Managing payments is an often complex process for independent consultants — and the complexity increases if you’re working with a larger organization. Catalant streamlines payments for all independent consultants who find work through the platform, a benefit that typically results in better terms compared to those you get when working directly with clients.

This article covers how payments work on Catalant, and includes tips and recommendations on how to price your work.

• Jump to: Tips for Billing on Catalant
• Jump to: Payments to Independent Consultants Catalant 

Benefits of Catalant’s Payments Process

There are several benefits of Catalant’s payment process for independent consultants. 

• Working on projects sourced through Catalant’s Marketplace ensures you will be paid for the work you provide¹, and protects all consultants from having to chase down invoices from clients.

• Catalant is able to facilitate reliable payment due to the terms and best practices clients agree to follow when using our platform. 

• Catalant keeps all payment-related information in a single location, and our internal collections team coordinates payments for you by managing the work on your behalf. 

• Catalant helps independent consultants and boutique consultancies gain access to clients they would typically have a hard time working with due to contracting and payment complexity. 

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Tips for Billing on Catalant

Here are a few tips that you can apply when deciding on a payment structure (how to get paid and what to charge) for the projects you complete on Catalant. 

1. Choose the right pricing structure for your project.

On Catalant, there’s a lot of flexibility when it comes to your pricing structure. Here are your options.

Fixed Structure

Fixed pricing may also be referred to as project-based or engagement-based pricing. It’s the fee structure we recommend since it’s predictable (which helps you avoid potential friction with your client), requires less administrative work compared to variable pricing, and gets you paid faster. 

Prior to project kick-off, you and your client identify milestones that, upon hitting, signal it’s time to submit a payment request. For example, you and your client may agree that you’ll invoice 25% of your project payment at kick-off, another 25% at the mid-point, and the remaining 50% when you submit your deliverable. 

By invoicing that 25% fee at kick-off, you improve your cash flow. This is why you’ll notice that when you choose a “fixed rate” payment structure in Catalant, invoicing 25% of your total fee is automatically selected for you (though, you can adjust this amount if you’d like to).

Another option is to identify certain deliverables that you’ll submit and then request payment for. For example, if a project requires you to create four major deliverables, request payment after submitting each deliverable to your client. 

Fixed-Monthly Rate

There’s also an option on Catalant for fixed-monthly pricing. Request payment from your client on a monthly basis. Again, consider cash flow when selecting this payment structure. 

For example, say you’ve scoped a project to be two months long with a fixed rate of $250 per day of work. To complete the project in the pre-determined time frame, you’ll work two days per week. Rather than charging the client $500 at the end of every week for two days of work, you can use the fixed monthly structure to request $2,000 at the start of each month.

Variable Structure

A variable payment structure requires you to determine an hourly or daily rate,  the estimated number of hours the project will take you to complete, and a proposed payment schedule. Throughout the duration of the project, you, the independent consultant, submit timesheets in the Catalant platform to report hours worked and submit them for client approval. After the client approves, Catalant pays you. Note that it’s your job to remember when you need to submit those timesheets to bill your client. 

Some consultants like this approach because it seems straightforward. However, it has the potential to lead to misalignment with a client since it’s more difficult to justify an hourly rate than a fee based on the value of a deliverable and may result in less predictable cash flow or overall lower effective rates. 

2. Determine your rates.

In addition to selecting a payment structure, you must also decide what you’re doing to charge clients. The key is thinking about the value that your work will create for your client — that’s how the most successful consultants price their work and it’s how large firms determine their rates, too. 

You should also consider what’s fair market value. (If a past client paid you above market value for your work, that doesn’t mean you should assume all other clients will do the same.) When determining your rate, consider the following information and benchmarks:

1. The value that you and your experience bring to the table
2. The perceived value of your deliverable to your client
3. How long a project will take/how many hours you’ll be putting in
4. What other independent consultants in your segment(s) are charging
5. Compensation studies and research
6. Your cash flow needs and expectations
7. Your payment structure

When referencing your payment structure to determine your rate, you might use one of the following formulas. These are common in the independent consulting industry.

Calculating Rates for Fixed Structures

Determine what annual salary you want to make as a full-time independent consultant. Take that salary and divide it by 52 (the number of working weeks per year). Then, divide that number by 40 (the number of working hours per week). Mark up the resulting number by 25-40%, depending on your experience and the value of your work, to account for the cost of benefits, taxes, or overhead. Then you have your rate. 

Calculating Rates for Variable Structures

When it comes to calculating hourly and daily rates, take your daily rate while working as a salaried employee/consultant. Then add a premium to find your hourly rate. For example, “A $100K salary + 40% premium means your daily rate is $538.” Your half-day rate is 75% of your full-day rate, and your hourly rate is 30% of the half-day rate. Why? Because it becomes incrementally harder to fill leftover half-days or sporadic hours of open time, so the best practice is to charge a higher premium on smaller increments of time.  

Additional Considerations When Setting Your Rates:

• Put forth the fee that you want to take home, disregarding any fees that Catalant charges your client. We consistently see that fees do not determine who a client selects — it always comes down to proven expertise.
• If you believe your project deliverables are of greater value than what other independent consultants can produce due to your experience and subject matter expertise, consider billing a value-based rate. 
• If value-based pricing is of interest, add past work examples and deliverables to your profiles on Catalant to show what you’re capable of. This will build a case around your billing structure (and help you stand out on the platform). 
• At Catalant, we find that some independent consultants overestimate how long it may take them to complete a project. They then reduce their rate to suit the client’s budget within their extended time frame. However, in hindsight, this is often unnecessary. Really consider how long it’ll take you to finish a client project — you may be able to keep your rate as is, lower the number of hours it will take you to finish the project to stay within your client’s budget, and finish your project right on time.

Interested in learning more about how independent consultants get paid through Catalant? Continue reading. 

Payments to Independent Consultants on Catalant 

When you’re hired for work through Catalant’s Marketplace, you are paid through the platform, not directly by the client. Catalant, through its third-party payment processor Payoneer, coordinates all approved payments to you across the projects that you win. 

To receive your approved project payments, you must have an account with Payoneer and submit your tax form (W-9/W-8) to them. To do this, navigate to the Payments Section of your Account Settings in your Catalant profile. 

Click the prompt to register an account with Payoneer. You’ll be redirected to Payoneer’s website where you can create an account and submit your tax form. If you have an existing account, sign in and your account will be connected to Catalant’s Payoneer program.

Once your account is set up, you’ll share a proposal with a client. If that client accepts your proposal, you’ll create a submission schedule that lists the estimated dates on which you will submit invoices for your completed work or the time you worked. These invoices are submitted for your client’s review and approval. 

Once the client approves your submission, it’s entered for processing. Payments are made under Catalant’s standard payment terms from the date of the client’s approval. You can see the payment dates for your approved project work in the Calendar widget of your Catalant dashboard. Payments for all new projects on Catalant’s Expert Marketplace are processed with net 60-day payment terms.

Your payment is tied to the date the client approves your submission, regardless of when Catalant is actually paid by the client. That means if the client hasn’t paid Catalant in 60 days, you still get paid by Catalant. This protects you from lengthy back and forth with a client’s accounts payable department. Catalant has an internal team dedicated to managing invoices and collecting payments so you can focus on what you do best.

¹In rare instances, Catalant may need to withhold payment to Experts if the payment is disputed by clients until the dispute is resolved.