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taking a deposit
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?
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21 Replies
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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. -
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!
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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.
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[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.
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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
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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.
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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.
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[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
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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.
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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.
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