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Why do the larger corporate clients take so long to pay?
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[denise quesnel] “…balance out major clients with smaller ones.”
Great advice, Denise. Balance, meaning some on one side and some on the other to give balance.
We work with everyone from very small companies to very large international conglomerates. Yes, some of the biggest ones are the slowest paying but they do eventually pay and often they have budgets that the smaller companies simply cannot match.
While I would never want to be back in the situation that Bob Zelin alluded to wherein all your business is with one major company — a recipe for disaster — a balanced portfolio of clients is a great way to enjoy a solid cashflow of both smaller and major clients.
Best regards,
Ron Lindeboom
Creativity is a type of learning process where the teacher and pupil are located in the same individual.
Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
– Antoine de Saint Exupéry -
People, and companies, have as much control as we give them.
Rethink your payment plan/system. Never think, well, my hands are tied. The more importance and focus you put on your payment system the more you will convey that to the companies.
This is your payment plan, not theirs. Run it your way. Get paid most or all upfront, switch to 7 day invoice, think outside the standard way of doing things. You’ll get peers saying “umm..sorry..that’s not the way the industry works…”, what they are really saying is “hey..the industry controls me…I don’t control the industry…”. But don’t be afraid to take a chance on change, you may be surprised with the results.
And remember, every time you point the finger at a “bad” company, there are often three fingers pointing back at you 😉
Frank
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Franklin McMahon / Host
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frank@fmstudio.com
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Sometimes it is really policy at the company to drag feet at every stage of a payment chain. Sometimes it is because humans are the chain. How it might work:
You deal with Alice the producer. Alice needs to submit paperwork to her supervisor Bob. Alice is very busy producing three projects at once plus being a working mom and wife, with all that’s going on, she’s about 4 days late submitting the form to Bob.
Bob lets it sit on his desk while he puts out some other fires around the office that are more pressing. In a couple of days Bob gets back to the bill, looks it over and signs off and sends to his supervisor, Charles.
Charles is out of the office on a vacation, 5-day golf weekend/training seminar, or whatever.
When Charles gets back in, Bob’s signed-off memo is on the bottom of a stack of stuff from Charles’ bosses. It takes another two days for Charles to get to Bob’s memo and forward it to Accounting.
Accounting has two people in the office, Doreen and Danny, but one of them is out sick. Naturally, your bill goes to that one, Danny. Danny is out 6 days. Doreen *could* handle it if it was classified an emergency, but it is not. So it waits until Danny gets better.
A phone call from you comes in asking about the status of the payment. Alice calls Danny’s desk but gets voice mail. She goes the extra mile and walks over to Accounting and asks Doreen what she knows about it. Doreen is a little bitter that she has to cover for Danny as well as for her regular work. But she digs out the form from Danny’s desk, and sees that it has been sitting unpaid long enough that the calendar has turned into another fiscal month. What that means is, there were funds appropriated for that job last month, but because Danny didn’t tap them in time, that fund is now closed and the process has to loop back to Bob.
Bob gets the paperwork back three days later because the mailroom clerk took a personal day for a family emergency. When he gets back, it takes another day to catch up to the piled up deliveries.
Bob re-submits the form to Charles for re-approval.
Charles gets it the next day but is confused: didn’t he authorize this once already? He’s not going to sign something until he’s sure. He leaves it to his secretary to figure out because now he’s off to a branch sales meeting in Omaha.
The secretary knows nothing about this, and it takes her a full day of talking to Bob, to Alice, to Doreen, to Tinker, to Evers, to Chance, molasses to rum to slaves…. and figures it all out around 4:30. On a Friday.
Monday the secretary sends the form out thru inter-office mail with an approval. Mondays always take the mailroom clerk longer, it gets to Accounting after lunch. Nobody opens it because they are at an extended lunch to celebrate Danny’s return.
It goes to Danny, who is now back from sick leave. Danny has a huge pile of stuff to catch up on and works on the first-in-first-out basis, so the re-approved form the secretary signed for Charles is considered brand new, not over a month old. It goes to the bottom of his stack. Danny goes about his catch-up work, casting sullen glances at Doreen every now and then for not covering his job a little more. He watered her plants while she was on vacation, you’d think she’d reciprocate a little bit…
Danny gets to the form/bill late in the afternoon the next day. He is about to pay it, but there’s a teeny discrepancy on the form with a transposed account number. Normally, he’d let it go, but he remembers the last time he got dinged by his supervisor for “sloppy work” and not being strict enough for procedure. So he walks the form back to Bob to fix and resubmit.
Bob is out supervising a field production with Alice today.
Bob sees the form the next day, yells at Alice for not filling in the blanks right the first time. Now Bob has to walk this back up to Charles, and it’s going to look like Bob is sloppy. Bob is in the middle of lobbying Charles for a higher budget for his division, and this distraction is only going to weaken his position. Bob decides strategically it is better to sit on the form until the budget matter is settled.
Charles finally agrees to some of Bob’s budget suggestions, noting there seems to be a slight surplus in the budget for some reason that should just about cover the new request. Must remember to ask Accounting about that…
Bob now waits a day longer for the glue to set on his new budget approval, then walks the form over to Charles for re-signature. Charles has his mind on other things, signs it without looking. Whew, dodged a bullet there, Bob. Next stop: Danny!
Danny takes the new form, scans it, nods, and fifteen little keystrokes later, the check is cut. Well, as far as the computer is concerned, it is. But the printer is out of blank check forms. Danny thought Doreen would have re-ordered in his absence. That witch. Just because they had coffee together once and he didn’t want to continue it… Doreen says Danny has the seniority, and due to internal controls only he can handle that chore. But the good news is there’s extra blanks in Charles’ office, locked up.
No, you guessed wrong. Charles IS in his office. After a little speech to Danny and Doreen about teamwork and pulling together, he unlocks the safe and gets out the spare check blanks. We’re back in business.
The computer is mad though; says it was already told to print this check once, it is not supposed to print a duplicate. Call Edward in IT to come fix this. Edward is offsite fixing something at the other branch across town. But if somebody okays the overtime, he’ll rush back and fix it today. Otherwise it has to wait for Monday. Charles’ memo last month about reducing overtime is still on the bulletin board so…
Sunday, Edward gets really hammered while having an all-day LAN party. He calls in sick Monday. But tells Freddie his assistant to go fix the printer in Accounting. Freddie has never worked with this system or printer before, it takes him all morning, but with help from Doreen, he gets it working. Freddie notices Doreen has the cutest smile he’s seen in a long time, wonders if she’s seeing somebody, maybe he can ask her out for coffee….
The check emerges from the printer, huzzah, amen. Off it goes to the mailroom.
The Mailroom super looks at his postage meter settings and notes they are running a little low on money, to stretch the budget till Friday, he orders the stuff to go second-class until then. But it is out the door, and into the hands of the United States Postal Service.
Six days later, Bob’s plans are thwarted when the purchase order for a new piece of equipment is stopped because of an overdraft in his department’s accounting line. Someone is going to get yelled at, when Charles gets back…
Charles sends a group email that he is leaving the company for another job, and the interim boss is Candace, who’s first order is to freeze all projects currently underway until she can review them.
Fred and Doreen have gone on a second date, Doreen has a new haircut and Fred has re-configured his Myspace into a shrine to Doreen. Danny secretly keys the paint on Fred’s car.
Oh, and you got paid today.
Tune in next week for another stirring story from “Tales of the Accounts Payable!”
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Damn, Mark! I used to like you. Gotta wonder how our relationship will be affected by the fact that you’ve now revealed that we’re both working for the same client.
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Mark – you are on a roll! Nice work.
I can see a Dilbert-style comic interpretation of this. Let me get to work on that.
Mike Cohen
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[Michael Folorunsho] “Should I be demanding a more accurate time frame or exact date? Or should I just chill out and except that big companies drag their feet when it come to paying their videographers? “
This is what my contract states in part:
“All materials including, but not limited to, raw materials and Masters will not be released by Biscardi Creative Media until final payment is received.”
I hold by that statement. If it’s a product that’s being delivered via web, I have a big watermark right down the middle of the video.
You’d be surprised how quickly the accounting / billing department of any company will be able to cut a check if they are not going to have that video presentation ready for the date. I’ve also had a few clients who didn’t get their product on time because I didn’t get the check.
It’s in the contract when the client signs it so I hold by it.
Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author.
Credits include multiple Emmy, Telly, Aurora and Peabody Awards.
Biscardi Creative MediaCreative Cow Forum Host:
Apple Final Cut Pro, Apple Motion, Apple Color, AJA Kona, Business & Marketing, Maxx Digital.
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