Being a freelancer means many things you’d rather not deal with end up on your table. One involves setting up payment terms and timelines with international clients. When you factor in the legal framework, currency exchange, and project description, it becomes even more challenging.

However, it is crucial to agree on payment conditions with international clients before embarking on any project to avoid confusion when it is time to receive payment. If you’re wondering how you can set up your payment terms and times with international clients without hassles, as always, we’ve got you.

Also read: Negotiating cross-border freelance contracts: Tips and templates

Why you need to set up payment terms and timelines

Before we dive into the process, here are the reasons you need to draw out your payment conditions when dealing with international clients.

• Defines mutual expectations: Establishing agreed terms makes both parties accountable and clarifies responsibilities, avoiding disputes.
• Protects legal rights: Well-drafted terms serve as proof of agreement should legal issues arise or enforcement become necessary.
• Prevents misunderstandings: Your international clients may have worked with other freelancers and could be used to certain payment conditions, which might not be favourable to you. It is essential to inform them of your preferred payment method to prevent misunderstandings that could compromise your relationship with the client.
• Promotes your professional outlook: As much as reasonably possible, you want to create a good impression with your international clients. Professionalism will enhance the level of trust your clients have in you and strengthen the relationship. Providing a clear payment plan reassures your client that you are knowledgeable and competent.
• Helps you plan your finances: Setting up payment terms and timelines ensures you know when to expect your payments. This way, you can plan your finances efficiently instead of leaving it to the discretion of the
• Reduces risk of non-payment: Specific timelines and conditions reduce the likelihood of clients delaying payments or defaulting, thereby protecting your earnings.

How to set up payment terms and timelines with international clients

Payment terms and timelines are binding agreements that stipulate the amount to be paid, the currency in which it should be paid, when the payment should be made, and the means of payment. Here is all you need to know to set up your payment terms and timelines.

1. Understand local legal and cultural norms

Different countries have varying laws about contracts, dispute resolution, and currency regulation. Before drafting payment terms, research the legal requirements for your country and your client’s country. If necessary, consult legal professionals to understand the client’s local regulations and consider cultural sensitivities, ensuring your terms are appropriate and valid.

2. Define clear and detailed payment terms

Use simple language when drafting your payment terms to reduce misunderstandings. Your payment terms should specify the conditions under which payments are to be made, including:

• Payment amount: Total fee and any instalments.
• Payment currency: Clearly state the currency, considering exchange rates and potential fluctuations.
• Payment method: Bank transfer, international wire, credit card, or online payment platforms.
• Due date(s): Specific deadlines for each payment or milestone.
• Late payment penalties: Percentage fees or interest rates applicable if payments are delayed.
• Any discounts: If you’re offering a discount, please specify the applicable terms and conditions.

3. Set reasonable and mutually convenient timelines

Your set timelines should consider the scope of work, cash flow needs, and the client's payment practices. Here is a payment structure you can consider:

• Percentage upfront: Often 30-50% before work begins.
• Milestone payments: Payments made at predefined project stages.
• Final payment: Due upon project completion or delivery.

You should be flexible enough with your timeline without compromising quality and professionalism. You can allow clients to pay in instalments tied to deliverables or invoicing intervals. Be transparent about processing times, especially when dealing with different banking systems, which can add days to transaction completion.

4. Factor in currency exchange

Fluctuating exchange rates can impact the amount you receive in your local currency. If you will receive payment in your local currency, agree on a fixed exchange rate or a rate at the time of invoicing. Otherwise, consider using international payment services such as Grey to receive payments in USD, GBP, and EUR, which are relatively stable currencies.

Also read: Invoice like a pro: Tools African freelancers are using to get paid faster

5. Use legally binding contracts and clear invoicing procedures

A signed contract outlining payment terms provides legal backing and clarity. Ensure invoices include:

• A unique invoice number
• Detailed description of services/products
• Payment amount and currency
• Due date
• Accepted payment methods
• Bank details or online payment links
• Terms regarding late payment penalties

Use automated invoicing tools like Grey to streamline your invoicing process. Send invoices well ahead of deadlines, and specify the acceptable days for processing payments (e.g., “net 30," which means the client must pay the full amount of an invoice within 30 calendar days from the invoice date).

6. Discuss payment expectations early

Set expectations proactively in the negotiation process. Discuss and agree on the payment schedule, methods, and currency. Incorporate a confirmation of payment terms into your contractual agreement, and remind clients of upcoming payment deadlines with polite follow-ups.

7. Plan for international transaction fees

International payments often incur transaction fees. Payment platforms charge wire transfer charges, currency conversion costs, or platform transaction fees. Clarify whether these are included in your fee or will be covered by the client. Use a preferred international payment platform that offers low fees and competitive exchange rates. Grey reduces expenses and delays with free multi-currency accounts, low and transparent transaction fees, and favourable conversion rates.

Also read: Freelancer's guide to handling currency fluctuations

Managing international payments

Setting up effective payment terms and timelines with international clients requires careful planning, clear communication, and cultural sensitivity. By establishing transparent, reasonable, and mutually agreeable conditions, you reduce the potential for disputes, organise cash flow, and build strong, professional relationships with your foreign clients.

Grey is a top recommendation for simplifying your cross-border payment process with automated invoicing, multi-currency accounts, low transaction fees, and competitive exchange rates.

Sign up with Grey today to enjoy efficient cross-border payments.

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