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Standard business terms for post production services

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scott reynoldsStandard business terms for post production services
by on May 16, 2014 at 6:42:07 pm

A humble question for the creative cow audience.

I've just completed my 4th post project for a small production house (my client). The client has paid promptly for the previous three projects - generally within a week of me submitting my invoice. However this time, I followed up after 10 business days, only to be told that they had a net 30 payment policy. I went through my documentation - the contractor agreement and NDA, and nowhere does it say net 30. I'm then told that net 30 is standard in the industry.

I understand that I have no leverage, because I have delivered the master (the last time I do that), but I was after a bit of insight as to what was standard payment terms that you've seen and any advice on how to structure future engagements so this might not happen again - without ticking off the client, because I'd like to keep them around. I understand that everyone can have tight cash flow, but I'm not use to giving a month of free credit, nor given the history of the previous projects, to be told "net30" now.

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Rich RubaschRe: Standard business terms for post production services
by on May 16, 2014 at 8:52:01 pm

I have Net 30 on all my invoices and I am still waiting for payment on several projects that are 90 and 60 days past due. Some agencies only pay on net 60 so if you want their work that's how they roll.

I will sometimes bill 1/2 up front on larger projects so 60 days from project inception I am getting the first payment then usually 60 days after it is delivered I get the rest.

They have never budged from that. If you want to have them as a customer.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage

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Todd TerryRe: Standard business terms for post production services
by on May 16, 2014 at 9:04:22 pm

It varies, but as a general rule we bill net/30.

There are some exceptions... we have one particular ad agency client that we bill due on receipt, because we know they are going to take at least 45-60 days to pay anyway, so we don't want to give them even more time than that.

We have another agency client that we bill due on receipt, because that's what they want. They like to cut checks immediately (usually same day) so that's how we bill them (and we certainly don't complain about it).

And if we get an out-of-town and out-of-the-blue client that we've never heard of before, usually they are billed as payable on receipt.

But as a general rule, there is usually a deposit required before we begin shooting, usually from 25 to 50% (depending on the client), and the balance billed net/30 when the project is complete.


Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.

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Mark SuszkoRe: Standard business terms for post production services
by on May 17, 2014 at 2:28:42 pm

Scott, you either accept the 30, or you don't. If you don't accept it, your next step HAS to be going over the head of the billing department and talking to the boss. And it should be face to face.

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walter biscardiRe: Standard business terms for post production services
by on May 17, 2014 at 6:24:03 pm

Net 30 is standard though we put Net 15 on all our invoices.

Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author, Chef.
HD Post and Production
Biscardi Creative Media

Craft and Career Advice & Training from real Working Creative Professionals

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Bill DavisRe: Standard business terms for post production services
by on May 18, 2014 at 4:59:04 am

My large client invoices are typically net30 since that's almost always what the written agreements specify.

Everyone else gets an ROI invoice (due Receipt Of Invoice) - to start the payment clock running immediately. I do 1/3 billed at the start for longer range projects - a second 3rd on completion of principle photography and the final 3rd on delivery of the master. On smaller quotes, it's half and half. BUT - over the past decade schedules have gotten so crunched that it hardly ever goes that way in real practice. I'll still bill the first payment at the "project GO" date, but I'm usually done with the master before I have time to do any progress billings unless it's a big long deal. So I've devolved into "send a "cover my butt" bill to start things, then figure out whether I need to collect the whole thing at delivery of the master or not.

It's easy with clients you know and trust. Everyone else gets put on "pay before master delivery." with few exceptions.

If I do choose to collect on delivery, I have a nice notice that says "your master is ready for download and will be released within 1 hour of the invoice being settled - along with a link that allows them to use any credit card to settle up, I didn't think at first that would fly, but I've had pretty large clients like govt agencies and big companies pay sizable bills immediately that way. You take the credit card processing hit, but you also get the money NOW.

It's the 21st century after all. I understand the big company accounting complexity and small company cash flow issues, but if the federal government can figure out how to immediately pay via a credit card, I'm not sure I'm all that sympathetic for a new client ad agency or small business owner that can't do the same.

But it's always a judgement call.

Cash flow is , after all, the lifeblood of small business.

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