Verified Payment System for Milestone Payments
Step-by-Step Guide to Leveraging Upwork’s Verified Payment System for Milestone Payments
Setting up milestone payments for fixed-price contracts on Upwork is one of the most effective ways to ensure that you receive timely and secure payments for completed work. With milestone payments, clients fund a set amount of money for specific phases of a project, and once you meet the requirements of that phase, the funds are released to you. This system allows both clients and freelancers to manage expectations and ensures that payments are tied to deliverables.
Here’s a detailed, step-by-step guide on how to set up milestone payments, how to use them effectively, and how they can benefit both freelancers and clients.
Step 1: Understanding Milestone Payments
1.1. What Are Milestone Payments?
Milestone payments are a feature of Upwork’s verified payment system designed for fixed-price contracts. They allow you to divide the overall project into smaller, manageable chunks, with each chunk tied to a specific deliverable or phase. When you complete the deliverable or milestone, the client is notified and asked to release the payment from escrow.
1.2. Why Use Milestone Payments?
Security: Both clients and freelancers benefit from having payments “escrowed” (held in a secure account) until the work is completed and approved. This protects both parties from fraud or misunderstandings.
Trust: It builds trust between the client and the freelancer because payments are agreed upon before work begins, and milestones provide clear expectations for both parties.
Clear Expectations: Milestones set specific deadlines and deliverables, reducing the risk of scope creep and miscommunication.
Step 2: Setting Up Milestone Payments for Fixed-Price Projects
2.1. Initial Agreement with the Client
Before setting up milestones, the freelancer and client should agree on the overall scope, timeline, and deliverables of the project. Discussing these points is crucial to creating effective milestones that align with both parties' expectations.
Example: *As a freelancer working on designing a website for a real estate company, I discuss with my client that we will divide the project into three main phases:
Initial concept design
Full website build
Final revisions and testing.*
2.2. Creating Milestones on Upwork
Once you have the agreement, the next step is to create milestones in Upwork. You can do this when you set up the fixed-price contract or after the contract is created.
Example: *I create a fixed-price contract for the real estate website project, and we agree to three milestones:
Milestone 1: Initial concept design (funded with $500)
Milestone 2: Full website build (funded with $1,000)
Milestone 3: Final revisions and delivery (funded with $500)*
To set milestones in Upwork:
Go to your project details page.
Under "Milestones", select “Add Milestone”.
Specify the amount for each milestone (ensure it reflects the agreed-upon amount).
Provide a detailed description of the work involved in each milestone.
Set a timeline for each milestone completion.
Example: For the first milestone, the description would be: “Create initial wireframe and design concept based on provided branding materials and design preferences. Deliver to client for review.” The deadline is set for two weeks from the start of the project.
2.3. Fund the Milestones (Client’s Responsibility)
Once the milestones are set, the client is required to fund each one into an escrow account. The client’s payment method is verified by Upwork before the funds are made available.
Example: The client must pay $500 for Milestone 1 into escrow before I can begin work. The funds will remain in escrow until I submit the initial design concept for review.
Client's Role: The client logs into Upwork, reviews the milestones, and funds them by selecting the amount to be deposited into the escrow account for each phase of the project.
Step 3: Completing the Work for Each Milestone
3.1. Work on the Deliverables for Each Milestone
Once the milestone is funded, you can begin work on the agreed-upon deliverable. It's important to focus on delivering high-quality work that meets the client’s specifications.
Example: For Milestone 1, I begin working on the wireframe and design concept. I use the branding materials the client provided and create a draft design. Once it's complete, I’ll upload it to Upwork for the client’s review.
3.2. Deliver the Work for Review
After completing the work for the milestone, you’ll submit it to the client via Upwork’s platform. This is where you request the client to review the work and approve or request revisions.
Example: Once I’ve finished the design concept, I upload the file to Upwork and submit it for the client’s review with the following note: “Please review the design concept for the website homepage and let me know your feedback. I’ve included two variations as per our discussion.”
Be Specific: Make sure to clearly communicate what you’re submitting and what feedback or approval you’re expecting. This ensures that the client knows what to focus on and can approve or provide constructive feedback efficiently.
Step 4: Client Reviews and Approves the Milestone
4.1. Client Reviews the Work
The client will receive a notification that the milestone has been submitted for review. They’ll then have the opportunity to either approve the work or request revisions.
Example: The client receives the design concept, reviews it, and is satisfied with the result. They approve Milestone 1, and the $500 in escrow is released to me.
4.2. Release of Escrow Payment
Once the client approves the work, the funds in escrow are released, and you receive payment for that milestone.
Example: After approval of the initial design concept, the funds for Milestone 1 ($500) are automatically released from escrow and deposited into my Upwork account.
Escrow Release Confirmation: You will receive a confirmation from Upwork once the payment is released.
4.3. Address Revisions or Disputes
If the client requests revisions or is unsatisfied with the work, you’ll need to make the necessary adjustments. It’s important to maintain professional communication to ensure the work meets the client’s expectations.
Example: If the client requests that I adjust the color scheme or fonts, I make the necessary changes promptly. Once I resubmit the revised design, the client approves, and Milestone 1 is successfully completed.
Step 5: Proceed to the Next Milestones
5.1. Repeat the Process for Subsequent Milestones
Once Milestone 1 is completed and payment is received, you proceed to the next phase of the project, which will have its own set of deliverables, due dates, and funding requirements.
Example: I move on to Milestone 2, which involves building the full website based on the approved concept. Once completed, I submit it to the client for approval, just like we did with Milestone 1.
5.2. Continuous Communication
As you proceed with the milestones, continue maintaining open and transparent communication with your client. Regular updates on progress, challenges, and expected delivery times will help build trust and ensure the project is completed smoothly.
Example: I send a weekly update to the client regarding progress on the website build, including a list of features completed and any upcoming milestones.
Step 6: Finalizing the Project and Receiving Full Payment
6.1. Completing the Final Milestone
Once you’ve completed all milestones, you will submit the final deliverable, ensuring that all requirements are met.
Example: For Milestone 3, I complete the final revisions and submit the full website for client approval, ensuring that all requested changes have been made and the site is fully functional.
6.2. Receiving the Final Payment
Upon approval of the final deliverable, the final milestone payment is released, and the project is marked as complete.
Example: Once the client approves the final website, I receive the $500 payment for Milestone 3, and the project is officially completed.
Step 7: Closing the Contract and Receiving the Payment
7.1. Closing the Contract
After all milestones have been completed, you and the client can choose to close the contract on Upwork. This marks the official end of the project, and you will no longer be required to submit work or track time.
7.2. Withdrawing Funds
Once the funds for all milestones are released, you can withdraw the payment to your preferred payment method.
Example: I withdraw the total payment from the project to my PayPal account, completing the payment process for the real estate website design project.
Conclusion
Using milestone payments on Upwork is an excellent way to ensure that both freelancers and clients are protected throughout the duration of a fixed-price project. It provides a structure for payments that is tied to deliverables, ensuring timely and secure payments
. By following this step-by-step guide, you can successfully leverage Upwork’s Verified Payment System to ensure smooth transactions and a successful project completion.
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