Billing, Lines of Credit and New Clients

[RocketRick]

To help prevent folks from turning your Net 10 (or Net 30) terms into Net 90 (or Net WheneverthehellIfeellikesendingyouacheck), be sure that your contracts, quotes, invoices, and all paperwork include a statement to the effect that no license to use the images in any way is granted until all payment is received in full. Also, include language establishing a substantial late payment penalty (something like "$100, or 25% of the total, whichever is greater"), and substantial late payment interest charges (10% per month on any unpaid balance, or something similar).

That way, if they take their sweet time, you get paid more. If they fail to pay you, and use the images anyway, you get to nail them for willful copyright infringement and, assuming you registered your copyrights, treble damages.

If they pay on time, you've got a great customer. If they don't, at least you get to make a decent buck from the deadbeats before you fire them as clients.

I am not a lawyer, so none of this is legal advice. Check with a real lawyer when you draw up your contacts.

[cyclohexane]

Big editorial clients like ESPN the Magazine will often ignore things like Net 30, despite claiming that. It's "Net 30" from whenever the individual booking your space actually gets your invoice to their billing department, which could be 90 to 180 days. Regarding ESPN the Magazine specifically, I'd recommend staying in touch with them and following up more than usual so you're paid on time, or they will absolutely drag their feet. (That reminds me, I need to get in touch with them about a no-longer-recent job for them, though I'm giving them some leeway because the guy handling my billing recently suffered a concussion )

I've found that in the editorial industry, Net 60 is often wishful thinking, and Net 90 is pretty standard, especially if it's the first time your invoices and tax forms are going through their billing department. After that first job, though, if you're a frequent repeat vendor for the client, they suddenly pay you within 30 days each time.

John Harrington, author of Best Business Practices for Photographers, suggests billing interest in the form of an administration fee if invoices aren't paid in the agreed time period, say, 30 days. If the job is paid in full in 30 days, then the fee is X; if it is paid after 30 days, then the fee is X + whatever percentage the administration fee is billed at. This is all spelled out in the contract, just as RocketRick has described.

[Bobby Deal]

Originally Posted by RocketRick

To help prevent folks from turning your Net 10 (or Net 30) terms into Net 90 (or Net WheneverthehellIfeellikesendingyouacheck), be sure that your contracts, quotes, invoices, and all paperwork include a statement to the effect that no license to use the images in any way is granted until all payment is received in full. Also, include language establishing a substantial late payment penalty (something like "$100, or 25% of the total, whichever is greater"), and substantial late payment interest charges (10% per month on any unpaid balance, or something similar).

That way, if they take their sweet time, you get paid more. If they fail to pay you, and use the images anyway, you get to nail them for willful copyright infringement and, assuming you registered your copyrights, treble damages.

If they pay on time, you've got a great customer. If they don't, at least you get to make a decent buck from the deadbeats before you fire them as clients.

I am not a lawyer, so none of this is legal advice. Check with a real lawyer when you draw up your contacts.

the amount of Penalties and interest one can attach to an invoice is generally regulated by law, I will have to look into it on my end to see what the max allowable is.

In all honesty though if someone is failing to pay adding interest and penalties on top of the principal is rarely going to be enough incentive them to pay. If they are not in position to pay principal additional fees wont make it easier to pay.

Like a lock on a door keeps an honest man out I suppose the idea of penalties for being late would prompt some to try and stay with in the agreed upon time.

[cyclohexane]

the amount of Penalties and interest one can attach to an invoice is generally regulated by law, I will have to look into it on my end to see what the max allowable is.

John Harrington is able to bill those penalties as "administrative fees as a result of required following up after 30 days" in the District of Columbia, but I'd guess that laws vary state to state. Harrington is a big time player and has his legal stuff in the up-and-up, so it's definitely doable, at least in D.C.

He covers this in great detail in his book, which everyone in this business should read:

Amazon.com: Best Business Practices for Photographers, Second Edition (9781435454293): John Harrington: Books

Amazon.com: Best Business Practices for Photographers, Second Edition (9781435454293): John Harrington: Books
Amazon.com: Best Business Practices for Photographers, Second Edition (9781435454293): John Harrington: Books

[cyclohexane]

Oh, hey, Bobby, if the ESPN the Magazine gig includes a photographer named Dustin Snipes, tell him hello for me (Michael Chen).

Originally Posted by Brooks

We don't grant reproduction rights until the invoice is paid in full.

I've only had to wait for money longer than that on a few occasions and those clients were restaurants.

Went back to this after my cursory skim of the thread before my first few replies. I've heard of this but can't believe I don't implement it.

It's unrealistic for timely news stuff as the images are reproduced sometimes minutes after I shoot them, but I can limit their reproduction of the rest of the take until payment is received in full.

[Bobby Deal]

ESPN Canceled 24 hours before the reserved date. Not sure who the shooter was scheduled to be but they said the client (was a jewelry shoot) requested the product be shot at his location rather then in a studio. To me this translates to we found some place cheaper as they said it was typical tabletop work that needed to be done.

Oh well at least now they know I am out there and when they actually need a studio to shoot in Vegas hopefully I will come to mind again for them.

[Mark McCall]

Commercial work has been Net 90 as long as I can remember.
Just the way it is.

For portraits and weddings, we have financing available. It's called Mastercard/Visa.

[Ed Shapiro]

I say- DO UNTO OTHERS...

It's 2012- NOT 1959. In the old days it was pretty easy yo get good credit terms for suppliers. All you had to do is call a lob, a bookbinder (album maker), a restoration suerice or a picture frame manufacturer, and as a professional photographer with a sales tax licenses and they would open an account for you. If you kept up with your bills- that was that!

Nowadays money is tight, there is all sorts of stock market fluctuations, fiscal matter all over the world affects our local economies and banking relations are very impersonal. I could float a loan with a telephone call because my bank manager knew I was good for the money. Nowadays- forget about that. We all have to do the drill, fill out the forms and work on a cash and carry bases with out suppliers and lines or credit and difficult to obtain. We order stuff on line and credit cards and Pay-Pal are the new currency.

In order to keep the cash flow going, I for one, cam not afford to maintain disproportionate levels of accounts receivable let alone a raft of slow payers or bad debts to contend with.

Theses days I find that weddings are the most volatile area where collection problems tend to happen. After the wedding can become a turbulent time for clients what with reality setting in where the find that they have broken the bank with wedding expenses. The also my be purchasing a new home and furnishing it and that in life in general that two persons can not live as cheaply as one. I have, in the past, experienced 2 weddings where the couple have broken up during their honeymoon! My contracts are set up whereby the final payment on the original order is made on or before the day of the wedding. Additional orders can be paid for upon completion of the order.

Corporate work- We ask a deposit on the first job and payment upon delivery and reproduction right are withheld until the entire job is paid for. On approved credit we extend terms as follows" 3% discount for COD- 2% discount 10 days- and Net 30 days. Overdue accounts will be charge a 5% per month and credit may be suspended until all balances are paid.

If this policy is questioned I simply explain that in the olden days manufactures and wholesalers gave their good customer a chance to sell some of the goods they purchase in order to be able to pay their bills in a timely fashion. In photographic services, there is no delay in benefits involved. We turn over the images- customers use the and that is the end of the transaction. Nowadays with digital imagery we may sent our images directly to the client or even the client's printer or advertising media for instantaneous reproduction- I wanna get paid ASAP.

90 DAYS? fORGETABOUTIT! i AM NOT WILLING TO PAY INTEREST ON MY LINE OF CREDIT TO SUPPLY SOMEONE ELSE'S BUSINESS! That has got to be the epitome of bad business.

GOVERNMENT BUSINESS? WELL WE ARE LOCATED IN OUR NATIONAL CAPITOL CITY! We do a lot of business with the federal, provincial and municipal governments. The used to pay in about 120 days. Bad on them! There were so many complaints that laws were passed to prevent this problem. All suppliers have to be paid within 30 days and the governments are now subject to interest and services where before we could not apply theses charges.

Funny thing- Big corporations love their discounts, that is, if their management teams have any brains in their heads. They are paying out millions of dollars and 1% to 5% adds up to BIG savings for the corporation at the ends of their fiscal years. We like to give the discounts as well barbecue they help keeping out chash flow circulating nicely. Our discounts also help us save all the money that can be lost in communicating with delinquent accounts in effort in securing back payments or engaging a third party to secure theses payments. Good business all around.

Ed

[Mark McCall]

Ed,
I'm surprised.
Weddings are the easiest to get paid from.
Don't get paid? Don't show up. Simple.

How many cake makers, florists, reception halls, DJs, bands or caterers allow you to pay after the wedding?
Photographer is no different.

[Ed Shapiro]

My contracts are set up whereby the final payment on the original order is made on or before the day of the wedding. Additional orders can be paid for upon completion of the order.
Ed[/QUOTE]

Mark! I agree with you 100%. No CHECK- No PHOTOGRAPHER. Most of my wedding clients pay me long before the wedding day- they don't want to bothered with business on their wedding day and just have fun!

My first boss told me that the first thing I needed to learn before he allowed me to even pick up a camera was to know how to ask for a deposit upon booking and how to collect the balance. He wanted to impress upon me the importance of the business aspects of the job. He even refused my offer to work without pay in order to secure the training. He said that nobody should work without pay! He said that I should not expect the same salary as an accomplished photographer but he firmly believed in a fair day's pay for a fair day's work. He taught me well.

Ed