Getting paid

[junglee]

So I've been operating my business for over 6 yrs now.

My on going problem is late payments. We have formal contract/invoice and follow up system but I think the problem is way I start my jobs. We start the job without any retainers and I issue an invoice once the job is done. This became normal as most of my clients are through my old companies or friends. But as my business grew, this became a problem as overheads are growing and late payments were stressing my bank. My average payment turn around time is 1~3 months.

 

How do you guys charge your clients? Please share your payment structure and schedule.

 

Thank you in advance.

 

Jung

Edited September 14, 2017 by junglee

[Justin Hunt]

25-50% deposit and final payment on delivery, agreed to before the project starts

[Devin Johnston]

A deposit is a good way to go but I can see where even with that it may not be enough to cover all your costs. You could always try instant payments using PayPal, this would guarantee that you get paid as soon as your ready to turn over the imagery.

[Ernest Burden III]

25-50% deposit and final payment on delivery, agreed to before the project starts

 

I usually do 50/50 retainer/COD (COD translates into 30 days before you can raise a stink, but net30 means you can't yell till 60 days). I sometimes work without the retainer for clients that have been reliable and reasonable for years, but usually that caliber of client doesn't mind the retainer.

 

Some people do 1/3, 1/3, 1/3 with retainer, approved layouts and final. That's a good model, but if the project turnaround is a week and a half, it's just too crazy-making for all involved.

[junglee]

I didn't understand you. You deliver the work and then your clients can pay whenever they want?

 

I'm not experimented as I just do freelance, but personally I send watermarked and low res images to clients, t'ill they pay I deliver back the finished product.

 

I've seen too many artists currently doing all they can just to 'satisfy' their ungrateful clients, and the result is... artists being more and more devaluated.

 

Personally I don't give a shit, there's a difference between work and slavery, If the client is too picky or I feel that he is avoiding payment, I stop the work immediately.

as long as I have money to buy food it's ok I don't really care lol

 

If it's a random client with small job, it would be essential to get paid as soon as job is done but it works slightly different when you are working with long term clients on big jobs. 99% of my clients are long term clients with large projects, so payment schedule gets little tricky due to the pace and change orders during the process. It is my mistake that I didn't establish a rule of "deposit" as they were my close co-workers to begin with.

[junglee]

A deposit is a good way to go but I can see where even with that it may not be enough to cover all your costs. You could always try instant payments using PayPal, this would guarantee that you get paid as soon as your ready to turn over the imagery.

 

This is an interesting idea. So do you typically get paid via Paypal or other electronic method? How does your client feel about it?

My clients are all well known design companies and I would like to keep myself as professional as possible.

Edited September 15, 2017 by junglee

[junglee]

I usually do 50/50 retainer/COD (COD translates into 30 days before you can raise a stink, but net30 means you can't yell till 60 days). I sometimes work without the retainer for clients that have been reliable and reasonable for years, but usually that caliber of client doesn't mind the retainer.

 

Some people do 1/3, 1/3, 1/3 with retainer, approved layouts and final. That's a good model, but if the project turnaround is a week and a half, it's just too crazy-making for all involved.

 

Yes, this is typical for me except the retainer part. Clients have 30 days to make a payment and about 50% make it on time and other 30% make it in 60 days, and rest 20% make on 90 days period. 50% of the clients want to get their portion paid from their clients before releasing a check to me so 60~90 days are typical for those clients. I think getting deposit will fix some of my overhead cost problems.

[Ernest Burden III]

...getting deposit will fix some of my overhead cost problems.

 

That

[Devin Johnston]

This is an interesting idea. So do you typically get paid via Paypal or other electronic method? How does your client feel about it?

My clients are all well known design companies and I would like to keep myself as professional as possible.

 

This attitude always surprises me, why do people in our line of work think that it's unprofessional to expect to be paid at the time of delivery?

 

I told my clients that I was moving to a new payment system and that before I hand off the imagery the bill had to be paid. Some didn't like it but in the end most accepted it without too much fuss. If you put this in your contract there's little they can say about it but for those that don't want to play ball invoice them as usual.

[Scott Schroeder]

Have the payment talk at the very first meeting, so both you and your client know what you expect moving forward. We pay our contractors on either a pay you when we get paid, or net90 system. We do, before you all light your tiki torches, make exceptions for freelancers/sole practitioners to pay net30 when our billing cycles are run.

 

The bean counters that handle the bills don't always make the disassociation between a massive engineering firm that does our MEP drawings for months on end and a sole freelancer doing a small graphics package with a short turn-around time.

[Josef Wienerroither]

Similar situation here as the original poster. But i got burnt 2 times already because those friends ( small freelancers/one man companies themself) got into financial troubles during/ short after the project for various reasons. Lost about €13K payment for already completed work because i was too trusting, so i now do the 30-50% retainer thing too at project start ...

[junglee]

This attitude always surprises me, why do people in our line of work think that it's unprofessional to expect to be paid at the time of delivery?

 

I told my clients that I was moving to a new payment system and that before I hand off the imagery the bill had to be paid. Some didn't like it but in the end most accepted it without too much fuss. If you put this in your contract there's little they can say about it but for those that don't want to play ball invoice them as usual.

 

In what form do you request your final payment?

[Justin Hunt]

I haven't dealt with checks in years, direct deposit into my bank account is so much easier for my clients and myself, plus there is no waiting for checks to clear.

[Ernest Burden III]

I haven't dealt with checks in years, direct deposit into my bank account is so much easier for my clients and myself, plus there is no waiting for checks to clear.

 

Some clients just won't do wire transfers, so I still get some checks. Also, in the US, if a wire is from outside the country, there is a clearing time. I think it has to do with someone having to fax a paper to someone. Anyway, it's a delay of several days. But generally, I try to get all clients to pay by bank transfer.

[notamondayfan]

Here in the UK, 30 days is the norm, but 60 or even 90 days can be expected. I very rarely get paid upon completion, and the only times I've insisted on this is when working for non UK based companies. With UK based companies I have some protection with the laws, however I imagine trying to get someone, especially who is outside of the EU, to pay through the courts, could be very difficult and expensive.

 

For small jobs, I don't ask for a deposit, but for anything larger then a deposit is needed. I find deposits are a trust thing, rather than a cash flow thing. A client is putting a lot of trust in you when they pay the deposit, especially if it's the first time you've worked together. You could easily disappear with the deposit, never to be seen again. Also in return you need to trust your client that they will pay on time, and the agreed amount.

 

In terms of actually receiving the cash, persistence is the key. As soon as the invoice is over the 30 days, get on the phone and call. Then keep calling!

[Justin Hunt]

Here in Oz, so many banks have closed their local branches and add extra fees to do over the counter transactions, wire transfers and internet banking is the only way to go. Clients actually prefer it, often doing a transfer whilst we are on the phone so that by the time we a finished talking the money in in my account already.

 

Personally I haven't dealt with cash in years, almost forgotten what it looks like