Contracting work, does anyone pay?

Merrill Oveson moveson at
Mon Apr 23 18:22:26 MDT 2007

On thing to do is to create your own LLC - limited liability company.
Then you only pay taxes on what you draw.
Expenses are paid for right out of the company - make sure you set up
separate bank account and keep the personal separate from the business -
this is very important for tax purposes.

As far as getting paid, I've been stiffed several times.  So you're not the
only one.  One thing to do is contact a collection agency and get a credit
application.  Then require the party hiring you to fillout the credit app.
I've also sent several companies to collections - unfortunately this has
only worked maybe 25% of the time.  Now I'm to the point where I don't
deliver unless the work gets paid for.  Sometimes, I give terms and then at
times I get burned. :-(   It happens to everyone.  A doctor once told me
that collects less than 50% of everything he bills!  (That probably has a
lot of do with insurance companies.)

The advice on billing hourly is right on.  Billing for the job will only
cause the hiring party to insist on endless changes and additions - and
cause you in the end to be working for pennies.  As a custom programmer you
have to act like an auto mechanic.  You give an estimate, but work hourly.
As problems or additional requests arise,  you keep the customer informed,
but stick to your guns of hourly billing.

Also in the custom programming world, a 50% retainer is standard based on
your estimate.  If anyone balks, you can always tell them "this is standard

Good luck - I've been there and continue to live there!

On 4/22/07, Steve <smorrey at> wrote:
> Hello everyone,
> A few months a go I decided to go programmer for hire and started
> checking out several contracting jobs.
> Over 6 months I've had 5 jobs, only 2 of which made good on funds owed
> (and sadly they were  both jobs < $1k).
> It seems to me that most of these "contractor for hire" meet up sites,
> are only interested in collecting fees, and not enforcing payment.
> For instance on my last contract I finished 2 weeks ahead of schedule,
> the payor waited 2 weeks to pay me anyways, and to add insult to
> injury when I deposited the check, the thing bounced!
> So I contacted the site that I got the job from (I'll leave them
> nameless for now since this is still technically an open dispute), and
> they said that unless I had used their escrow service (an additional
> 10% fee), that payment is not guaranteed.
> I guess this was laid out in fine print on page 12 of their terms of
> service or something.  But holy cow, I'm getting tired of getting
> stiffed.  I do good work I do it quickly, and I maintain communication
> and give regular updates.  I guess maybe I'm too trusting or
> something, I want to code, I love to code, but I'm going to have to
> start bringing home the bacon soon, or I'm not going to have a home to
> bring it to.
> Has anyone else here utilized contractor for hire services, as a
> programmer, and could make a good recommendation?
> Additionally is anyone looking for a contract programmer for short
> term work, I could use the work and I think I'm getting pretty good at
> it :)
> Thanks in advance!
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