How to get paid as a Freelancer - 6 popular payment method

Elena Prokopets
Written by Elena Prokopets
on June 12, 2023 11 minute read
This guide will help to explain you can get paid as a freelancer without delays, complexities and billing-induced headaches. You’ll learn about the best payment methods for freelancers, late payment prevention tactics and some extra handy tips. 


Tl;dr - How to get paid as a freelancer

Receiving payment is undoubtedly one of the most rewarding aspects of freelancing, symbolizing the fruit of your labor and dedication. However, it's critical to handle this process correctly to avoid any unnecessary delays or complications with your earnings. Understanding the various payment options available to both you and your clients is key to smooth transactions. In this article, we guide you through the: 



How to get paid as a freelancer 

To get paid by clients you need three things:

  • A self-employment registration (or use a service like Xolo Go)
  • An invoice 
  • A payment method 

If you’re legally obliged to register as self-employed in your country of residence, you must do so before invoicing clients. Otherwise, you risk tax and compliance issues — both are no joke. 

Invoices provide a record of goods or services sold, including quantities, prices, and payment terms. It serves both as a payment request and as a record of the transaction for both the freelancer and their client. 

To obtain payment, you must send an invoice to each client. Also, keep a personal invoice copy for bookkeeping purposes. You will need all the invoices to calculate and report your revenue during tax season. You can learn more about invoicing as a freelancer from our previous post. 

A payment method is your means for accepting funds from clients, ranging from a personal or business bank account to a mobile wallet app, and other options. 

Best payment methods for freelancers 

As freelancers, we get to pick a lot of things about our work, including ways to get paid. If you’re on the market for your first (or next) payment tool, here are our top recommendations. 

Bank transfer

A bank transfer (also known as a wire transfer) is the electronic transmission of funds from one account to another. You provide the client with your bank details — institution name, account number, BIC, etc. Then wait for the money to hit your account. 


  • SEPA transfers (💶 eurozone) 
  • ACH transfers (💵 US) 
  • SWIFT transfers (🌍 globally) 

On the backend, bank transfers are powered by highly-secure, scalable messaging networks such as SWIFT or SEPA. These establish rules and regulations for identifying account holders and correctly routing transactions. 

Overall, bank transfers are the most preferred payment method among freelancers (and their clients). It’s secure, traceable, and straightforward (most of the time). Plus, you can immediately spend your hard-earned cash via a debit card, associated with your account. 

The downside, however, is that cross-border bank transfers often include steep fees due to currency conversion and extra fees, charged by correspondent banks. 

Source: WallStreetMojo

Depending on your registration status, you may be either allowed to accept client payments to a personal bank account (sole trader) or will need to register a separate business bank account (if you operate as a registered business entity). 

You can get a bank account with a local financial institution or open a multi-currency one with an online bank like Revolut, Wise, or N26

Pros Cons
Low/no fees for local bank transfers 

High fees for cross-border transactions (use Wise to avoid these fees)
Preferred option by most businesses  Delayed payment processing during holidays
Fast access to money  Not an instant payment option 


Online payment processor 

A payment processor is a third-party tech app that facilitates online money exchanges. Unlike banks, payment processors aren’t regulated financial institutions (i.e., they don’t have a banking license and cannot provide a wide range of financial services). 

Effectively, a payment processing app acts as a bridge between the client’s payment method such as a debit card or a mobile wallet, and the freelancer’s bank account. 


An online payment app is a great add-on for accepting alternative client payment methods aka everything else but the bank transfer. Also, online payment requests are typically settled faster. 

Extra payment processing charges per transaction may be the downside here. These are typically between 1%-3.5%. Moreover, you will have to withdraw money to your bank account unless the payment processor offers a way to instantly spend them (e.g., via an issued prepaid card). 

Pros Cons
Instant client payments   Higher transaction fees, compared to bank transfers
Multiple payment methods supported Significant payment methods asymmetry among regions 
Integrated security and anti-fraud protection  Not all clients may be open to paying via a processor 

Invoicing app 

An invoicing app is a software that powers invoice creation, customization and management. Modern invoice generators also go a step ahead and offer integrated payment processing. In this case, a client receives a professional invoice, plus an option to select a payment method, and settles the invoice from one interface. 


Invoicing apps also include other handy billing features such as payment status tracking, low/no fee withdrawals to your bank account, automated tax calculators, and more! For example, with Xolo Go, you also get a business bank account number (IBAN), a VAT number to use, and a handy payment analytics dashboard among other goodies.  

Invoicing apps also help with recurring payment collection for productized services. In this case, you can pre-program an invoice generation sequence for your clients and avoid wasting time on manual dispatches. 

Pros Cons
Integration with accounting products  Limited number of payment options supported
Compliant invoice generation  Variable transaction and account maintenance fees
Affordable payment processing   


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Payment methods to avoid as a freelancer 

Although there are multiple ways to get paid as a freelancer, not every option is great. If you want to reduce the odds of delayed payments and accounting mishaps, avoid using the following payment methods. 


Paper checks are still surprisingly popular in some corners of the world. Long payment processing times are the first reason why these are a dysfunctional form of payment today. Checks get posted by snail mail and may even be lost in transit. 

Checks are also susceptible to fraud, since there are few guarantees that the check issuer has enough funds in their account or is even a legit person. An alarming 63% of businesses in the US faced fraud activity via checks last year. To avoid all of those troubles, it’s best to stay away from payments by check as a freelancer. 

Bank transfers to personal account 

If you operate as an incorporated legal entity (e.g., a limited liability company), you cannot accept client payments to a personal bank account. By commingling personal and business funds, you risk facing tax and compliance penalties. Open a business bank account as soon as your company incorporation paperwork gets issued. 

Cash (without an invoice) 

Most countries don’t prohibit freelancers from accepting payment in cash. But there are several caveats. The first one is that you still must provide a valid invoice to the client. Without one you risk tax penalties. The second one is that the cash transaction must always be conducted in the local currency (e.g., EUR → EUR). Lastly, tax reporting of cash transactions is more cumbersome, plus may trigger audits from the local tax office. 

Best payment methods for freelancers

How to get paid on time as a freelancer 

Getting paid and getting paid on time are often not the same things. 

A 2023 report by Sonovate found some substantial discrepancies in employee versus contractor payment experiences.

Over a quarter of businesses (28%) acknowledge that rigid payroll systems stand in the way of paying contract workers on time. Because of that 37% of medium-sized businesses may require over 90 days to pay their external workforce — three times longer than the average payday time for regular employees. 

Surveyed freelancers, in turn, overwhelmingly expect technological and admin improvements for prompt invoice payments (27%), timely timesheet processing (26%), more frequent pay runs (22%), and earlier or flexible access to payments (21%). 

While freelancer management systems (FMS) with integrated payment processing are changing these unhealthy payment dynamics, freelancers should still consider taking proactive steps for preventing late payments by 👇

1. Always signing work agreements 

A work-for-hire agreement is a legal contract, concluded between independent workers and employers hiring them. It details the scope of collaboration, liabilities and indemnities on both sides, as well as payment terms.

By countersigning a work agreement, both you and the client agree to respect the outlined payment conditions. In particular, you should detail:

  • The project price — total and any milestone-based payments 
  • Payment terms — a timeframe for making a payment (e.g., within 7 days) 
  • Agreed payment method — your bank account or another option 

In case of any mishaps, you can always direct the client toward the signed contract as proof of their obligations. 

2. Being upfront about payment terms

A payment term is the timeframe within which the invoice must be settled. Common payment terms in the business world include:

  • Cash on delivery (COD)/Due upon receipt — an instant payment upon the submission of an invoice 
  • Payment in advance — a deposit must be made before any services are provided. This is typical for retainers or fixed-price projects. 
  • NET 7/14/30 — the payment must be made within the specified number of days after receiving an invoice. 

Payment terms are arguably the main point of friction behind freelancers and their clients. 

Companies prefer longer payment terms because they might want to prioritize settling other account payables from suppliers or wait up until their customers pay them. Freelancers want shorter payment terms because we need that cash to fund our businesses and our life. 

To avoid this unhealthy dynamic, always negotiate your preferred payment terms. In case of severe pushback, you can also try this cool tip from Wudan Yan, a freelance journalist: 

“If a client stipulates 45, 60, or 90 days' payment after invoicing, you can negotiate your project rate such that it reflects the interest that accrues for payments made after 30 days.”

3. Triple-checking all the payment deets 

An invoice is a legal document. As such, it must comply with several requirements when it comes to format, contents, and taxes. 


Example of a compliant freelancer invoice, which includes a unique number, freelancer/client details, clear description of services, payments charged, VAT tax and payment details. 

Each invoice must include the correct client’s business details — company name, address, registration/tax number, etc, — and the same type of information from your side. In addition, you should add explanatory descriptions of rendered services. 

Sometimes, the clients may ask you to include specific project codes or other descriptors, which their billing team requires for attribution of the payment to a specific cost center. 

If you get any of those things mixed up, the client’s accountant may delay your invoice payment. 

The last thing you should check is VAT number requirements. Although freelancers don’t need to apply for a VAT number if they operate outside of the EU/UK, or don’t exceed a certain revenue threshold, larger companies may still request a VAT number. 

Pro tip: Don’t have a VAT? Try Xolo Go. With us, you can enjoy the benefits of having a VAT-registered company without having to register one. You’ll get a business bank account number and a VAT-compliant invoice generator for instant payment processing, plus several more tools for managing your freelance finances. 

4. Having multiple contact points in the company 

A lot of payment delays happen because of good ol’ process inefficiency. Your direct manager is swamped with work. The accountant goes on vacation. An editorial assistant forgets to forward your payment request, and so on. 

To avoid losing time to such inefficiencies (which aren’t really your problem), you should always have multiple points of contact with the company. Ideally, you should virtually get as close as possible to the person who hits “approve and send” on your payment request. In this case, you can always follow up with multiple people and ensure that your request gets routed where it should. 

5. Charging late payment fees

Another good way to get paid faster as a freelancer is to institute late fees — a compounding percentage of clients have to also settle for each day of payment delay. In the EU, businesses are legally authorized to charge a statutory interest rate of 8% above the European Central Bank’s reference rate. 

The caveat is that you cannot add late fees post-factum (i.e. after you have sent the invoice). A late fees clause must be stipulated in your work agreement and/or as a clause at the footer area of your invoice. 

6. Lawyering up (sort of)

If a client refuses to settle a bigger paycheck, it makes sense to lawyer up and seek justice. Yet, few freelancers do so since legal fees are expensive and, more times than not, might end up being higher than the outstanding invoice amount.

Soundly, the recent boom of generative AI is changing the ease and cost of getting legal aid. For example, you can try a DoNotPay – the world’s first robo-lawyer — to negotiate with the non-payer on your behalf. Or you can use Latch — a contract assistant, powered by GPT-4, which can generate tighter work agreements and clauses against non-payment. 

Bonus tip: Change your pricing model 

A bunch of late payments means crickets in your bank account. To better manage your business (and personal) cash flow as a freelancer, diversify your pricing strategies. Add more retainer clients to your mix who pay 100% upfront. Or start taking project deposits or milestone-based payments for larger projects. This way, you’ll always have extra cash to keep you afloat while invoices with longer payment terms get settled. 

How to write a late payment email (with templates!) 

Some 24% of freelancers admit that “being too tolerant towards late payments” was one of the beginner mistakes they’ve made. But timely payments are not an area where you should be timid. 

Repeat clients who always pay you late should be fired. Period. And those occasional late payers should be chased up (and slightly admonished). 

Here’s a quick and effective way to handle late payments as a freelancer: 

1. Set up calendar reminders

Unless you’re using an invoicing app with a payment status tracker, mark the dates when different invoices must hit your bank account. Then cross-check if each invoice arrives on time (or earlier). When there’s a delay, move on to the second step. 

2. Create a set of follow-up email templates 

Your next step is to create an automated system for chasing up late payments. Almost every email client lets you store pre-made email templates and program an auto-dispatch on particular dates. 

Your payment-chasing sequence needs three emails: 

  • A polite reminder: Send it 2 days before the invoice due date. 
  • A firmer inquiry: Due for dispatch one day after the invoice's overdue date 
  • An assertive demand:  The firmest letter, demanding clarifications about the outstanding payment, sent to multiple contacts. 

You can borrow my templates for late payment emails. 

Client late payment email templates

First email

Hello [Name], 

This is a quick reminder to let you know the Invoice [invoice number] will be due in two days. 

Let me know if you need any extra details for processing. 


[your name]


Second email

Hello [Name], 

The Invoice [invoice number] is now two days past the due date. It was due on [date].

Can you provide an ETA on the payment status, please?

I look forward to receiving an update. 


[your name]


Third email

Hello [Name], 

I have previously followed up about the payment status of invoice [number]. It is now [x] days overdue, which is in breach of our work agreement. 

As per our contract, a late payment fee of [%] is now applied for each subsequent day without payment. If no action is taken by your side, I will be forced to take legal measures by [final deadline].

It’s unfortunate to end our collaboration on such terms, but I am left with no other options. 


[your name]



3. Final warning: Send a Letter Before Action

A Letter Before Action is a written warning about a legal action you intend to pursue. It provides the last opportunity for the other party to resolve the non-payment issue before you file an official civil claim.

A standard Letter Before Action recaps the basis of the claim, suggests an option for the resolution, and sets a deadline for response or action. To add substance to it, it’s a good idea to reference relevant legal acts, covering freelancers. These include: 

You can find free and paid Letter Before Action templates online or ask ChatGPT to write one (it’s surprisingly good with that!), or pay a human lawyer to intimidate the non-paying client. 

Frequently Asked Questions about How Freelancer Payment Works

What are the best payment methods for freelancers and how do they compare?

The ideal payment method varies depending on factors like transaction fees, payment speed, and geographic limitations. Bank transfers, PayPal, and invoicing apps like Xolo Go are popular for their ease of use and global reach.

How can I ensure I get paid on time and avoid late payments from clients?

To avoid late payments, establish clear payment terms upfront, send invoices promptly, and consider using invoicing apps that allow for payment reminders and tracking. You can also consider using invoicing apps such as Xolo Go that enable you to send payment reminders to your clients.

How can invoicing apps like Xolo Go streamline the payment process for freelancers?
Invoicing apps like Xolo Go can automate much of the payment process, offering features like automatic invoice generation, payment tracking, and direct bank or card payment options, making transactions smoother for both freelancers and their clients.

What are the pros and cons of using bank transfers, online payment processors, and invoicing apps for freelance payments?

Bank transfers offer direct payments but may incur higher fees and slower processing times. Online payment processors like PayPal provide convenience but also come with fees. Invoicing apps balance convenience with features tailored for freelancers, including lower fees, expense tracking, and multi-currency support.


Getting paid for your work as a freelancer should be a source of excitement, not a pesky locus of pressure. Remember: You should never miss a personal bill payment or go into debt because your client(s) routinely pay you late. The above is a strong sign that you must (re)negotiate better payment terms, select an alternative payment method, or tweak your price structure. 

Also, don’t forget that late payments sometimes happen due to our own sloppiness: A missing VAT number, a misspelled company name or missing service descriptions. To avoid such goofs, automate as much of your invoicing process as you can via standardized templates and handy digital invoicing tools like Xolo Go

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About Elena

Elena Prokopets writes content for tech-led companies & software development businesses, marketing to them. Her empathy for the customer, expertise in SEO, and knack for storytelling help create content that ranks well and drives industry conversations.

Elena uses Xolo so she can focus on her solo B2B content writing business without stressing over the compliance and admin overhead.

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