Invoice fees

Posted: Sun Jul 01, 2007 5:37 am

Couple of question on fees.

Would you guys please give me some advise on how you brake down charges for studio time.

What does your invoice look like and consist of?

..and when you record your own band, how do you charge them any differently and show them the break down of charges.

Thanks very much guys-!!

-jim

Posted: Sun Jul 01, 2007 9:27 am

Firstly, putting together a list of charges and payment terms AFTER they've done work in your studio is too late. You're probably going to have to eat this one, at least for now. (Recording friends or your own band is a completely different animal than recording outsiders or strangers. BIG difference, and it's best to have everything clearly defined ahead of time.)

Use a word processor like MS Word for the actual printing & presentation. (The more professional looking, the more it will get their attention and respect.) You may want to use 8x11 sheets for the master list, and then get some heavier stock for smaller fliers or table-top displays. You may also want to create a "project sheet" for each job that clearly defines what it is you're doing with each clienht. (CD tracking session. CD Mastering Session. CD editing, etc.)

I like to let folks know ahead of time what to expect, so they've gotten my price list ahead of time and avoid sticker shock. Generally, I don't get too picky about the little things and extras. (You WANT to give them a reason for coming to YOU instead of the other guy, right?) There's a fine line between being cooperative and being a doormant, but you can probably find a balance.

I charge an hourly rate that I can live with, so most services are included. A temp copy (or two) on CD for each day's session is usually included gratis. I don't encourage more copies than that for a variety of reasons that you can probably guess. (Don't want to give away the store to everyone in the band, nor do I want too many "Rough" copies out there, plus only one or two people in the band should be making the decisions anyway.)

As for master tapes and HD space, the going rate applies. Surprisingly, some clients know (or care) nothing about master archives, so I keep them in storage for them. (Encourges return work and customer loyalty, among other things). Others want to own and control everything after the session. In that case, we either charge them for the HD with just a little markup, or tell them where to go buy their own media. (in our case, its' Western Digital HDs, we won't recommend anything else, having learned the hard way with other drives that aren't as robust.) Ditto for tape stock, although that's almost gone now, unless someone wants something specific, and again, we show them what it costs for the raw materials.

Everything else is by quotation - gear rental for something exotic, unusual
formats, etc. Overtime should be clearly stated, ditto for "emergeny" or "Rush" work. (There WILL come a day when you're booked and quite busy, and someone calls you with a drop-dead, must-have-it-by-tomorrow deadline.....what do you do? what do you charge? Again, your policies should be clearly stated ahead of time. )

In most cases, we've had little or no sticker shock with clients in a long time, because the rates and extras are clearly stated ahead of time, and we keep track of the session work as we go. The client books the time, we start on time (I always discretely look at the clock above my console just when we start). When the session ends, I also make a point of saying something disarming yet pointed about the hours, like "Well, that was a very productive 3 hrs tonight. What day and time would you like to arrange for next time?" That way, they know what they just did, it's been stated out loud, and there's no confusion.

Always find out who's the check-writing person in the organization, and who's going to get the invoice. THIS is the person you deal with, and this is the person who will understand what everything costs. A good client coming in ahead of time knows what they're spending, what the studio time is worth, and what needs to be done in the time they have budgeted. It separates the men from the boys fairly quickly.

You may want to bill for work as you go, or have a specific time-frame for billing. (Work in progress, etc.) This should also be in your rate-sheet. You must also clearly state your payment terms: Cash, Check, Credit Card, PayPal., etc.

You should also state something to the effect that no finished work will be delivered without payment in full. That's your ONLY collateral at this point, and you are completely within your rights to stop work (and hold the masters) until payment is made, esp if they're running late. It's harsh to ever have to do this, but sometimes it's the only way to protect yourself. You have to be diplomatic when this happens, but it WILL get you results. (You may say something to distance yourselve personally, like "hey, it's not me, its' my accountant that makes me do this...")

Most of all, you want to avoid hard feelings, (real or faked - to make YOU feel bad), and you want to get paid fairly and timely so you can keep on doing what you're doing and enjoying life.

DONT let anyone push you away from this. If they do, they're no kind of client to have. If anyone gives you a hard time about paying legit bills for your hard work, don't be a schmuck and let them waste your time a second time out.

Good luck getting a list together. You'll be glad you did!

Posted: Mon Jul 02, 2007 6:06 am

As usual JoeH has hit the nail squarely on the head. I will only offer a few extra comments.

Many clients do not understand the whole recording process or have never done a complete recording from beginning to end so the more you can tell them about the process in the beginning and as you are doing it the better off you will be. Also your invoices should be detailed and I usually jot down on a piece of paper the materials that I am using and the hours that have been spent and add them to the invoices as we progress.

NO ONE LIKES SURPRISES when it comes to the final bill so I keep clients informed as we go as to their current balance. I can't emphasis enough the idea that you have to keep your clients informed of everything you are doing and that has to include how and when you expect to be paid. Some studios around here bill at the end of the work some bill as they go. How you do it is up to you but you have to let your clients know in the beginning what your expectations are.

Some clients are not ready for the amount of time and money a real recording takes and they will start to get edgy and do a lot of looking at their watches as the time grows longer. If you have some experience in how long it takes you to do a recording session you should, in very broad terms, tell them APPROXIMATELY how much the whole job will cost and make sure you tell them that you are billing for time and materials and if they take longer to get their act together you will have to bill for additional time.

Your invoices should include all the charges and any extras you are providing. If we make a couple of extra refs for a client and are not going to charge him for them they still go on the bill with NC (or no charge) in the $$$ column. This does two things. It helps you understand what extras you are giving away and does the same for the band when they see a couple of extras thrown in for NC. There should be no ambiguity in the invoice and everything should be spelled out. Some many hours at such and such rate on this date. I have seen invoice that say recording services $2,500.00 and that is all and if their are problems later on it is hard to break that down into time spent and materials and I think that is why some studios do it.

Best of luck and if you have further questions please let us know.

Posted: Mon Jul 02, 2007 6:55 am

Excellent follow up, Tom. You too nailed a few things.

I totally forgot about the "no charge" stuff. My brother (a salesman) pointed out that approach to me many years ago. (If you don't list the freebies, how are they going to know what extras you've done for them?) It's also great for documenting what you have already done for a client should there ever be any questions or confusion. (ESP if things get ugly, and we all know the law of averages dictates that WILL happen, sooner or later, with a client.)

I provide a lot of "free"dropoffs to clients if we're going to be making deliveries in the same area, etc. Very often my assistant is making a few drop offs for me all in one day, so if the timing is right, we just include a temp CD in the pile for a client who's nearby. In other cases, we'll absorb some postage if they can wait a day or two. But whatever the case, shipping is clearly marked "INCLUDED" in the invoice. (Of course, "Gotta have it NOW" stuff goes Fed Ex, and they pay for that! Wink

)

Funny story about how hours can pile up: We had a VERY hyper client (a woman, who does local commericals, voice overs, on-camera stuff, etc.) who was driving us batty with endless editing, changes, redos and insane workflows. It was endless. She was never happy with what she'd created, (an audio/video demo DVD) and then want more changes. We kept a list of what time she'd run up to date, and when the inevitable "Brawl" over the bill came up, we were ready for her. Astoundingly, she accused ME of running up her tab so we could "milk" the project. !!!!!!! I finally convinced her that nothing would have made me happier than to wrap up her edits and both move on. Finally, we did, and parted amicably.

Good paperwork will save your butt when things get dicey. Rolling Eyes

Posted: Mon Jul 02, 2007 9:31 am

We had a client similar to what Joeh was describing and he was driving us crazy so I made up a dummy invoice and as we finished up parts of the recording I filled in what we did and had him sign and date the requested services and at the end of the project there was NO argument (or very little) sometimes you have to out think the client,

Posted: Mon Jul 02, 2007 11:13 am

As a side note, has anyone every had to sue a previous client for failure to pay? I have never done that, but I did one time have a customer skip out on the final bill. Just curious...

Posted: Mon Jul 02, 2007 11:38 am

I've had every version of deadbeat you can think of, but usually they pay up in the end. Only one actually went into legal claims, and in the end, nobody won (except the client's attorney). I handled it myself on the phone, and in the end, he got his old tapes back (but without my work on them). I got no $$, and his lawyer charged him for the hassle.

Once in a while, a client will totally vaporize, leave us holding the bag, so to speak, and just "go away", but it's rare.

And no matter how hard I try to nail things down ahead of time with production agreements, estimates, invoices, etc., there is always a client that comes up with a novel reason why the bill hasn't yet been paid.

Here are a few:

The Accountant is sick.
The Accountant's (insert family member here) is sick.
The accountant had a baby, or son/daughter has had a baby, or has gone on vacation, is out to lunch, or (one of my favorites): "Isn't cutting checks until the end of the month". (don't you with YOU could get away with that?

Another one is: "We need to two signatures for a check like that, and the CEO is out until next week."

And this: Accounts Payable never got your invoice. Can you send another one?

Of how about: We need a PO order from you, then we'll run it through accts payable, then in 30-60 days, you'll get a check.

As you can imagine, a lot of these are excuses from corporate accounts, but there's no end to the "creativity" people will come up with when delaying a payment. We've added a not-so-subtle clause to our "new client" contracts that read something like: "YOU are responsible for getting this invoice paid, by whatever internal means required within your own company."

Another nice tip if you can afford it is to offer discounts for early payment, an attractive SMALL discount for ontime payment, and whatever late fees you think are fair an proper for late payments. If you're dealing with a client with an actual accountant onboard, the accountants LOVE early (discounted) payments, and NEVER let a bill go into late status (with fees.) It makes 'em nuts. Wink

Posted: Mon Jul 02, 2007 11:43 am

I have two clients that I am going to have to sue.

One is a heavy metal band the other a minister.

Both owe us money - one from about 6 months ago the other from a year plus two months.

I usually turn the stuff over to my lawyer and he sends them a registered letter which in the past has worked. If not that then I take them to small claims court, which in Ohio is a joke. It cost me money and if they do not show up there is no judgment entered and if they do show up their is no way to force them to pay.

I have a good friend who runs a sound company and he took a client to small claims court and they found in favor of my friend and the the person sued said "fine I will pay you back at the rate of 1 cent a month" and there was noting my friend could do. It is BEST to get the money up front.

I may use a collection agency this time for one of the clients as he has been very slow to pay in the past and we extended ourselves to help him out and then he does not pay us. It will cost me about 30% but the company I use has a 90% retrieval rating. 70% is better than 0%.

FWIW

Posted: Mon Jul 02, 2007 12:17 pm

To clarify on suing:

If they don't show up, you can request a summary default judgment.

The problem with collecting still stands though.

Posted: Mon Jul 02, 2007 12:26 pm

Not in OHIO! the judge said there was "nothing else to do" when the client did not show.

Posted: Mon Jul 02, 2007 1:36 pm

Could you call credit bureaus about the person/company? At least stick them with the bad credit.

I realize it'd be more difficult with an individual as there are so many people with the same name, but companies surely should be easier. Yes? No?

Posted: Mon Jul 02, 2007 4:46 pm

Thomas W. Bethel wrote:

Not in OHIO! the judge said there was "nothing else to do" when the client did not show.

He lied.

http://research.lawyers.com/Ohio-Small-Claims.html

I personally know about this, plus the above link.

Posted: Mon Jul 02, 2007 4:57 pm

Interesting Link:
"you can start trying to collect the judgment by garnishing wages or bank accounts, or trying to locate the personal property of the person who owes the judgment."

I will have to check how it works in Canada....

In your opinion's are there any tell tale signs of dead beat client?

In retrospect I should have never agreed to work with my problem case. But he was such a nice guy......damm

Posted: Mon Jul 02, 2007 7:46 pm

MadTiger3000 wrote:

Thomas W. Bethel wrote:

Not in OHIO! the judge said there was "nothing else to do" when the client did not show.

He lied.

http://research.lawyers.com/Ohio-Small-Claims.html

I personally know about this, plus the above link.

Thanks I am going to go up to the court house tomorrow and ask about this. The judge said there was NOTHING I could do since the person being sued did not appear. I wonder what is going on?????? Thanks much for the link.

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