I've been freelancing for about 18 months now and mostly work with small businesses, but just landed a contract with a mid-size company. They said net-30 terms, but I'm worried based on stuff I've read online. Should I ask for a deposit upfront or build in some kind of penalty clause? What's realistic without seeming difficult to work with?
A deposit upfront is completely standard for freelance work and won't make you look difficult - most mid-size companies expect it. I'd suggest asking for 50% before you start and the remainder on net-30, which gives you some breathing room and shows you're serious about your terms. Skip the penalty clause though; that tends to sour relationships before they've even begun. Just be clear and professional when you propose it, and if they push back, that's actually useful intel about how they handle their vendors.
Clear payment terms in writing before you start work beats almost any other protection - nail down exactly when invoices are due, what triggers payment, and consequences for lateness. I've had situations where a smaller client dragged payments to 60+ days just because nobody specified what "net-30" actually meant to them (did it start from invoice date or delivery?), so now I include a line item stating "invoices due within 30 calendar days of receipt" and mention a modest late fee (maybe 1.5% monthly interest) if it stretches past that.
A deposit is smart and totally reasonable for mid-size work - you're not being difficult, you're protecting cash flow. I'd aim for 30-50% upfront depending on project length, with the rest on a milestone or completion basis rather than all at the end. Penalty clauses can feel adversarial when you're starting out with a new client, so the late fee approach is gentler but still gives them incentive to pay on time.
Track everything and follow up relentlessly before it becomes a problem. Most payment delays happen because nobody's paying attention to the calendar until day 45 rolls around and suddenly it's awkward to chase.
Set up a system where you flag your invoice the day before it's due. Send a friendly check-in email a few days after the net-30 date passes - not aggressive, just "wanted to confirm you received invoice #whatever on date X, so we're looking at payment by [specific date]." A lot of the time a mid-size company just has your invoice buried in someone's inbox. A gentle nudge early costs you nothing and often gets results. If they genuinely can't pay on time, you'd rather know that on day 32 than day 60 when you're already stressed about cash flow.
If they do push back or consistently miss dates, that's when you escalate - ask for a revised payment schedule in writing, or adjust your terms for future work. A penalty clause might feel aggressive if they're a new client, but honestly, late-pay fees are totally standard in B2B contracts and any company worth working with won't blink at it. The key is having that conversation early and building it into your contract from the start, not springing it on them after the fact.
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