The Invoice

[Nick Griffin]

[Steve Wargo] “However, be advised that the IRS has special rules for the production industry.”

Okay, Steve. We’re all on the edge of our seats. WHAT are the “special rules?” Details, dude. We want details.

Through no particular plan in recent years our business evolved to the point where none of our clients are in our state. We were told we could therefore stop filing the monthly sales and use tax reports.

Now there’s the possibility that we may be again working for an in-state company and I’m intrigued by Todd’s idea of claiming ownership of all physical product and only transferring the rights to the data. On this particular client it could work out well as they’ve already stated that they want to duplicate DVDs for themselves.

And just to chime in on the invoicing thing. I go one of two ways depending on the client and their overall operating procedures. We either give complete and excruciating detail (Log and Digitize Scenes — 4.75 hrs) -OR- we “black box” everything into broad categories (2 days Field Production and all related expenses).

[Michael Hancock]

[Todd Terry] “Even our dubs have a tiny fine print line on the label that says “This videotape remains property of Fantastic Plastic and must be returned upon request,” just to make it clear we were not selling the videotape (and invoices list it as dubbing service rather than just “dubs”).”

Very, very smart. In some (maybe all?) states the dub is a tangible and if you haven’t been charging, and are lacking Todd’s fine print, the IRS can destroy you with back taxes. It happened to an ad agency in our town that was pulled for an audit and owed thousands because they never charged for dubs but didn’t retain ownership either. If they had simply made a note on the dubs that they retained property and not the client they would have been fine.

We’ve always “owned” beta dubs, but since that agency got whacked we don’t even list them on our invoices anymore. Instead it’s added directly into the edit time, and when we do send dubs (it’s mostly digital delivery now) we make a note to the stations that we own them. And we occassionally get boxes of Betas from the TV stations because of it.

As for how we do invoices–when we quote a job we break it down into rough hours – X hours to shoot, Y to edit, plus “free” DVD at the end and spot delivery (dubs). When we bill we just send them a total number. It always matches the quote (or comes under if we grossly overestimated the hours), so we don’t break it down twice.

Michael

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I’ll be working late.

[John Nelson]

Great advice. Thanks very much.

We’re from the Government. We’re here to help.

[Steve Wargo]

just for you, Nick.
https://www.mca-i.org/en/art/9/‘>

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
2-Sony EX-1 HD .

[Grinner Hester]

Anytime I note my hours but have a price that is lower, I just add a subtolal of what it should have been then notate that I’m a cool dude, show the price subtraction and the new total.
The only reason to round down is to be a cool dude for em. May as well spell it out.

[Dino Vince]

Sorry, but I guess I’ll be the first to bring it up….WHAT? YOU’RE ONLY CHARGING $50. AN HOUR TO WRITE, SHOOT AND EDIT?

One of the most difficult issues I face running my own production company is being undercut by startups who don’t know the value of production services, or a client’s Uncle Joe with a Camera who works dirt cheap. Fortunately, these are usually one shot deals, as the addage ‘You get what you pay for’, rears up and bites the client in the ‘you know where’.

My advice, in addition to restructuring your invoice to look more professional, is to do some research on average production costs in your area, and try to price accordingly. If you do good work, then you should bill for it.

Thanks and good luck!

[John Nelson]

Thanks for the input. My market size is very small, 45,000, with businesses not used to paying much over $200 for a finished commercial, plus dubs. There are 2 satellite stations and 1 cable outlet who charge anywhere from, free to $150 for the same service. The cable guy wanted me to chop my $350 rate for a local hospital ad by $100. or “I’ll find someone else to do it!”. I emailed him back to start looking… Been doing ads for 30 years and am getting tired of those kinds of comments. Been doing other, long form videos lately for individuals and businesses which I enjoy more. While I ‘ain’t gonna get rich’ here in tinytown, I also am not going to be a victim of road rage or some crazed shooter. Life’s too short, especially for me being on the downside of 60. You young bucks can go for all the riches, fame and glory. I’ll be thinking of you while I’m floating on my raft with an adult beverage.

Thanks again and, If you’re ever out my way, give a hollar.

Juan

We’re from the Government. We’re here to help.

[Mike Cohen]

Are you saying you charge by the hour for on-location production? This is wrong and diminishes the value of your services. It is traditional to charge a half or full day rate for a shoot, even if the shoot is an hour. It in fact diminishes the value of the whole industry.

Having read the other posts and your follow-up John, I see you are dealing with the cable market, which is generally cheap or free. The cable advertising place where I interned gave a free commercial to new customers who bought time. This is why many local ads are horrible, because the time is the commodity, the ad is salad dressing.

Mike

[John Nelson]

Thanks Mike.
Your suggestions are well-founded and appreciated. Unfortunately, in a town of this size, charging half or full days for location shooting would not go over very well. The market has been slow for some time, with respect to commercial production. I doubt it will ever be a viable revenue source for producers.

Thanks again,
John

We’re from the Government. We’re here to help.

[Andrew Fraser]

A friend of mine offered a Music Video special to ten new clients at the end of 2008 to generate some cash flow. A rock-bottom no-frills, one-day, one-location music video shoot for $1,000 (all-in). Editing and equipment included.
(Go to https://www.undergroundplanet.com to see his amazing work!)

Anyway, as he was showing me his videos and bragging that several of his new clients want more videos, I asked how he invoiced the band/manager for the video. He said he invoiced them for $1,000. I shook my head and suggested that he should have written an invoice for the full rate: shooting day; equipment rental; X hours of editing; delivery media; etc. and then subtracted the net difference to get the invoice to $1,000. Ideally with the words “once-in-a-lifetime discount”. His face drooped as he agreed.

Many folks in creative businesses (not just video production) have a hard time communicating the value of their work to their clients.

Not so with Creative Cow-hands like yourselves, of course. I often refer my colleagues to articles, discussions, and forums on this board for business advice.

Andrew Fraser
Freelance Producer/PM
Freelance Editor