You would probably ask or a deposit pay for materials and possibly payments as you went along with the work. At the end of the job you would let the remainder of the outstanding cash. If the customer was not happy with your work he could talk to you on-site, at the time, he could request changes and possibly agree a new cost based on those changes.
In some ways all those principles still hold true for people working in the field of web projects. The main difference being that, nearly always, the work is not carried out “on-site” the modern tradesmen of the computer era nearly always work at a distance.
They may not be located the same town as the customer, they may not even be located in the same country or even the same continent. Technically this is no longer a problem, a customer can be located in London and the person or company performing the web project work may be in Sydney Australia.
Again this is not the problem, part of the problem for people performing web project work is that working at a distance is new. Human beings are not well prepared mentally or doing business with someone they can not see and have never met and probably never will meet.
An electronic handshake is by no means the equivalent of a physical handshake. We are used to doing this with in person and ascertaining what kind of person we are about to deal with by their words and body language. We are not well adjusted to doing business with people that we have no physical contact with.
But this is the reality of the modern virtual work environment, so we have come up with ways getting paid at a distance and also we have invented new electronic needs to ensure that the payment reaches the provider on completion of the work.
When someone takes on a new web project, especially for a client that they have not worked for before. It is always advisable to have some kind of agreement even if it is only very basic and amounts to no more than an agreement through exchange of e-mails.
The agreement should say how much deposit should be paid before work begins. This amount is usually 25-33%, but sometimes can be 50%, it should be kept in mind that the buyer of the project also does not know the provider and perhaps will not want to give away too much money before the project has even begun.
It is always advisable to keep the customer up-to-date with developments, not only for the customer’s peace of mind but also to ensure that the work is not going in a wrong direction due to misunderstandings.
Your agreement may also have stipulated that you will receive further payments as you complete certain parts of the project. These again can vary depending on the size of the job and the percentage of deposit originally put down.
Once the job is completed then handed over to the customer payment should be made within a reasonable period which again should have been stipulated in the original agreement.
Electronic payments are now relatively simple; there are a multitude of ways to pass the funds between the buyer and the provider. Your agreement should have laid down how payment will be made. One of the most popular options is PayPal, and other similar online systems such as NoChex and PaymentOnline. It is fair to say that PayPal is definitely the dominant online payment system.
There are other ways is the payment such as via bank transfers which are quick and efficient but can also be relatively expensive. There is also the option of online credit card payments direct to the provider assuming that they already have a virtual credit card machine set up to receive customer’s payments.
One of the more popular systems for dealing with these payments is Worldpay which is used by some of the world’s largest companies. There are multiple other companies offering similar services, this may include your own bank.
Another way that gives a large amount of the security for both provider and buyer are the various online escrow providers. Some of these escrow companies operate within the online services that bring providers and buyers together. A couple of examples would be GAF and iFreelance.
When both parties agree to an escrow payment, the full amount is usually paid to the third party escrow provider. The escrow company will then hand over the cash to the provider under certain agreed conditions. Escrow payments very often take the form of one single payment at the end of the job.
If there is a disagreement most escrow companies will act as mediator to resolve the dispute and to make the cash settlement. The escrow company does not work on behalf of either party but is the simply way to ensure that the cash is available for the provider assuming that the job is satisfactorily completed.
Conversely the buyer protected because the escrow company will not pay out the money to the provider unless the buyer is satisfied with the work that has been done. This does not mean that the buyer will just received their money back if they are dissatisfied they will need to go to arbitration through the software escrow company. This is a good way to ensure that both sides are covered against any unforeseen eventualities if source code escrow goes wrong.