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billing for changes and revisions

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clyde v
billing for changes and revisions
on Nov 21, 2007 at 3:15:53 am

How do you guys charge for revisions/ changes? Do you categorize changes as "minor" and "major," giving out the minor for free and charge them for major changes? How do you qualify revisions/ changes as major? What is the industry convention?

I have a client here who thinks his revisions are minor. Of course, he hasn't got a clue on how it's done, which I think is major since I have to go back to After Effects and rearrange the layers and redo the masks, then get it back to my timeline in Premiere. Do you think that's major? Another client wants changes that will lengthen three scenes in the timeline (in Premiere) which necessitates moving all the succeeding clips so that the lenghtened scenes will fit. And of course, I will lengthen the background music in another program as well so it will be of the same length as the lenthened timeline. And oh, I would also move the succeeding voice-overs so they will match moved clips. Do you qualify that as major? Thanks guys.

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Todd at Fantastic Plastic
Re: billing for changes and revisions
on Nov 21, 2007 at 4:43:09 am

Sounds to me like scenario #1 is medium-major... not a two-click fix, but not recutting Gone with the Wind, either.

Scenario #2, could be relatively minor, to slightly more.

Hopefully you didn't give the client a "flat rate" for the entire project. If you did, he might have you over the proverbial barrel and you will more or less be stuck with making the fix gratis.

Part of what you should take into consideration is whether they are an established long-term client of yours, who has paid you lots of money through the years and hopefully will continue to do so? (i.e., go the extra mile to keep them happy).... or are they a one-timer with a tiny job that was barely worth the trouble in the first place?

It's always better to work by the hour... and a job takes however long it takes, "fixes" or changes billed like any other hour of work, because after all that's what it is. Work.

We try to never give clients absolute set-in-stone fixed prices for projects, because you never know what will happen (and I think you will hear most everyone else here give this same advice, too). Rather, I try to give them a good honest estimate of how long I think a project will take... and we carefully spell out in their contracts what that will include: i.e., up to 10 hours of preproduction time, or up to 8 hours of shoot time, or editing or graphics production or art direction... or however else you normally divide up billing. The contracts spell out that any work performed above those stipulations will be billed at our normal rates.

Incidentally, your contract should also spell out payment terms (i.e., 25% of estimate due on booking, balance billed at net 30 upon completion, or whatever). It's also a good idea to add verbage stating that "Overdue balances are subject to finance charges up to the maximum allowable amount under state law." In many states, if you do NOT include that provision in ADVANCE in a contract you cannot recover any finance fees if a client suddenly decides that you should be his bank for a few months.

Back to "fixes"... for good well-established clients of ours doing big projects... we will generally throw in a hour or so's worth of production gratis for fixes or minor changes. It's not worth rocking the boat to keep their business, especially if they are old-timers with us and the "fix" cost is a tiny percentage of the whole project.


Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.

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Tim Kolb
Re: billing for changes and revisions
on Nov 21, 2007 at 2:32:44 pm

I think the question really isn't whether the changes are "major" or "minor." The issue is whether or not the specifications regarding how the product would be conducted were communicated in the first place.

Lately I've seen an unbelievable number of issues in this area. A project for what may be a video/film production-inexperienced client starts with an estimate. Unfortunately indecision and/or poor logistic planning and lack of understanding of the process on the client's part starts to sabotage the project. Production vendor has problems laying out the issues to educate the client so they absorb the issues until they become so ridiculous that the situation goes completely adversarial and everybody loses...

Honestly, most production vendors would have far less problems in this area of revisions and changes if they worked harder on better client communication when things start out...

Now, that said, I'm not implying that clyde is in this situation exactly, but it certainly does sound like clyde is used to billing hourly. The main problem with these situations comes in when production vendors who are used to working on hourly billing end up selling a "project" instead of "hours".

Determining a price in these cases goes beyond estimating entails structuring and planning the project and understanding what the project needs to accomplish (train, promote, sell, target audience, etc.), determining logistics, defining the schedules and hours necessary to complete the necessary interviews, b-roll shoots, graphics, etc, and determining a project price that would cover everything necessary to complete the project plus something to cover any unforeseen costs. Then the critical thing...knowing exactly where the boundaries are during the project's execution so that any adds that will affect budget are immediately identified so the client can make a decision to accept the fee or drop the change request.

After all that, my question to Clyde is: What was the client told when they were given the draft of the edit that they requested the changes on? were they told:

1. "Here, see what you think and let me know."

2. "This is a first draft of the edit, take a look at it and let's talk about it."

3. "Here is the edit, remember that we have one revision pass in the budget so be sure you catch all the changes as another set of revisions will require a billing."

4. "Here is the edit, remember that ANY changes that require me to change layer orders in After Effects will cost extra." (In which case the client better have had the option to approve those AE sequences previously or even know what they are, or they're forced to accept something sight unseen...which would be bad client etiquette on Clyde's part if it were the case.)

5. "Here is the edit. Minor changes I can do for free, major changes I can do for an extra fee." (...we hear the 'thump' of the 300 page publication describing what a "major change" is in technical terms...switching layer orders in AE` and re-rendering is explained on pages 234-238.)

6. "Here is the edit. You'll note that you've already approved sections X, Y and Z, those areas can be altered for an additional fee as we discussed when i undertook the project, but at this point, we really need to focus on sections P,Q and R because those are`areas you haven't seen yet..."


Obviously, my point is this: It matters far less whether any change is a "major" or "minor" one for you...

What matters is how was the client prepared for the production/evaluation/approval process and how was it planned out and communicated to the client? If it was simply left wide open and now you plan on hitting a client (who is simply evaluating the product that they're paying for and making sure it fits their needs) with an additional fee if they are asking for changes to visual segments they've not seen before, you better be running on a strict "pay-as-you-go" basis with this client.

Director, Consultant
Kolb Productions,

Creative Cow Host,

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Re: billing for changes and revisions
on Nov 21, 2007 at 7:02:17 pm

I would suggest that you stay away from subjective terms like minor and major. It doesn't really matter if you're charging by the hour.

I always had a section in my agreements dealing with changes and submitted a change order form to the client for approval before I did any changes.

The only items contained in the change order are a description of the changes the client wants, the estimated time it will require to effect the changes, and the hourly rate that will be charged.

Once the client signs, dates and returns the change order, it's time to go to work on it.

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Raymond Motion Pictures
Re: billing for changes and revisions
on Nov 21, 2007 at 8:34:12 pm

A lot of these 'change' problems stem from not getting a good read on the client and the message. A good account exec will nail both from the get-go - and then be able to communicate that to the creative dept.

I've seen guys get off on a tangent that neither the client wanted nor made a good market fit. Why? They didn't ask enough questions nor guide the client into the right direction at the beginning. Never coddle a client when he's wrong - he's not paying to be coddled, he's paying for results.

Do your research and then stand by the direction you take on his behalf. If he changes direction in mid-stream, then bill him. "Let's target teen-agers rather than the retired." Fine. Are you going to pay me for BOTH?

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Mark Suszko
Re: billing for changes and revisions
on Nov 22, 2007 at 9:15:54 pm

I like everything about Tim's answer to this.

I have to say the first thing I did when reading Clyde's question was smile broadly as I recalled what the definitions used to be for "major" and "minor" back when everything was edited linearly. You younger guys don't know how much easier you have it using NLE systems.

Still, time is time, whether it's an easy fix or something complicated. I have some idea of how complicated AfterEffects work can get and the need to re-render things adds more time. But frankly, "major" and "minor" are abstracts to the client who doesn't have to execute them. They don't wanna know how hard it is to build the watch, they just want to know what time it is. Client's don't think major-minor, they think "acceptable- not acceptable". Just as with any other service. Do you really give a hoot how hard the laundry worked to get that stain out of your shirt, or do you just care if it is clean or dirty?

Now my 9-5 situation is not necessarily like most of yours; my clients all are on a revolving fund type system, it's mostly "monopoly money" we're talking about as a way to keep score, except for billing for expendables or things outside the norm. So when I want to tell a client this proposed change is too big for what they initially "paid for", what it equates to in our case is not billing cash, it is the currency of time, of access. If the new changes are going to take me too long to execute, and I have other clients in the pipeline (always do) and drive space I have to free up, the threat to the client is not that we'll bill them more, (except indirectly by me charging for overtime) but that the project goes on an archival shelf unfinished until we can get back around to reloading it and helping them, since the other waiting clients can't be re-scheduled. Nor should they.

The delay could be anything from 48 hours to a month, depending on just how busy we are. If the client wants to meet a deadline their boss set, they better have their act together going into the project, and I am there to help them in every step of that. I advise in advance how to set up each stage of the job so they know what is being done and what their responsibilities are in bringing me elements or whatever. If they suddenly get a wild hair during the final conforming of the dubbing master to make significant changes for a weird reason, it's the clock and calendar that decide if I agree, more than enything else. They get a window of access, and they have to work within that window or go to the back of the line behind the other folks who have their ducks in a row.

After having situations like this happen to me in the old days, I have always told clients what to expect for their "money" up front. I tell them that when I present them the first rough cut, that is an approval stage where anything that's wrong or needs a change is covered, no extra charges. I will go back and fix everything on their written list, even make re-orderings of pre-made segments. NLE's make this job cake compared to the bad old days. After the next screening, the only changes are going to be me fixing something I messed up like a word spelled wrong in a CG title. I don't bill overtime for fixing such mistakes if I was the one that made them. Likewise if I made a bad estimate on something I proposed, I eat the overage. If they gave the information for a lower third to me on paper and it was their mistake that I faithfully copied into the program, that's on them, and I bill.

Back to Tim's answer, if the changes are truly huge revampings of the program, rather than just issues of adjusting the timing of what's there or swapping the order of sub-segments or tweaking music beds or the audio balance, it points to a massive communication and expectations problem before the project started. This is why I am such huge advocate for the creative treatment process as the guiding document for a project. With it, you can point out that what you did at every stage was what was asked for and agreed to, and that at this point any really stupendous change is outside the scope of the original agrement and subject to a new billing arrngement.

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clyde v
Re: billing for changes and revisions
on Nov 24, 2007 at 1:36:10 am

Those changes are new and are not in our original agreement. But I hate to say no because some of them are big companies. They don't pay well (because a lot of other video productions are willing to take my place) but they make my portfolio of clients look impressive. However, this is still business so they have to pay for my services. Now my question is, do I have to insist on getting paid for the extra work and risk losing the next projects for these clients? They have more projects for me waiting in the pipeline. Or at least do you suggest that I give them 3 free hours (of edit)and just charge a minimal fee after that?

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Nick Griffin
Re: billing for changes and revisions
on Nov 24, 2007 at 1:53:33 pm

Clyde, buddy, let me throw a few thoughts into this mix regarding this last posting.

I certainly agree with Tim and Mark on this, and most things, but something you just wrote has me bothered.

You wrote: "They don't pay well (because a lot of other video productions are willing to take my place)..." and "...they have more projects for me waiting in the pipeline."

Hmm. They don't pay well AND they've let you know that there's lots more work that doesn't pay well. Does this sound like a winning combination? And if you've already done some work for them don't you already have them for your demo reel and client list?

Did the information that they'll walk if you don't play ball come from them, or is it just your assumption? If it's your assumption you should spend some time delving here through the archives of the Biz COW. And, as Tim said, you need better communication with your client. A little bit of salesmanship wouldn't hurt either. If it's not just your assumption and something they've actually said then you're dealing with a grinder, a bully or a combination of the two.

It's been a while since I've written out one of my little sales scenarios and, since I'm not a WGA member, here goes:

Client: "I'm going to need you to (pick one) _cut this rate in half, _throw in the editing time for free, _allow me to continually change my mind without consequence -- OR we're going to have to look at other companies for this service."

You:"That might make sense," (you state in a non-conforntational, matter of fact manner.) "That might be a way to shave a few dollars off the project, assuming of course nothing but the price matters to you,"

Client: "Of course other things beside price matter. We're MagaCorp, our image and the quality of our message are essential to us."

You: "Gee. If you're sure you can easily get that from one of the discount video producers you'd be crazy not to take that deal." (You are NOT arguing with them, you're agreeing with their line of flawed logic. You are NOT trying to be smarter or cooler or anything but supportive. Bury your ego and play this role.)

Client: "Not everyone who gives me a break on price is what you call a discount video producer."

You: "Maybe not. But if they've got that kind of extra time on their hands or flexibility of scheduling, don't you have to ask yourself WHY?" (You just planted a very important idea.) "Look I'd love to work on this project with you and I know that with your ideas (a compliment) and our capabilities it could be great." (Getting back to the factor which is most important to him.) "But given the fact that with our current workload, (pick one) _cutting this rate in half, _throwing in the editing time for free, _allowing you to continually change your mind without consequence -- is not something we can do, how do you think we should handle this now? Is there a way for us to go forward on this or have we just reached an impasse?"

So what's just happened here? We got the prospect to:

1) Say in his own words that price is not the most important thing.

2) Wonder about the quality and qualifications of those who are willing to drop their price.

3) See you as someone who shares his top priority -- that of creating a product which will make him look good.

4) Recognize that cutting your price is NOT one of his options.

5) Put the burden on him to determine where to go from here. So you have left him feeling completely in control of the process, and therefore good about himself.

Is this approach going to work every time? Certainly not. But it will work more often than you think and you won't be left to (pick one) _cut this rate in half, _throw in the editing time for free, _allow him to continually change his mind without consequence.

Speaking to you from the wings of the Sales Theatre, I'm Nick Griffin. (Any wonder I'm not a WGA member?.)

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clyde v
Re: billing for changes and revisions
on Nov 24, 2007 at 11:21:10 pm

Thanks guys!

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