Surefire Method to Getting Paid
Many of us perform work for other video production companies, independent producers or advertising agencies on a regular basis. If you don’t, you should consider developing relationships with these types of businesses because they can provide a great stream of project opportunities, which generate additional streams of revenue for your video business. However, it is pretty common when working for these types of companies that you will wait a LONG time to get paid. In fact, the thought process among most of these companies is that THEY’LL PAY YOU WHEN THEY GET PAID. I have found that most of my clients that represent these types of companies will pay me in 45-60 days, which isn’t too bad because we have so many other projects working at the same time. However it hasn’t always been that way. There were times when I desperately needed payment to be made within 30 days after performing the work. Here are some of the tactics I’ve learned over the years to speed up payment:
1. Submit your invoice as early as possible to the client. Even before you actually perform the work. If they ask why you are giving it to them so early, tell them that you want to make sure it gets paid no later than 30 days so you’d like them to go ahead and put it in their accounts payable system. This shows your client at an early stage that you are focused on receiving payment and should help them to focus on getting you paid as well. If you can’t get the invoice to them before the project begins, get it to your client immediately after the event or project is complete. Within 24 hours would be ideal. Again, the project is still fresh on their mind and your promptness will reiterate the importance of paying you as soon as possible.
2. Have them sign a contract that specifies payment terms and make part of those terms a 50% deposit in order for you to book the date or project. Some producers and agencies will squirm because they typically don’t have the cash on hand to pay you the 50%. When this is the case, simply suggest that they have their client come up with the 50%. If they are unable to get you the 50% or refuse to even try, this is an indicator that they won’t be able to pay you until their client pays them….which means you could be waiting a LONG time before getting a paycheck after the project is complete.
3. Send an email to your client or call them on the phone to ask them when you can expect payment to be made. Also, ask them if there is anything that you left out in the invoicing process that may delay payment. Tell them that you really need this payment to be made on time so to let you know ASAP if anything comes up that will delay payment. I usually start making these calls two weeks after project has been completed. This way, the client has two weeks to figure out whether or not there will be a problem processing my payment. In many cases, this is when they will admit that they won’t be able to pay me until they get paid. When this happens, I ask them what their plan is to make sure they get paid on time. Then I leave it alone….for now.
4. After the payment is late, which with these types of clients it usually is at least a week overdue before I receive it, send the client a statement that shows how much is due, when the invoice was submitted and how many days the payment is late. Then follow up with the client to ask when you can expect to receive payment. Sometimes this is all it takes to get them to go ahead and write you a check. In other cases, this will simply be the first step of a long process to get your payment.
5. When the payment is VERY late, call the client directly and ask why you haven’t received payment. Tell them that you need the payment today and you’d like to stop by to pick it up. If they are an out of town client, tell them that you need the payment to be mailed today so you can get it in your account in a few days. This is the stage when you no longer ask for payment, you tell them that it has to be made now. I’d suggest always being as polite as possible but be firm. They need to understand that it’s NOT OKAY for them to be late on a payment. You’ve done great work for them and they need to pay you for it.
If the client tells you they can’t pay you because they haven’t been paid yet, then tell them that you’d like to call their client personally to ask why they haven’t paid yet. This can be very effective because the producer or agency doesn’t want to look bad in the eyes of their client so they will either go ahead and pay your bill in full or will send you a smaller amount in good faith. They are hoping that this will buy them some time before you do something crazy like calling their client directly to ask for payment.
6. If after all this you are still unable to get payment, it’s possible that your client never plans to pay you. I have a few clients that I did work for several years ago that still owe me a collective amount of $5000. For the first couple of years, I called them every week to ask for payment. Then, naturally, they quit taking my calls and returning my emails. So, I don’t ever expect to see that $5000 but you can bet your tail there isn’t a person in this town that doesn’t know they owe me money.
Of course, if you have trouble getting paid by any of your clients, you should carefully consider whether you want to get involved with them on future projects. We all have trouble paying people from time to time so keep that in mind as well. The difference is that those of us who are ethical will make sure you know every step of the way why they can’t pay you on time and when you can expect payment from them. At the very least, they will feed you a couple hundred dollars a week or month in good faith. This keeps them from having to write a big check until they get paid but it also helps you pay bills along the way. Also, the honest client will tell you up front, before you do the project, that they probably won’t be able to pay you before they get paid. This allows you to go into the job with both eyes wide open so you can decide if you want to do the work or not. You’ll know that it will take a long time to get paid so there won’t be any animosity down the road when they haven’t paid you in the normal payment term.
Most of these tips can be applied to all of your clients, not just the video production companies, independent producers and agencies. Getting paid on-time is vital to your success so make sure you stay on top of receivables every day.