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How does Elance Escrow help clients manage fixed price jobs?

elance_garnor
posted this on March 26, 2013 11:37 AM

Elance Escrow is a safe and efficient way to pay for work delivered online. Once a job is awarded, the client and freelancer define and agree upon milestones, and funds are then placed into Escrow. Freelancers can quickly and safely begin working knowing that payment is secure and will be released once work is completed, and clients are protected knowing their funds are securely held in Escrow and will only be released to the freelancer when work is delivered and accepted.

Are you a freelancer? Click here to learn how Elance Escrow can help you manage your Fixed Price job.

Benefits:

  • Pay Only for Results: Avoid taking risks and only release funds when you approve work.
  • Jump-Start Jobs: Freelancers can immediately begin working knowing that funds are readily available.
  • Both clients and freelancers are eligible for Elance Dispute Assistance in the event that a job does not go as planned.

Note: Elance will send an Escrow Closing Statement to both parties at the completion of the job. This statement provides a summary view of the escrow payments made between both parties. This statement is for information purposes only (as part of Elance's escrow compliance).

How does Elance Escrow work?

After you award a fixed price job and negotiate terms with your freelancer, it's time to fund Escrow. This signals to the freelancer that funds are available for the job and gets the work started. If you have set up more than one milestone for your job, you'll want to fund Escrow for the first milestone at a minimum, and optionally fund additional milestones.

Note: Escrow is only available for Fixed Price jobs. Escrow is not available for hourly jobs. Working on an hourly job? Learn more about how Work ViewTM can help you manage your hourly jobs here.

Once a milestone has been completed, the freelancer will submit a status report. The status report will serve as a pro-forma invoice and will reference the completed milestone. If you are satisfied with the work, you have 15 days to release the funds before the payment is marked as "Overdue." If you are not satisfied with the services from your freelancer or if they did not meet the requirements of your Job Agreement, do not approve the release of any milestones.

How do clients fund milestones?

To fund a job milestone, log in to your Elance account and follow the steps below:

  1. Click the Manage tab in the top navigation bar and select Payments from the drop down list.
  2. Next, click on the Make Payment link located on the second row of the navigation bar.
  3. Select the radio button to the left of the job name you want to fund and click Next.
  4. On the Payments page, click Fund for your particular milestone. Fund is located in the 'Escrow Funding and Release' section of the page.
  5. Select your payment method and check the box.
  6. Select the Submit Funds button.

The freelancer will receive a notification when you fund job milestones. Remember, the freelancer is not obligated to begin work until at least one job milestone has been funded by the client.

How do clients approve and pay for completed milestones?

The freelancer will submit status reports when a milestone has been completed. If you are satisfied with the work, you should release the funds in escrow for the completed milestone. To release a payment for a job milestone, log in to your Elance account and follow the steps below:

  1. Click the Manage tab in the top navigation bar and then select Payments from the drop down list.
  2. Next, click on the Make Payment link located on the second row of the navigation bar.
  3. Select the radio button to the left of the job name you want to make a payment for and click the Next button.On the Payments page, in the 'Escrow Funding and Release' section, click the Release button for your particular milestone.
  4. Check the box that you acknowledge Elance's Billing & Payment Service Policy.
  5. Select the Release button.

Note: If you don't respond to a freelancer's request for release of funds, funds in escrow will be automatically released to the freelancer 30 days after the freelancer has requested release. If you are not satisfied with the services from your freelancer or if they did not meet the requirements of your Job Agreement, you will need to either adjust the terms of the job or file a Dispute to stop the funds from being released. To learn more about Dispute Assistance for Fixed Price jobs, click here.

To request a refund of funds still held in Escrow, you can adjust the terms by deleting or reducing a milestone. If the freelancer approves, the funds in escrow will be returned to the original payment source. If the freelancer does not agree to a terms change, you will need to file a Dispute.

How do clients stop the release of funds in Escrow?

If you and your freelancer agree that a milestone should not be released, even though the request for release has already been submitted, you have a couple of options:

  • Ask your freelancer to void the release request. Once this process has been completed by your freelancer, the previous release request will be nullified and the funds will not be released. When the milestone is complete, the freelancer will need to request the release again by submitting a status report.
  • File a dispute. See below for more information on filling a dispute.

How do clients initiate dispute assistance?

If you and your freelancer do not agree to resolve the issue by having the freelancer void the release request and you are not satisfied with the quality of the work, you will want to file a dispute. You may initiate the Dispute Resolution process by following the steps below:

  1. Log in to your account.
  2. Visit the My Elance page from the top navigation bar.
  3. Click the appropriate job name.
  4. On the left menu, click More ... and then the Refund, Cancel or Dispute link.
  5. Select the File a Request button.Complete the Dispute Form and click the green Submit form.

For more information about the Dispute Assistance process, click here.

Why does my fund Escrow status show 'Pending'?

Elance allows clients to use credit cards that have not been authenticated to initiate funding of the initial milestone. In this case, the escrow milestone will appear as 'Pending' to the freelancer. These funds in escrow are not available for release until the authentication process is completed by the client.

The status of the milestone will automatically update to 'Funded' when the client completes the authentication process.

Elance encourages clients to complete the authentication process in a timely manner since freelancers are not obligated to start working until the milestone is funded.

What is a Dormant Job Escrow account?

If a job has an Escrow account with a balance but has had no activity for sixty (60) consecutive days after the last milestone date specified in the Terms, the job is considered to be "Dormant."

Any of the following actions qualify as "activity" before the job Escrow account is considered dormant. 

  • Terms change request or acceptance
  • Escrow funding request
  • Escrow funding
  • Escrow release request
  • Escrow release
  • Escrow refund
  • Job cancellation request
  • Timesheet submittal
  • Status Report submittal
  • Any action completed as part of the Dispute Resolution Process

Balances in a Dormant Job Escrow Account are subject to the following:

  • Elance will notify the client by their registered email address when jobs become dormant.
  • If no activity has occurred, other than release requests, within seven (7) days after the Dormant Date, Elance will notify the freelancer by their registered email address that the job is dormant.
  • If no activity, other than release requests, has occurred within a further seven (7) days (fourteen (14) days from the Dormant Date), the following will apply:
  1. Milestones with release requests that are thirty (30) days or older shall be immediately released to the freelancer.
  2. Milestones with release requests younger than thirty (30) days shall be released to the freelancer in thirty (30) days from the date of the applicable release request.
  3. Milestones with no prior release requests will be immediately released to the client.

To reactivate your job's Escrow account, i.e. remove it from a "dormant" status, one of the following actions must take place:

Clients:

  • Terms change request or acceptance
  • Escrow release
  • Job cancel request

Freelancers:

  • Terms change request or acceptance
  • Escrow release request

Note: All releases from Dormant Job Escrow Accounts shall be subject to the applicable Elance Service Fees and Payment Processing Fees described in the User Agreement.

For more information, please review Fixed Price Escrow Instructions here.

What is Elance Escrow Payment Protection?

With Elance Escrow clients pay only for work received and freelancers get paid for work delivered and accepted. Specific terms and guidelines apply. Click the links below to learn more.

 
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