elance Escrow system provides security for both the employer and freelancer. The employer can feel more secure knowing that payment will not be released until each milestone is finished and approved.
The freelancer can work more securely with an understanding that the money for payment has been deposited and will be released as agreed upon.
If a dispute arises between an employer and a freelancer related to project completion and payment, Elance promises to work with both parties to settle the dispute before releasing Elance Escrow funds.
More and more employers now use Elance Escrow for payment. One of the alternative forms of payment is the Elance invoice.
This billing method is less secure for the freelancer than escrow since no funds are deposited when the project is started. Another alternative form of payment proposed by some employers is direct payment by check or through PayPal.
Elance highly discourages this type of arrangement since it removes Elance's ability to charge a project commission.
If You're New...
Novice freelancers should avoid entering into payment agreements that are outside the Elance Escrow system since none of the security provided by Elance will be available. Under no conditions should a freelancer provide an employer with personal financial information such as a checking account number.
Freelancers who are paid an hourly rate can't use Elance Escrow for payment. In this case, a weekly timesheet showing hours worked is completed by the freelancer and submitted to the employer.
The timesheet has a feature called Auto-Pay, which gives freelancers more security when it comes to getting paid for work completed. If the employer has agreed to the terms of Auto-Pay, then 5 days after the timesheet is submitted the freelancer is automatically paid.
Freelancers who are new to Elance should remember that using Elance Escrow and Timesheet Auto-Pay is the best way to ensure that all work will be paid for in a timely manner following completion.