Rule 33: Being a Shark part 1

One part of being a shark is making sure that you get paid. For artists, producers and other creatives this means hiring the right business managers and consultants.

Think about this. You’ve been working on several projects for a specific client over the year and you’re due another payment in November. You’ve completed the work, sent your invoice with the amount of money that you’re due and yet you’ve still not received payment. You call the client, but Thanksgiving comes and goes before they reach back out saying that they’ll pay you immediately.

You make several attempts to contact the client during the busy Christmas season, but dont’ hear anything back until early January when they finally answer, send you payment, and with a straight face they say… “I’m sorry for taking so long to pay you, but you know how it’s kind of tight around the holidays.”

As if you don’t have bills, or children or any number of things that need to get paid.

Just as there is a time to be fair, collaborative, timely and foster creativity. There are also times to be shrewd, decisive and unbending

Making sure that you receive timely payment in full is one of those times.

You provided a service, completed and delivered the work on time so you deserve to be paid, but, understandably, it can be hard for some creatives to be a shark at this very important time.

Below are some tips to ensure that your client understands their payment obligations from the onset and will give you the confidence to speak up while giving the client very little wiggle room to pay late.

Ensure that you have a solid service agreement that references the information that will be on the invoice and then attach a copy of the invoice to the service agreement as an exhibit.

The service agreement should mention the day of the month that you will send the invoice and that the invoice should be paid in full. If you’re on retainer you should use language stating that the retainer will be “replenished” in full. The agreement should also mention the number of days that the client has to pay the invoice or replenish the retainer, the type of payments that you accept and if there is a fee for the payment service you should clearly state that the client is responsible for those fees at the time of payment.

You should also list what service that you provided and if you’re getting paid hourly you need to document and provide your hours. This is a good idea to provide even if you aren’t being paid based upon the amount of time you spend working on the project.

Set aside time at the end of each month to do your billing. Depending on the number of clients or the number of hours you work you may have to spend an entire day putting together documents. Even if you’ve outsourced your billing you’ll still need time to review or answer any questions until the billing service has worked out all of the kinks.

You must be disciplined with your billing and invoicing. At a minimum you should discuss it with your client once a month to ensure that they are aware that the bill is coming and approximately how much the bill will be.

Usually, if you do things right, the longer you have a client the less time you have to spend worrying about payment, but early on it is important to set the tone that you’re providing a professional service and to do that you need to be paid professionally.

Document Everything. Invoices should be sent via email and I recommend using a tool to track whether they’ve opened the email or not so that you get an alert when they see the email.

If the client does pay late or does that pay in full you need to keep note and send follow up emails to your client documenting these late and partial payments. You don’t need to be rude, but you do need to ensure that the client is aware that you are taking note of their unprofessional behavior in the event that you have to file a claim in court to ensure that you receive payment.

Provide a discount for on time payment. Providing an incentive for clients to pay on time will work for some clients. You’re not actually providing a discount. In reality, you’ve marked the price up to include a penalty for late payment that will be waived if you’re paid based upon the on-time payment terms of the service agreement.

Too many creatives and creative professionals are being paid late and unfortunately these late payments are often enough to put you out of business. Also, having these uncomfortable conversations with clients provides practice for being stern when more serious issues arise like when you’re negotiating a contract.

Do you have any tips for ensure that creatives and creative professionals are paid on time?