Creative COW SIGN IN :: SPONSORS :: ADVERTISING :: ABOUT US :: CONTACT US :: FAQ
Creative COW's LinkedIn GroupCreative COW's Facebook PageCreative COW on TwitterCreative COW's Google+ PageCreative COW on YouTube
BUSINESS AND MARKETING:Business and Marketing ForumBusiness and Marketing ArticlesBusiness and Marketing Podcasts

taking a deposit

COW Forums : Business & Marketing

<< PREVIOUS   •   FAQ   •   VIEW ALL   •   PRINT   •   NEXT >>
Share on Facebook
gregtaking a deposit
by on Oct 31, 2007 at 10:21:31 pm

I was contacted by a prospective client...a producer/director from another state to shoot a few interviews on HD/P2. Our policy for a new client is to take enough of a deposit so I can pay my subcontracted crew should the client bail and not pay. Usually that amounts to about a 60% deposit, with the balance due before tapes are released to the client, For this client, they were sending me two P2 cards, and they wanted to only pay a 50% deposit, and pay the balance once they received their P2 cards back from me. I asked for full payment up front, since again I do not release footage without payment for new clients.

I ended up losing the job over this. Was I wrong here? How do you handle out-of-state new clients?



Return to posts index
Reply   Like  

cowcowcowcowcow
Steve WargoRe: taking a deposit
by on Nov 1, 2007 at 12:30:27 am

You should have taken a deposit of 50% and gotten a credit card number for the balance. If you don't take cards, plan on losing other business as well.

On the other hand, never trust anyone for money, unless it's me.

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
Sony EX-1 on the way.


Return to posts index
Reply   Like  

gregRe: taking a deposit
by on Nov 1, 2007 at 1:23:11 pm

Actually Steve, that was the problem. I do take credit cards via PayPal. It works great! She only wanted to pay 50% on a credit card and then pay the remainder when she received the P2 cards. What sounded funny at first was that she said her card was already maxed out for this project, so one has to wonder how, when, or if she would pay us the balance. Mind you we were talking about under $3,000 for the total project.

My point is that once I release the footage (P2 Cards) I have no way of getting paid for the remainder because she now has the footage.

My policy when we're producing and editing is 50% for the shoot and the remainder is due once the video is approved and before it's delivered to the client. If we're just shooting and turning over tapes or P2 cards, we need full payment before we release the footage. I've never been stiffed this way, but once in a while we don't get the gig because of this. It's frustrating!


Return to posts index
Reply   Like  


Craig SeemanRe: taking a deposit
by on Nov 1, 2007 at 6:57:37 pm

I really don't trust "on delivery" for any job, especially for a new, out of state client.

There are some things you can do to reconcile this.
50% deposit.
Post low rez copies to prove job was done. NOT APPROVAL though because she has no right to "disapprove" a shoot IMHO.
She pays the other 50% and you ship.

50% deposit
Send P2 folders burned to discs after shoot.
Upon receipt of 2nd 50% you send her the P2 cards she sent you back (you hold P2 cards as collateral in other words).

I don't see any reason to every hand shoot material over until paid in FULL.

There's a difference between credit card and PayPal though. With credit card you bill it (number already given to you) upon completion.


Return to posts index
Reply   Like  

Mark StuartRe: taking a deposit
by on Jan 20, 2008 at 4:04:48 am

My policy when we're producing and editing is 50% for the shoot and the remainder is due once the video is approved and before it's delivered to the client.

How do you do this? Do you email them a proof? What about long videos, too long for email? ftp server download? Or is there some other way you can get approval before delivery? Great policy, and I want to do this as well.

I also think you didn't lose anything but lots of pain by having this client go elsewhere. I echo some other posts that you "dodged a bullet" and they are probably looking for services out of state because they messed up so bad IN state nobody wants to work for them. Hurts to lose a client but much more to work for free is also very true. I think we all, as video producers, need to continually stick to our guns with our policies and avoid getting burned, which is easy to do if you don't think ahead.



http://www.mediaartsolutions.net


Return to posts index
Reply   Like  

Greg BallRe: taking a deposit
by on Jan 20, 2008 at 4:45:55 am

For short projects I post them on my website and send them a link. For longer programs I Fedex them a DVD with a burned in timecode window. Once they sign off and send payment I deliver the video and copies if they ordered them.

If the client decides not to work this way, then let them go elsewhere. Once they refuse to pay upfront money,or if they hem and haw over paing a deposit they are probably not going to be easy clients to collect from anyway. Good riddance. We stick to our policy...no exceptions. This is not a volunteer business, nor are we in the business of financing their company.



Return to posts index
Reply   Like  


Mark StuartRe: taking a deposit
by on Jan 20, 2008 at 3:00:04 pm

You got that right, Greg! My feelings exactly about preventing clients from stiffing the producer! That is why I'm seeking advice here, and thanks for your most helpful tips.

I, too, would much rather not work with a client who quibbles over price. These are also the types that will complain about everything else, too.

Great idea about a "timecode version" DVD. At the station I work for, we now watermark "not for air" in our DVDs so any unpaid productions cannot be broadcast elsewhere.

thanks again,

Mark

http://www.mediaartsolutions.net


Return to posts index
Reply   Like  

walter biscardiRe: taking a deposit
by on Nov 1, 2007 at 7:03:11 pm

[greg] "I ended up losing the job over this. Was I wrong here? How do you handle out-of-state new clients?"

I think you were perfectly in the right on how you handled this. I have lost jobs over the same type of policy in the past as well, and it has not hurt my business at all.

I also charge at least a 50% deposit for any project that involves a camera crew so they can get paid as soon as the job is completed. Like you, with any new client I will hold the master until payment is received.

I think you handled it by the book here. Once those P2 cards left your hands, there was no incentive for them to pay you.

Walter Biscardi, Jr.
http://www.biscardicreative.com

Stop Staring Start Grading with Apple Color The new Color Training DVD now available!
http://store.creativecow.net/p/66/stop_staring_and_start_grading_with_apple...

Read my blog! http://blogs.creativecow.net/WalterBiscardi


Return to posts index
Reply   Like  

Rick DolishnyRe: taking a deposit
by on Nov 1, 2007 at 7:37:57 pm

I think you need to relax your terms a bit. You can't expect to be paid in full on delivery in this business. The fact that you're going out of state with gigs is exemplary. Congratulations BTW (if you got the gig that is). Hopefully there will be more of it.

If I understand you correctly the job was worth only $3K gross and they offered $1500 upfront. I think that's very reasonable terms. They pay you net 30 days or whatever you state on your invoice.

Sounds like I'm in the minority, but this way I keep cash flow rolling in rather than stressing out clients over what amounts to a short amount of time and small amount of dollars.

- Rick


Return to posts index
Reply   Like  


Craig SeemanRe: taking a deposit
by on Nov 1, 2007 at 7:47:14 pm

I have way too many stories and 20 years of working in post houses that all went under plus a few years of running my small business to use your kind of reasoning.

The some biggest clients I've worked with have been as much as 6 months behind in payments. Enough of the post facilities I worked for had enough dead beat clients to seriously hurt their businesses.

Only for the best repeat regular clients do I invoice and they usually pay within a few days of the invoice.


Return to posts index
Reply   Like  

beenyweeniesRe: taking a deposit
by on Nov 1, 2007 at 9:27:08 pm

I agree with Craig and Walter on this one 100%. In my experience Net 30 basically means "pay whenever you want" to many, many clients large and small.

We do give clients Net 30 fairly often, but only with established, reliable clients. Net 30 is basically credit, and credit is earned. Giving out of state clients the benefit of the doubt, and half of your money, is just asking for disaster eventually.


Return to posts index
Reply   Like  

ArniepixRe: taking a deposit
by on Nov 1, 2007 at 11:48:52 pm

[Rick Dolishny] " You can't expect to be paid in full on delivery in this business."

Bull poopy. This business is full of new operators who will be out of business inside of 12 months.

It's perfectly reasonable to expect payment upon delivery. It's unreasonable to expect someone to shoot something for you & then mail you the work & wait for your approval before they get paid.

There's always some minute thing (his hair wasn't combed! And he wasn't wearing a tie!) that can be picked at random to reject the work. Which you'll use anyway, because it wasn't really a problem with it in the first place (it's a video about lifeguards).

Arnie

Now in post: Peristroika, a film by Slava Tsukerman

http://www.arniepix.com/blog


Return to posts index
Reply   Like  


beenyweeniesRe: taking a deposit
by on Nov 2, 2007 at 2:41:17 pm

I agree with Rick in the sense that many clients, especially large corporations, simply will not agree to pay on delivery because, like all dinosaurs, it takes at least 25 days for the brain's message (cut a check) to get to the hand that actually writes the check. There is not much that you can do in those situations except agree or lose the work. My studio would have made about $100,000 less this year if we refused to accept Net 30 without exception.

But again, it's all about using your discretion. If you have an airtight contract and they are a large, well known business, what are the chances that they will try to rip you off? If, on the other hand, they are some out of state "producer" who's credit cards are already maxed out on their project, all MAJOR warning signs, you should be wary of extending any sort of credit. In this, Greg did the exact right thing in my opinion.


Return to posts index
Reply   Like  

gregRe: taking a deposit
by on Nov 2, 2007 at 6:34:02 pm

Thanks everyone. The funny thing is I left a message for the client that I needed to know by end of the day( 2 days before the shoot), I didn't hear back. So I left her a voicemail message at 4:45PM saying if I didn't hear back by 6:00PM, I would release the crew to other projects. SHE CALLED ME AT 5:59 to say they woud not be using us.
I asked her why, and she said they hired another company. I felt like saying "thanks for stringing us along" butchose the high road and said okay...thanks for calling.

Probably not the type of client I would want anyway.


Return to posts index
Reply   Like  

MindYourVideoBusinessRe: taking a deposit
by on Nov 3, 2007 at 12:53:20 am

The bottom line is that you aren't a bank. You don't make money by loaning people money. But, since extending credit (Net 30) is pretty standard in this or any business, you must act like a bank in how you size up your prospective client. Why do some people get a better interest rate on their loan terms than others? Because they are a better risk. Same goes for video business clients. Some clients you can trust based on past experience which means they'll get better terms. Other clients, especially new ones that you have no history with, shouldn't get the same terms.

My policy for clients that I can drive to in 2 hours or less is 50% down upon execution of the contract and the remaining 50% no later than 30 days after they have signed our Final Project Approval Form. Any new client that is beyond a two hour drive has to pay a 50% deposit to book us and the remaining 50% before they get the tapes. Several "producers" have turned us down based on these terms but more have been perfectly willing to operate this way.

My experience has been that if a client doesn't give you any trouble about your payment terms then they can be trusted the next time around. They may be a pain in the butt to work with but you'll never have to worry about getting paid.

Kristopher G. Simmons

Video Business Coach

http://www.MindYourVideoBusiness.com


Return to posts index
Reply   Like  


Mark SuszkoRe: taking a deposit
by on Nov 5, 2007 at 1:18:23 am

Don't cave on the terms, you very likely dodged a bullet with this out-of-stater. They are probably looking at out of state vendors because they've burned everyone IN their state already. Also crossing state lines makes legal recovery that much tougher and potentially twice as expensive if you have to deal with authorities in both states and the delays as they work out their pecking order for the claim.

As far as Net 30 terms and large corporations... I think pretty much every corporation or large organization has an emergency fund or similar fund by another name they can tap for urgent expenses outside the normal 100-year-long payment cycle. They just never advertise that there is one. For example, if a pipe starts leaking on the floor above their main server room at 9 PM Saturday, they are not going to quibble with the plumber asking for payment upon completion of services. One call is made to some boss and that's all, the in-house accounting boys can thunderdome it at their leisure after the fact. If they need to pay for something for the CEO that's coming in a few hours, again, they pull out the special credit card or checkbook or whatever it is. As long as it wasn't spent for bail money or outcall service, it's going to be approved.

Obviously, the more you're hurting for money, the harder it is to hold firm on your payment terms, but your only strong position is when they need the product you are holding in your hand and they are on a deadline. It always amazes me the impossible things that suddenly become completely possible (and affordable) when the Big Boss gives the peons a deadline.

Once you let that leverage go, they have accountants and lawyers that could hold you off for months and you have nothing. Less than nothing, after your legal expenses. Net 30 is often a game for them where they pretend they didn't even GET the bill for the first 30 days. Typical tricks you'll see are a small typo on the payment paperwork they introduce, that they then discover and claim requires canceling all paperwork in progress and they will insist a brand new invoice then be sent. Which re-sets their payment clock to 30 again. Then they might say invoices are only processed for cutting of checks every 2 weeks and you ALWAYS *just* missed this current window. Then the excuse will be that something has to be counter-signed by Mrs. so-and-so in the Fiscal Obfuscation Office who has just left due to vacation/illness/death in family/elopement/religious retreat/financial guru speaking tour/UFO abduction and probing, etc and will not be back in time for the NEXT 2-week cycle, Etc etc etc. But your stuff is on the top of her in-basket they assure you, and they'll promise to "walk your papers thru in a jiffy" as soon as the UFO/guru/embalmer/whatever drops her back off. It's really kind of amusing, their creativity, that is, unless you like to eat.

I repeat the mantra we have seen mentioned here before:
"I am not your bank!"
Stand firm, you cannot be bought for cheap. Let your rivals enjoy dealing with the Net 30 game instead of you.

If you have aleady become sucked into this Net 30 game, one trick I've heard of is to address and deliver the outstanding invoice and late payment notice/letter directly to the CEO's office. Not that they actually care any more about your bill than the person you've dealt with up till then, but anything coming DOWN the internal ladder from above has the weight of God behind it, moves at express speed, stamped with date and time it was receieved, and the lower level staff HAVE tor treat everything that comes down from the boss's office with kid gloves in case the Boss follows up with a question about it. It tends to evaporate a lot of the B.S. games the lower levels play.





Return to posts index
Reply   Like  

Steve WargoOur policy
by on Nov 5, 2007 at 7:56:28 pm

I have been the "good guy" for many years and have the outstanding invoices to prove it.

Our new policy is the same as driver's ed...

"Go on Green"






Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
Sony EX-1 on the way.


Return to posts index
Reply   Like  

David Roth WeissRe: Our policy
by on Nov 5, 2007 at 11:18:11 pm

[Steve Wargo] ""Go on Green""

I love it. I'm adopting that policy myself from this point forward.

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY™

A forum host of Creative COW's Business & Marketing, and Indie Film & Documentary forums.





Return to posts index
Reply   Like  


Mike CohenRe: Our policy
by on Nov 5, 2007 at 11:39:54 pm

I am in a unique position in that I work for a production company (we bill net 30 - 50% up front or after the shoot - 50% upon completion of project. If shooting only, we bill 100% after shoot, but send the tapes asap whenever possible. We trust our clients to pay.)

However we also use crews around the country, for either last minute jobs or overflow, or situations where it does not make sense to fly my whole staff somewhere. In these cases, we either pay with a credit card up front in full, or get billed 100% net 30 after shoot. In all cases, tapes are shipped overnight after shoot, or handed over if I am present.

If you will sleep better having 60% deposit before a shoot, that's fine. But when you get a call at 7am for a shoot later that day, don't count on any money changing hands in that short timeframe.

Mike


Return to posts index
Reply   Like  

John DavidsonRe: Our policy
by on Nov 6, 2007 at 12:37:03 am

She lost me at "my card's maxed out". Holy red flag, Batman!



Return to posts index
Reply   Like  

Steve WargoRe: Our policy
by on Nov 6, 2007 at 1:37:20 am

Exactly. I was going to mention this in my earlier post but we had to run out the door. If someone has ANY financial problems, run away. If they didn't get up-front money for you, they probably are on the road to disaster. It hurts to pass up good work but not as much as it hurts to work for free.

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
Sony EX-1 on the way.


Return to posts index
Reply   Like  


Rick DolishnyRe: Our policy
by on Nov 14, 2007 at 7:48:22 pm

> Exactly. I was going to mention this in my earlier post but we had to run out the door. If someone has ANY financial problems, run away. If they didn't get up-front money for you, they probably are on the road to disaster. It hurts to pass up good work but not as much as it hurts to work for free.

Agree, agree, agree. With this client especially with money problems, I would have politely declined the gig, but the original question focused on his credit terms.

But look at it the other way. I am often called to produce so the tables are turned. I go into a project knowing my budget so I make the calls. If Cameraman A says, "I'll do it and send you a bill with the tapes" vs. Cameraman B, "I'll do it, you pay me 50% now and 50% plus expenses or I don't hand over the tapes", well, even if CamA is more expensive I gotta think this guy's got it going on, has a decent professional attitude... you see where this is going.

Hey I took a look, I have one client who owes me as of today about $2800 in miscellaneous charges like courier and dubs on a larger project that just won't die. So I'm not immune to what I'll stereotype as deadbeats, but the whole "payment 100% in full in advance" just doesn't fly for me.

Now having said that, some of you who know me from other forums know I'm involved in a wedding video business here in Canada. Terms there: 100% paid WAAAAY up front.

I don't believe this conversation is in that league.

- Rick


Return to posts index
Reply   Like  

<< PREVIOUS   •   VIEW ALL   •   PRINT   •   NEXT >>
Share on Facebook


FORUMSTUTORIALSFEATURESVIDEOSPODCASTSEVENTSSERVICESNEWSLETTERNEWSBLOGS

Creative COW LinkedIn Group Creative COW Facebook Page Creative COW on Twitter
© 2014 CreativeCOW.net All rights are reserved. - Privacy Policy

[Top]