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When freelance boards say “Escrow” they mean “ehscrew” June 8, 2007

Posted by Pontiff in ehscrew, escrow, freelance, freelance bidding.
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The two ways escrow can work :

  1. Prefunded series of milestone payments. Each payment is fully funded in escrow before the project starts so in effect the entire amount is in escrow and payments are released as the project moves through the milestones .
  2. One single payout at the end where full payment is escrowed and due on completion but there is no release of milestone payments.

That would pretty much cover the rational uses of Escrow. It would make no sense to require that milestone payment be put into escrow AFTER the milestone is met. That is when a payment is made.

The only variations on these themes are whether there are many milestones or half up front and half at the end ect. We opt for a reasonable division of milestones that take into account a variety of factors.

The first of the four payments is (or whatever number) due upon the project start. Whether it is first put into and escrow account and then released or just directly paid is not much different other than the delay factor which can be about a week.

There ‘s allot of work that goes into just setting these projects up on the server and in the system There is also a good deal of time spend communicating, creating contracts and various other things like explaining how the escrow services work or don’t work as offered by the freelance bidding boards.

On our end the project ‘started’ when we stated answering questions and requires a certain amount of time.. There is always risk and we weigh our likelihood of return as we get into these. We just don’t answer those clients who seem likely to be just looking for information, have no funds, or have no idea what they want.

So the milestones we setup set up are not for escrow accounts. We don’t require escrow on purpose for it makes no sense from any reasonable perspective. Why would we tie up your money for two months? It doesn’t help me if I’m going to do the work anyway. It only helps if I’m not planning on delivering and can use your tied up money as a bargaining chip. This is more or less why the whole escrow thing is just BS as it is the first tip off that you’re going to get shafted.

In the same vein we do not work on projects where the entire amount is escrowed and payment is proffered only at the end of the project. That last scenario is something that is wholly created by some of the early freelance boards to induce people to setup small projects and is not workable for anything that takes more than a days work to accomplish.

Often the projects are offered by people who for various reasons don’t understand the level of work that is involved. Further its easy to lose sight of the fact that the work is performed by humans who have families and obligations. When you don’t see people or interact directly its easier to ignore they are people really and treat them like an extension of the web browser or part of the computer or virtual world and therefor less human.

This isn’t the form for a long and detailed explanation but suffice to say that a good percentage of the projects are setup by people who have zero understanding the amount of time and money that is expended developing these applications. Another large percentage are setup by people who tend to have short attention spans. Often both. Bottom line is that many decide that they didn’t want to do a web application at all and have decided to go to Tibet and study with the Monks (this happened to an associate btw).