Taskora

How escrow protects both clients and freelancers

What milestone escrow is, how funding, approval and release work, what happens in disputes and cancellations, and the mistakes that void protection.

By Tomás Rivera

Remote work between strangers has a trust problem at its core. The freelancer does not want to deliver work and then chase an unpaid invoice. The client does not want to pay up front and receive nothing. Escrow solves this by putting the money with a neutral party: funded before work starts, released only when the work is approved.

This article explains how milestone escrow works on Taskora, what each status means, and the habits that keep both sides protected.

The four stages of a milestone

1. Funded: the client deposits the milestone amount. It leaves their balance but does not yet reach the freelancer. Both sides see that the money is secured.
2. In progress: the freelancer starts work. Starting only after funding is the single most important habit for freelancers.
3. Submitted: the freelancer delivers the work through the contract with a note and files. The client is notified to review.
4. Released: the client approves the delivery and the amount is released to the freelancer’s balance, minus the 10% service fee.

A contract can have one milestone or many. Most successful fixed-price contracts on Taskora use three to five milestones of one to three weeks each, so neither side is ever exposed to more than a fraction of the total.

Why escrow protects the freelancer

• The money for the current milestone exists before you start — no working on promises.
• Clients cannot withdraw funded escrow on their own once work is submitted.
• If a client stops responding after you submit, the case can be resolved by moderators with the brief, conversation and files as evidence.
• Payment history on the platform builds your public record: total earned, success rate and reviews.

Why escrow protects the client

• You pay only for milestones you have approved.
• Funds for work that was never started can be refunded if the contract is cancelled.
• Disputed milestones stay locked until a decision is made, rather than being lost.
• Every delivery, message and approval is recorded in one place.

Escrow only protects work that happens on the platform. If someone asks you to pay or be paid by bank transfer, crypto or gift cards “to avoid fees”, it is the most common warning sign of a scam. Report it.

What happens when things go wrong

The client wants changes

This is normal and not a dispute. The client requests changes in the contract conversation, referencing the brief; the freelancer resubmits. Agreeing on the number of revision rounds up front keeps this healthy.

The scope has grown

If the client asks for work outside the original scope, the fair solution is a new milestone with its own amount, funded separately. Keeping additions out of existing milestones protects both sides and keeps the history clear.

The contract needs to end early

Either party can cancel when there is no funded-but-unreleased work. Escrow for milestones that were funded but never started is refunded to the client. If work was started, agree on a partial release first — for example, releasing half the milestone for the delivered half of the work — and then cancel.

The parties disagree

Either side can open a dispute from the contract page and explain what happened. The contract status becomes Disputed, the escrow stays locked, and a moderator reviews the brief, the milestone description, the conversation and the delivered files. The outcome can be a release, a refund or a split. Disputes are rare — well under 2% of contracts — and most are resolved by the parties themselves once a neutral party is involved.

The fee, explained

Taskora charges freelancers a flat 10% service fee on released payments. A $2,000 milestone therefore credits $1,800 to the freelancer’s available balance. Clients pay no marketplace fee. The fee is charged only on money that is actually released, never on proposals, cancelled contracts or refunds.

Habits that keep escrow working for you

For clients

• Fund the milestone before asking the freelancer to start.
• Write milestone titles as deliverables: “Homepage design, desktop and mobile” rather than “Design phase”.
• Review submissions within three working days and explain any change requests clearly.
• Release promptly when the work meets the brief — slow approvals are the most common complaint from freelancers.

For freelancers

• Never start a milestone that is not funded.
• Submit work through the contract, not only as a link in chat, so the delivery is recorded.
• Keep scope discussions and agreements in the contract conversation.
• Propose a new milestone for additional work rather than absorbing it into the current one.

A worked example

A client hires a designer to create a brand identity for $3,600 in three milestones: strategy and moodboards ($900), logo concepts and refinement ($1,500), and the final identity system with guidelines ($1,200). The client funds the first milestone; the designer starts, submits the moodboards a week later and the client approves. $900 is released and the designer’s balance grows by $810 after the fee.

The client funds the second milestone. After two revision rounds, the logo is approved and $1,500 is released. Before the third milestone, the client asks for additional social media templates. Instead of squeezing them into the guidelines milestone, the designer proposes a fourth milestone for $450. Both are funded and approved in turn. At the end, the client has paid exactly for what they approved, and the designer was never more than one milestone ahead of payment.

A note on this demo

Taskora is a demo product by AdScaled. Every step described here works in the product — funding, submitting, approving, releasing, refunds and disputes — but no payment provider is connected. All transactions are simulated and marked as such, and no real money is ever charged or paid out. The flows are designed exactly as a production escrow would behave, so you can explore them safely.

Good escrow is invisible when things go well and decisive when they do not. That is what lets two people who have never met do their best work together.