Project Payment Options

Elance provides different payment options for your projects and each comes with its own set of bells and whistles. Like most things, it’s best to understand your choices so you can make an educated decision as to what will work best for your unique situation.

Some contractors and clients swear by one payment option, while others are equally adamant about the alternative. The fact is, it all works, it’s just a matter of what suits you and the job at hand.

Fixed Fee vs. Hourly Pay

You can work and hire either on a fixed-fee or hourly pay basis within Elance. Fixed fee is where the entire project costs the client a set amount paid to the contractor. With fixed-fee projects, the escrow system, status reports, and milestones are used.

Some clients and contractors prefer this option. They like the fact that the parameters are set and everyone knows what is due by when. When and how often the contractor works is irrelevant as long as the job is done properly.

Continuing work can be done project by project, each with its milestones and end deadline. The parameters are clear with few variables.

However, an equal number of clients and contractors prefer the hourly pay option. Not all jobs lend themselves to a fixed-fee structure. Virtual assistants, marketing positions, and certain design work are some of the possibilities for hourly jobs. Also, sometimes it’s just too much of a hassle to keep posting new projects and closing them. It’s easier for the same client and contractor to work together on an hourly pay basis.

Milestones are also used for hourly jobs, as is the ability to set a fixed number of authorized hours to work each week. Tracker and Work View can be used for hourly jobs as well as the Guaranteed Payment system, which I’ll discuss next. (Tracker and Work View I discuss in detail in Chapter 13.)

Switching a job from fixed fee to hourly or the other way around is simple. Simply click on Terms & Milestones in the workroom. Then click on Change to Hourly Job, as in Figure 15.7, or Change to Fixed Fee, whichever is appropriate.

Figure 15.7: You can easily switch a job from fixed fee to hourly and vice versa.

In other words, each avenue for payment has its set of features to ensure the smooth conduct of business. It’s a matter of choosing what best suits your personality, business model, and project.

Hourly Work Guarantee

The Hourly Work Guarantee goes hand in hand with Work View and Tracker. Both parties must agree to use Work View and Tracker while working on the specified project. It is only while utilizing these features that the Hourly Work Guarantee comes into play.

Hours billed by the contractor are guaranteed payment as long as they have the proper documentation via the Work View screenshots. If the client disputes the screenshots and the screenshots back him up, the contractor will not be paid for that time. However, if the client disputes the screenshots and yet Elance deems them proper during the dispute process, Elance will guarantee the payment to the contractor.

For many hourly jobs, this is a must. Without Work View and Tracker the contractor isn’t assured of payment through Elance, and the client doesn’t really know what the contractor has done. If trust has already been established, the two parties can carry on without any of these features. But in the process of establishing a relationship, it really helps to have everything out in the open.