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akaracquel
09-07-2011, 05:56 AM
How do you encourage clients to pay for your services in a timely manner?
What strategies do you use to make sure the amount owing doesn't go overboard and out of control?

akademus
09-07-2011, 06:08 AM
This is how I did it.

10-25% upfront, depending on whom you're dealing with. Clients not willing to pay at all have a hard time with this one.
50% after animating is done before final rendering. Its a fair deal. Client has seen still renders, approved animation-mood-lighting, so you're good to render.
Remaining upon delivery. Clients who has payed over 50% of job value so far are most likely to pay the whole job and work some more if they are happy. Even if they don't, you loose some 25% of the job price which again is way better than working for nothing.

Absolutely no "if we do this for free, there will be much more jobs later". Later never comes and bills have to be payed now.

Hope this helps.

50one
09-07-2011, 07:14 AM
Absolutely no "if we do this for free, there will be much more jobs later". Later never comes and bills have to be payed now

Been myself a victim of this twice - even tho it was something quite simple, avoid that move at all cost!

jameswillmott
09-07-2011, 07:16 AM
How do you encourage clients to pay for your services in a timely manner?
What strategies do you use to make sure the amount owing doesn't go overboard and out of control?

I demand 25%-33% up front, the remainder payable before delivery of the final material takes place.

I also make clients sign a contract saying there will be interest charges on overdue accounts and the client will pay for my recovery costs.

I am draconian now with contracts, I never used to be, thinking naively that if I was 'nice' then my clients would be 'nice' too, and I didn't force them into anything.

It doesn't work. :)

Be hard. You may lose a job or two, but those clients were probably the ones you didn't want to deal with anyway.

Any serious client will think nothing of paying a deposit or signing fair terms and conditions ( provided their rights are protected too ), and a solid stand from day one will maintain the client's respect for you.

And as Akademus said, never work for free, for the promise of paid work in the future.

Portnoy
09-07-2011, 08:00 AM
Quote from James:

I demand 25%-33% up front, the remainder payable before delivery of the final material takes place.

I also make clients sign a contract saying there will be interest charges on overdue accounts and the client will pay for my recovery costs.

I am draconian now with contracts, I never used to be, thinking naively that if I was 'nice' then my clients would be 'nice' too, and I didn't force them into anything.

It doesn't work.

Be hard. You may lose a job or two, but those clients were probably the ones you didn't want to deal with anyway.

Any serious client will think nothing of paying a deposit or signing fair terms and conditions ( provided their rights are protected too ), and a solid stand from day one will maintain the client's respect for you.

And as Akademus said, never work for free, for the promise of paid work in the future.

Would you happen to have a template of your contract or know where a template can be gotten from that good for this.

EmperorPete
09-07-2011, 08:20 AM
My Dad lost his business due to companies not paying him in a timely manner. Therefore I make darn sure that my clients know that they will be required to make an up-front payment, and that any progress images sent to them will be watermarked (I had one client try to pass of WIP images as finished and get out of paying, so I take precautions against that now).
I also make sure they understand that after a certain level of progress any major changes will incur additional charges. A case in point is a major electrical company I did a logo animation job for a few years back; they changed their product line's logo after I'd nearly completed the work, and expected everything to be redone for free.

OnlineRender
09-07-2011, 08:48 AM
I had a great client a few weeks ago , superb paid bang on schedule ... of course everything was water marked and I done it in 3 payment stages Deposit Animatic Final ....ect

Sorry just so people know not everyone is bad out there ...........

Lightwolf
09-07-2011, 08:59 AM
I am draconian now with contracts, I never used to be, thinking naively that if I was 'nice' then my clients would be 'nice' too, and I didn't force them into anything.

It doesn't work. :)
Oy, we were nice ;)

I generally agree though: 40% up front, 30% after the layout is approved, 30% at final delivery.
If you know the customer well enough you can probably relax it a little (or just do the odd favour if asked).

Having said that, with the exception of one client I've been happy enough in the past 15 years or so. It does help that basic payment terms are defined by law here (as well as the initial debt collecting process). There's rarely a need for proper contracts.

Cheers,
Mike

Boris Goreta
09-07-2011, 09:04 AM
I'm dealing with two debts now which are two years old. In my country if a debt gets older than 3 years you can forget about it, you can't sue any more. After playing nicely for two years I first tried the brute force method. I've been calling the guy literally 50 times a day with no answer. He would call me back after 5 days telling me that his phone was at the service and that he will pay me next week. Needless to say that he didn't pay, even after several such bomb attacks. So I decided to get a lawyer. Now, people thinking that this will ruin any future business relation with such clients think again. Such clients won't hire you for fresh work since they know they ow you so they go to another guy, make new debt there, then to a third gut and so on. My lawyer sent him a warning telling them that the court will take control of their account and clear my debts. He was on the phone immediately asking me to pull back the warning and that he will pay me next week for sure. We'll see. Anyway, if he doesn't pay the court will pull the money for sure. Don't be afraid of getting legal support. Contracts make things much easier because you can avoid expensive court sessions in some situations.

UPDATE: Just called him to ask if he got the legal agreement through email to sign it, thus avoiding the court hassle. "Hmmm, when did you send it ? Really ? I didn't get it. It could be it went to junk mail or something"

Yeah, right.

Andyjaggy
09-07-2011, 09:14 AM
I've been fortunate to always get paid, but that doesn't mean it doesn't take forever sometimes.

It's very frustrating when they demand they need the job finished in 2 days, but they then take 2 months to pay me.

JamesCurtis
09-07-2011, 12:17 PM
I just had an instance where I've been working on a project for some time for a Marketing Agency as a contract freelancer and was between phases of the project. During the Summer, I came to find out that the Marketing Agency's client had closed the whole department down which I was doing work for [due to no budget left for the year].

But now, the remaining phase of the project may never see a finish due to this. Finishing the projects would have cost about another grand or so. [after $6500 was spent on it already].

Thankfully, I was paid up fully to that point.

Worst part of this is I'm having to find another way to make up the loss of that project's money now.

On a good note, I do have some other work coming up for the same Marketing Agency on other client projects.

Just so you know, I typically try to get up to 50% at the start of the project [or an agreed upon amount], and the remaining part on final delivery. My invoices state that I may charge interest for any balance left past due over 30 days.

I also charge for any work added to a quoted project, and any revisions that are made to already approved material.

Never really had any real problems before this. I know the economy is pretty tough right now, and I will [and do] work with clients with that in mind.

calilifestyle
09-07-2011, 12:27 PM
http://freelanceswitch.com/ and http://freelanceswitch.com/rates/


oh and don't forget Freshbooks

rcallicotte
09-07-2011, 01:53 PM
Does anyone recommend a good template for a contract or recommend a useful place to get a useful contract written? I'm assuming a lawyer might need to get involved.

calilifestyle
09-07-2011, 02:26 PM
On Freelanceswitch they have few resource links on legal forms

Nangleator
09-07-2011, 03:11 PM
Wish I had gone into programming, so I could have my product turn into a horrifically obscene virus after a certain date, unless payment arrived on time...

When you get the "Work on this job for cheap/free, and there will be more in the future!" thing, get them to give you lots and lots of their product for free, since you'll be buying more in the future, anyway...

calilifestyle
09-07-2011, 03:13 PM
well that's what Freshbooks is for,http://www.freshbooks.com/
you set up 3 free clients to try it out.

jameswillmott
09-07-2011, 05:20 PM
Oy, we were nice ;)


Yes, you were, sorry!!! :)

jeric_synergy
09-07-2011, 05:37 PM
Be hard. You may lose a job or two, but those clients were probably the ones you didn't want to deal with anyway.

Word.

hydroclops
09-08-2011, 07:26 AM
Being firm and draconian does not rule out being cheerful and friendly.

Money up front and payment on delivery is absolutely normal. Anything else and you're extending them credit.

If anyone acts as if this is weird or harsh, maybe they're an unqualified buyer.

As far as contracts go, the deal memo is an excellent format. This is a simple statement written in ordinary non-legalese language, that spells out the terms.

Titus
09-08-2011, 09:24 AM
Being firm and draconian does not rule out being cheerful and friendly.

Money up front and payment on delivery is absolutely normal. Anything else and you're extending them credit.

Yep. When the econony of a country sanks, bad business practices tend to appear. Here in Mexico we are used to give credit to our clients, from 30 to 90 days (in some cases 120 days). There's no way to get money upfront or full payment at delivery time. That's why I like to work with American producers, they usually pay at 30 days.

jeric_synergy
09-08-2011, 01:13 PM
Being firm and draconian does not rule out being cheerful and friendly.
"Cheerfully draconian since 1985!"® :D


If anyone acts as if this is weird or harsh, maybe they're an unqualified buyer.
Yup. The best day of your business life is the day you 'fire' your worst customers.

SBowie
09-08-2011, 02:19 PM
The best day of your business life is the day you 'fire' your worst customers.Been there ... :D

Greenlaw
09-08-2011, 03:15 PM
Back when I was freelancing full-time as an illustrator (about 12 - 14 years ago,) I would mail or fax a terms agreement for the client to sign that stated 30% to get started, 35% on delivery, and a final 35% payment due within two weeks or a 15% fee on the total payment would be added. Most of my clients responsibly payed in full immediately after delivery, but I had a few clients that would take forever on that last payment. However, in every case after I sent a new bill with the adjusted amount I would get the remaining payment almost immediately.

Lesson: put your terms down in writing and get the client to sign it before doing any work.

Regarding 'spec' work; did my share and they never paid off for getting more work. That said, the few I did accept back then exposed me to new 'cutting edge' technology (I had been asked to design two characters for realtime performance capture tests for a proposed TV game show...pretty exciting stuff back in 1997,) and I got to meet a lot of production people and got a lot of insight for the business, so this was at least a good educational experience for me. The experience also encouraged me to seek out more production related work and changed the focus of my career.

That said, these days I would not accept another 'spec' project. I now feel my 'work time' is just too valuable to give away for free, certainly for any commercial venture. (Maybe it's an age thing.) :p

G.

lardbros
09-08-2011, 04:33 PM
Got stung once, never again.... ALWAYS get contracts in place, and demand some payment upfront. Around 25-30% initially, then installments for designs and animatic, and then rendered and comped. Charge for CD burning, render hours, and get this all signed before you start. It's too easy to start a project that needs to be done fast, and think the paperwork can come later.

6 years ago, the first and last client not paying up £1600 for quite a large job, and it's too late to take it to a small claims court. Tried EVERYTHING, apart from court to get the money, but now put it down to experience, and forget about it.

The guy turned out to have lied to solicitors and web designers and other people too, and hadn't paid them more than he owed me... so, my tip is...

don't ever work for someone called BEN YARROW in the Bristol area of the UK. He seems like a nice guy, and may pay for the first job you do... but don't work for him!

The bigger the company, the longer they money will take to come. A friend did some work for Disney on a freelance basis, and the money took over 6 months to get to him and his small team. Guess they are small-fry compared to the other deals they are doing.

Dexter2999
09-08-2011, 04:44 PM
Not that I have done much freelance work but I usually make sure all work prior to the finished work are watermarked or at a substandard resolution (640x480). It keeps them from using the proofs without paying for the final.

30% up front.
30% upon approval of previs/animatic/proof
40% on delivery of final product.

Nangleator
09-08-2011, 05:14 PM
The bigger the company, the longer the money will take to come.
Did a personal job for a woman who was an ex-coworker, and good friend. She took over a year to pay, when I was desperate and begging her. And she was married to a billionaire. Not a millionaire, a billionaire.

Lessons: Don't work for billionaires. Don't work for friends.

Greenlaw
09-08-2011, 05:28 PM
The bigger the company, the longer they money will take to come.
Yes, I too found this to be true. My solution was to add the 'late fee' I mentioned and submit a new bill. The best way to get results from a corporate client is to get their financial department asking questions.

G.

Titus
09-08-2011, 05:33 PM
Did a personal job for a woman who was an ex-coworker, and good friend. She took over a year to pay, when I was desperate and begging her. And she was married to a billionaire. Not a millionaire, a billionaire.

Lessons: Don't work for billionaires. Don't work for friends.

Why do you think they are billionaires? :D

akaracquel
09-08-2011, 06:27 PM
Why do you think they are billionaires? :D

hehehehe :D :thumbsup:

I know some will only fly exclusively in First or Business Class - but maybe some might be ok with Economy :)

Wow. Fantastic feedback & good reading. Thank you [all] for sharing your experiences, advice, info on lessons learnt and links to resources. I've also enjoyed reading articles on the web that describe different styles of clients, how to deal with them, along with warning signs of the dodgy ones. It's great to see that pulling the trigger on a fire button has lead towards super fantastic moments in other people's lives(businesses) as well :thumbsup: :D

I'm probably somewhere in the middle of the sweet vs sour spectrum. I've had an uuuuuber-long-term permanent role at this end, paid by the hour without needing to quote - so currently preparing in advance if my situation ever needs to change in future. Always paid, 13-day average, but moments where payment has been 25-65 days on occasion (ouch!). Strategies currently working, but may not necessarily work for others in a similar situation/work-model:

* Making invoices much smaller, but more frequent - it's encouraging payments to be weekly, instead of a fortnight
* Setting a $$ limit in the amount owing, especially when it's a big assignment of work. If it encroaches towards my limit, it's time to scale back the pace/delivery, so I don't work too many hours in advance unpaid. Currently have to bite my tongue if I hear "Have you finished xyz yet? It's only a two minute job! URGENT!" …but I don't take it personally.
* probing the company's accountant for payment ETA if things are getting tight, instead of confronting the client

Upfront payment structures - good to see others practising this, it doesn't come across as unreasonable :) I feel drawn towards the creation of a late payment penalty/interest fee, even though I can see the upfront structure kind of negating it's need in a way(?) Curious to know if anyone has pitched this in reverse, where it's presented as a discount for early/on-time payment - but payment on the later date may be the one which incurs interest?

Dexter2999
09-08-2011, 06:39 PM
They did a great series about being a freelance over at FXPHD. It isn't'/wasn't free but some good info in there about how to price yourself competetively.

One of the things I never thought about was the warning about letting one client become the majority of your work. You don't want to cut deals with people to get tons more underpriced work. Also, if these people know they are your biggest customer they can begin to throw their weight around with demands and threaten to leave if you don't cave in. Mike Seymore referred to them as "gorilla clients" and they are to be avoided.

Greenlaw
09-08-2011, 07:05 PM
The way I presented it, the first 30% was a start up and potential 'kill' fee just in case the project was cancelled before the due date. In which case, I would at least get something for my time. It should be made clear to the client that they will not receive the final work if the project is 'killed'. If however I completed the project by delivery day, I would expect to be paid in full. These terms (or whatever terms you decide is fair,) are things that need to be understood by both parties.

Setting your terms in writing is common practice in any service business, and a freelance artist should not be excepted from this practice...it's not professional. If a potential client doesn't accept that, I would question their intent to pay you for your time.

There is also the matter of what publishing/ownership rights the client is purchasing, which should be reflected in the amount you charge, but that's a whole other bucket of discussion. FYI, for my illustration work, the clients typically got first printing rights for whatever the project was (back then it was typically art created for children's books and educational material or artwork and toy designs for fast food restaurants.) Unless they paid extra they did not get any 3D assets I used to create the work, just the final art for print.

G.

Lightwolf
09-08-2011, 07:07 PM
I feel drawn towards the creation of a late payment penalty/interest fee, even though I can see the upfront structure kind of negating it's need in a way(?)
You can certainly do both, they serve different purposes:
a) get paid
b) get paid in a timely manner

Curious to know if anyone has pitched this in reverse, where it's presented as a discount for early/on-time payment - but payment on the later date may be the one which incurs interest?
It used to be customary here (Germany) to have a 2% discount if the bill was paid within a fortnight. Or slight variations (i.e. 4% is paid within a week). It probably still is when dealing with builders etc.

However, one possibility is that some customers may still pay late but deduct the discount anyhow. And then it's not worth it to chase them for a couple of percent.
Mind you, those would be the same ones that ignore penalties as well (with the same outcome, it's not worth it).

Cheers,
Mike

mikala
09-11-2011, 02:39 PM
I'm fond of this video.
A few tidbits in it.
http://vimeo.com/22053820?utm_source=swissmiss