Client that questions bid and invoice?

[Paul Hudson]

I have a client that approves bids then questions the invoice when it comes in for the bid amount or less. This client wants to see all my documentation. I really am just about done with them. Anyone have this problem? How do you deal with it?

 

[Erik Olson]

If you are an outside vendor who provides a clear topline budget against a particular mandate, then you should avoid showing any subsequent line-item level actuals in your invoicing. There are two caveats to this rule that I'll talk about below.

Our proposals include milestones, most often tied to the major production phases, against which the client pays installments. The milestones are: contract / commencement of pre-production; commencement of physical production; commencement of post-production; completion of post / deliverables; marketing.

Each phase has an estimated dollar amount against it based on our Movie Magic budget. Depending on the client, their level of involvement and the fluidity of the project itself, we have a contingency of between 10 and 20% of the total budget.

Here are the instances where we become more transparent with our accounting.

1. The underwriter / client / commissioning network demands accounting transparency in advance. Little you can do about this. Provide a defensible budget up front using line-production best practices and keep the production and associated accounting in line through every phase.
2. Tapping the Contingency. Our policy is that if we get into the contingency for whatever reason, we will let the client know it is about to happen - in advance. Provide them with an estimate of the overages, in writing, whenever possible. A good production can run into trouble on its own, but most often, we will go over because a client starts to make significant changes mid-production. Be prepared to show them the differential even when the overage is their fault.

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[wahrez]

If the bid is accepted work out a requirement specification that details everything that is needed to get the job done, a schedule and an accurate quote for the work, these documents should then form the basis of a contract. You should as a standard work your payment in to the schedule. Usually I would do 40% on signature of contract, 40% on principal photography and the remaining 20% on delivery. - In your budget you may want to stipulate a contingency (usually 10%) for overruns etc. Always ensure that the client agrees to this being used before you spend any of the contingency. Keep all your receipts and keep everything transparent so the client knows they can trust you.

Remember you own the copyright until you assign the rights to the client. So ultimately if they don't pay you can ban them from making use of the material.

These things always leave a bad taste and I've been burnt many times myself!

 

[Paul Hudson]

Thanks for the replies. Here is what bugs me most; the invoice in question here is for about $1000 less than the estimate (that was approved). And still the questions. I have done work for these guys for a while, they love the work but the bean counters insist on digging in my books. I am not sure I want a client where their is not complete trust on both our parts. That is why I give a budget that they sign off on. I never go over unless they make changes.