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That “n/c” item on the invoice
On this forum, what I’m about to confess is probably considered criminal, or at least shameful, but nonetheless, I’m willing to take the heat, for the sake of hearing your response.
Please note, this is not a big deal – just a little something that comes up now and then, and makes me a little uncomfortable every time it does.
Making videos can be a messy affair. I’m sure a lot of you “go the extra mile” even if it is not compensated. Sometimes I will do something to make a video better which was not agreed to by the client in advance. It may be spending more time in pre-production or editing, or using on-hand equipment or software which was not budgeted. It doesn’t “cost” me anything (I hear you, I know it really does), it would take more trouble than it’s worth to get the client to okay it, and I “throw it in” for the sake of improving the video, and creating client goodwill.
My question: is it a good or bad idea to list those items on the invoice, with a smarmy little “n/c” in the dollar column? I’m highly ambivalent about this. I’d like the client to know I’ve gone above and beyond, but I have a feeling that it backfires as often as it creates good feelings. It could make a take-advantage-type client feel empowered to take more advantage; and it could make a nice client uncomfortable.
Going the extra mile is often almost necessary. But does it really create client goodwill, or not?
Benjamin Franklin told a counterintuitive story that may bear on this situation. As a young man who needed all the help he could get, he had a problem: the most powerful man in the Pennsylvania Legislature hated him, because he was outshining the man’s young protege. So did Young Ben do the man a favor? No. Young Ben simply asked the man for a favor (the loan of some hard-to-find books), then thanked him profusely. The enemy turned into his best patron and champion.
What do you do about the n/c line?
Bob C
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12 Replies
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Hmmmm, hard to say.
We do the “above and beyond” thing all the time. Probably for almost every single project… not very often on the shooting side of things, but usually it comes in the form or more edit time than is billed, or meetings or other admin work that isn’t billed.
We don’t make too much of a fuss about it, or put it on invoices as “n/c” or in any other way.
I think most of our clients know we might occasionally work more than is billed, and most of them appreciate it. To put the give-aways as an invoice line item seems to me to be a possible invitation to open a can of worms, of the “well you did it for free for me last time” variety.
T2
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Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com
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I show a project discount on projects where the client flat-rated the project and it was clearly going to take more time and resources than they budgeted for.
Usually says “Project Discount Per Agreement” which simply shows them how much a project like that would actually cost but the bottom line is the agreed upon cost.
My accounting software can do a report that shows how much we have discounted throughout the year so I can track it.
I think clients appreciate knowing how much went into it. And how much beyond the budget we went to deliver the best video possible. I mostly do this for seasoned producers and less for the non-profit type. We already know they don’t have budget so I don’t rub it in. They know we are giving them a deal.
Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
Founder/President/Editor/Designer/Animator
https://www.tiltmedia.com -
Tough one.
In my old company we had a couple of MBA’s doing their final project, and my new business is based on some of their suggestions.
However, one interesting fact that kept on coming up in their interviews with the customers of the firm was how we often over-delivered, and then on a later projects would ask for money to cover those extras that had previously been free (such as overtime and nicer fx, music etc). As much as one needs to over-deliver on jobs, it shows that there are a real danger in “giving” things away for free in the first instance.
I am not sure that the invoice is the place to list all the things that one doesn’t charge for. In many cases, the customer doesn’t stop to read it. And the accounts department won’t care either, as long as it is signed off.
Maybe it would be better to put it on the call sheet/post production brief and an explainer there to the client that you love what you can do on this production, and thereby have gone that extra mile without charging for it.
Obviously, if you already have the kit you loose nothing by making better work for a future show-reel. Although some clients feels they should be able to use existing kit for free.
Case story: We had a specific client who wanted access to our Digital Betacam VTR by a minute cost, rather than the hourly charge. The Digital Betacam only started making real money when we sold the VTR and dry-hired in by a day-rate only…All the Best
Mads@madsvid, London, UK
Check out my other hangouts:
Twitter: @madsvid
https://mads-thinkingoutloud.blogspot.co.uk -
IMO, in every business relationship there’s some cross training that goes on between the client and the vendor. I learn what they expect, they learn what I expect. The N/C invoice item is a training (or sometimes a reminder) device. Some clients don’t need that at all. But if you’ve been getting price sensitivity, or truly don’t feel the party on the other side has any concept of how much is included in what you’re giving them – then the N/C item can help them understand that.
For example, on my Production Estimates, I have a permanent line for Insurance. Unless I’ve actually got some risk with the shoot that I have to cover that’s not already under my insurance, that item is marked N/C with the note “$2million blanket policy included” or similar. My feeling is that for most clients – all it does is signal that I understand the need for and have addressed the insurance issue.
On below the line stuff, it’s a judgement call.
YMMV
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Frankly I’ve had it go both ways. Some people have seen and thanked for the n/c extras. Conversely, on a particularly large project, we had a client complain that even though his invoice was held to the agreed upon budget he whined about “Why couldn’t your estimating be more accurate?”
As a friend of mine first said years ago,”This would be a great business if we could do it without the clients.”
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I think if you do it occasionally to show “added value”, it’s fine. particularly if the session had any tension or disagreements in it. It’s an olive branch.
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Very interesting comments. Thank you all. Glad to find that I’m not the only one who does this.
Bob C
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As to charging less when the thing tuns out to not take as much time as estimated, you could do that, or you could keep it to yourself and tell the client you’re pro-rating that much time off their next gig with you. Or comp any changes the client asks for instead of billing the usual time. Decide for yourself which policy aids client retention more.
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[Mark Suszko] “As to charging less when the thing tuns out to not take as much time as estimated….”
Depends on my mood. We almost always come in under our estimates, which is our goal (it’s just too hard to ask clients for more money when a project goes over budget, so we try to make our estimates generous enough so that doesn’t happen).
It depends on the client. If they are a brand new client and have been a peach, I’ll tend to charge less if the actual work was less than the estimate. If they’ve been a big ol’ pain in the rear, they’re less likely to get that treatment.
The vast majority of our clients are not new, though… most of our work is for the same half-dozen advertising agencies that we’ve worked with for years… so we’re familiar with them all and how their budgets usually pan out. If I come in under an estimate on one job, but remember that their last gig was over (or pushing it), that will help me determine how much of a break to give them… if any.
We just stay flexible on that, or at least try to.
T2
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Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com
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If you don’t itiemize it, you can’t deduct it. I used to N/C lots of stuff, and I deducted it off my income under marketing . Your call.
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