Payment trust
7 min read
Updated 2026-05-18
How Software Project Escrow Should Work
How milestone funding, client fee visibility, facilitator payout readiness, and release approvals fit together in software delivery escrow.
Key takeaways
- check_circleEscrow is most useful when it is tied to concrete milestone outcomes.
- check_circlePayment state should be visible before delivery starts and before release approval.
- check_circleA strong escrow workflow records funding, submission, review, release, refund, and dispute context.
Escrow needs a review standard
Software escrow gets weak when the payment is funded but the release standard is vague. A buyer may feel protected, but the facilitator may still be guessing what evidence will trigger approval.
The safer pattern is milestone escrow: fund the next defined outcome, then release after the buyer can inspect the promised evidence.
The states that matter
A useful escrow workflow should make the project state legible to both sides. The state labels do not have to be complicated, but they do need to be consistent.
- task_altPending: the milestone exists but has not been funded.
- task_altFunded: payment is held before the facilitator starts delivery work.
- task_altSubmitted: delivery evidence has been attached for buyer review.
- task_altAudited: the submission has been checked against the milestone scope.
- task_altApproved and paid: the buyer approved release and payout records were created.
- task_altDisputed or refunded: the record explains what happened and why.
Fee clarity is part of trust
Buyers should see the milestone amount, client fee, total due, and facilitator payout before checkout. Facilitators should know whether their quoted rate is being reduced by platform fees.
BeUntethered uses a client-side fee model: marketplace projects carry an 8% client fee, BYOC projects carry a 5% client fee, and facilitators keep 100% of the accepted milestone rate before ordinary payment processing effects.
Escrow is not a substitute for evidence
Holding funds helps, but it does not decide whether the software works. That decision still depends on the locked scope, acceptance criteria, submitted proof, and buyer review.
That is why BeUntethered connects escrow state to delivery evidence and dispute context instead of treating payment as a separate workflow.