Invoicing Question/Opinions

Scott F

Scott F

Pug Life
OK, well this business section has been re-named, I hope my question is still on target. This is geared toward those involved in corporate video work, not film. (Although the same scenarios may apply?)

I've been doing a lot of freelance work over the past two years, and my client base now includes some high-end agencies & production companies. My day-to-day work involves things like shooting & editing interviews, meetings, and editing various video packages. But it could be anything these days.

Now in my overall production experience, I always get paid. The problem is WHEN I get paid. And in this less-than-stellar economy, it can take a while.

The big two companies I work with are on what I perceive as a 60-90 day billing cycle. But as any freelancer knows, often we are on a "pay no mind" list. If I reach out to the agency to see what's the holdup, I often get the usual laundry list of excuses. Like I said, I always get paid, and these are great companies to work for. But I'm looking for a nice, but firm way to send a message.

So my question is, do you put a "late fee" on your invoices? An example would be "payment not received within 60 days will result in an additional charge of 10% of total invoice per month" or something along those lines.

I know many people do things like 1/3 up front, 1/3 day of shoot, 1/3 upon delivery. But that is not an option in my world. I have to bill AFTER job completion.

So I'm looking for advice on what you do, or any suggestions on what I should put on my invoices. I think 60 day grace period to pay would be a good number, but I'm looking for feedback.

best regards,
Scott
 
I've delt with this for many years....and it's just the nature of the business. Most of the companies pay on a 60-65 day cycle. It is what it is.... we do get paid, but the waiting is the hardest part!
I have found that building a good relationship with the media person who hired you...and having them get in touch with the AP department tends to move things along a little quicker.

I don't think adding a late fee will do anything (to be honest)...they really have us over a barrel. Phone calls are always best (emails are easily ignored). Be overly kind and try to befriend someone in AP. Like you said, the money is always there, don't cut your nose off dispite your face. It could always be worse.
 
Have all of your slow to pay clients give you a deposit before you start the job. If they complain explain to them (politely) that you are not their bank, you are their vendor, and if they want to do business with you, they should be business like & professional about it (note that this only works if you are business like & professional about it).

Offer them a nice discount if they pay immediately upon delivery, say 5%. Offer them a smaller discount if they pay withing 14 days (not 30, not 45, 14). Maybe 2%

Charge a late fee for anything over 30 days. 10% or more. Charge 25% if they're over 60 days. Take them to court if they're over 90 days.

Don't take on additional jobs for people who owe you money. Tell them that they need to settle up all outstanding invoices (and give you a deposit) before you can accept any new work from them.

If they complain about late fees, switch them to a 30% to 50% deposit before starting the job with full payment on delivery. No deposit, no job. No payment, no delivery.
 
I feel compelled to add, that if they paid for their equipment under these terms, it would be repossessed. If they paid their utilities this way, they'd be cut off. If they paid their office rent this way, they'd be evicted.

Don't we, as self employed people deserve the same as those other vendors? I think we do.
 
Guys, thanks for your feedback. Food for thought.

Don't we, as self employed people deserve the same as those other vendors?
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We do, but sometimes that's just not the case. I get paid eventually, I guess it's best not to burn bridges along the way.
 
I've never charged a late fee. But I have hassled a client for payment and dumped plenty of clients for being slack asses or they can't meet my rate.

I've found that the kind of clients I keep are the high paying ones and they tend to be the ones I dare not charge a late fee as I'm grateful for the big bucks.
 
Sorry Deep... I assumed you were talking about large corporate clients, that's who I deal with and where my advise comes from. If I do something for smaller companies, web developers or ad agencies, it's always 1/2 down...1/2 on final delivery.

That said, all my contracts for corporate go: 1/3 on contract signing, 1/3 on Beta delivery (roughs), 1/3 on Gold delivery (finals)....but each invoice is still 60-65 days until it's paid.
The idea is to get enough work lined-up so you have steady cashflow (I always shoot for 1 year out)...then you really don't have to worry & eveytime you head out to the mailbox, there's a check in there!
 
And people sometimes wonder why i love to shoot rap videos.... because we get paid, in cash, at the end of the day (usually with the bills that are being prominently displayed in the video).

Small guys pay right away, the big guys take their sweet time.
 
ZazaCast said:
Sorry Deep... I assumed you were talking about large corporate clients
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Yes, I think you've got it right. The small potato clients, I'll just call up and yell at. :Drogar-Angry(DBG):

I've found that the kind of clients I keep are the high paying ones and they tend to be the ones I dare not charge a late fee as I'm grateful for the big bucks.
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That's what I'm talking about. (but I'm just trying to weigh the options of a "scare tactic")
 
Patryk_Rebisz said:
And people sometimes wonder why i love to shoot rap videos.... because we get paid, in cash, at the end of the day (usually with the bills that are being prominently displayed in the video).

Small guys pay right away, the big guys take their sweet time.
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The only redeeming quality of shooting a rap video.
 
Scott, running corp. adv studios we had the same continual late payer problems.

I'd seen this working as a kid for other outfits, one of which went broke. So I figured I knew 3 things .. 1) we had to develop an offshoot business
2) pray for good staff and 3) we had to own our own building to avoid outrageous rent increases when the owner saw our business growing.

30yrs ago the 'off shoot' business was audio cassettes. Known for our studio mastering quality we bought an Otari high speed loop bin duplicator with 15 slaves and worked like blazes to secure a contract to supply daily background store music for most of the retail chains in Oz.

Keeping the weekly despatches on time meant I had to chip in with weekend work and occasionally sleep on the studio floor. Eventually we were shipping 6000x90 min cassettes weekly.

The good staff took a while to build up but it did and later we were able to buy our own building. We moved into CDs and DVDs and that built into its own biz with its own clients.

Visiting ethnic pop stars who flew in on Friday and wanted 500 CDs (no import duties) for their Sat. night debut concert paid COD, it was great.

Moral: look around outside the square you work in, there will be something :) Good luck.

Cheers.
 
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Patryk_Rebisz said:
And people sometimes wonder why i love to shoot rap videos.... because we get paid, in cash, at the end of the day (usually with the bills that are being prominently displayed in the video).

Small guys pay right away, the big guys take their sweet time.
Click to expand...

This is international :)
 
Ive dealt with clients large and small through 25 years of self employment and 3 businesses, so I feel qualified to comment. I hate to burn a bridge with a good customer, but....

I have always approached the issue up front with company reps and purchasing agents. I state what MY terms are, and usually they say....ok no problem, we'll work with you. Get cozy with the A/P person; a little shmoozing can help your cause. Get a purchase order for the job which states payment terms. Any good size company will always issue a PO with a number etc. Find out how their billing cycles run. For example, if they receive an invoice on the 25th of the month, when will it be paid. Work within their system. If a company pays on 30 day cycles and you send an invoice on the 2nd of the month, it won't get paid until the following cycle. On any long or large project, longer than a month, I insist on monthly progress payments and then work within their billing cycles to assure prompt payment. If someone just flat out says they pay 60 days net, I include a significant PITA fee in my quote, like 20%, or decline the work.

Grant
 
Deepfocus88 said:
So my question is, do you put a "late fee" on your invoices? An example would be "payment not received within 60 days will result in an additional charge of 10% of total invoice per month" or something along those lines.
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I had the same problem. It's pretty standard to charge interest and then fines if necessary. But get a lawyer to check the contract because if it goes to court the judge may decide the interest / fine clauses are not applicable - it comes down to contract law.

Best way, if you can, is get it all up-front. But that is not always possible.
 
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