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Get a Deposit Before, or Hope the Check Clears?
By Hawke Taylore
This is a burning question for many audio and visual production artists and professionals. Many times we work with companies who want to see a product before they pay you. In some cases, this is the only way you can do business with them, but from my experience, this is a bad idea. I have one client that I did a two hour interview session eight months ago, I sent them all the tapes (overnight parcel) and they still haven’t paid the bill. I usually don’t do this but, at the time they were a reputable company. Needless to say, they are now on full pay up front before any production is done. Times are getting tough and I believe we need to be steadfast and honest with our clients. Make a decision on how your clients will pay you, and stick to it.
The newest trend I have seen is a number of companies who will call you up and say we agree to pay you “X” dollars for what seems to be a simple production. They send you all the paperwork to make themselves look legit. When it comes time for the check, they give excuses or they surprise you with the 60 day turnover clause. Wait, they got their product good, fast, and cheap. How did they get all three from an industry that states “pick any two”? Because we weren’t watching what was happening. We got so caught up with the recession creeping up on us. We just wanted to show clients we were willing to show new ways of being the best. Oops!
If you want to show that you are a professional tell the client 50% must be paid up front. And the other 50% is paid before the final product is released. At least that way you should get at least half. Some clients might go somewhere else. But those who are looking for a professional will adhere to what should be “obvious professionalism”
Thoughts? Comments? Welcome here!
Hawke Taylore
Taylore Studios
Audio Visual Consortium -
3 Replies
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We use two very simple rules for any new client.
50% deposit up front.
50% payment before the master materials are released.
After two jobs doing this method, and the payments are cleared, we then allow them to simply be billed at the end of each job.
I know we’ve discussed this very same topic multiple times in this forum. There’s some very good information if you go back and do a Search in this forum and also go look at the wealth of articles that are both online and in the Cow magazines. Great article from Ron Lindeboom a few years ago about Grinders that still applies today.
Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
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Unfortunately a lot of this has to do with what your competitors are doing. If every production company used a standardized set of ground rules (which I think is a good idea), these problems would be rare because the bad client would have no one to turn to. I guess that’s called collusion, but it would help. In my market, I know there are tons of rookie fools who don’t even use contracts and use price undercutting to survive, and that threat means the client always has someone else to turn to if you insist on any rules at all. I have been literally watching this happen before my eyes, where clients don’t want to adhere to even the most basic, intuitive and common business rules, even if they were explicitly signed off on in a contract. It’s madness.
Charging a deposit ensures that they have SOMETHING on the line that will keep them from disappearing on you. Insisting that they pay the balance before final delivery ensures they pay up if they want their product. I use both of these methods on every job, but it’s the rookie losers out there that are making it harder to enforce any sane business practices. I have a lot more to say on this topic, but that’s another post entirely…
Brendan Coots
Splitvision Digital
http://www.splitvisiondigital.com -
I wouldn’t expect an architect to build a custom house for me before I put down a deposit, although I would certainly look at other houses that he designed.
Following that logic, I am happy to provide my clients with a video before they put down a deposit. It’s called a sample reel.
😉
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