In this months Mind Your Business, Mark Simon tackles the ins and outs of a freelancers dreaded necessity invoicing.
Hey buddy. Can you spare a few hundred dollars? How bout if I invoice you for it?
Actually, thats the secret to getting paid as a freelancer. Its quite easy. You just have to ask people for it. Yeah, sure, you have to do something to earn the money, but hey, being an artist for a living beats any other type of work.
You dont believe me that its that easy to get paid? Doing the work is the hard part. Getting paid is the easy part; just give your clients an invoice. Its just as easy to not get paid. Do a job for someone and then dont send them an invoice. Chances are, without an invoice they wont pay you and its not their fault. You need to ask them for payment by sending them an invoice. (Youre actually telling them with the invoice, but it sounds nicer to pretend youre asking.) While this may seem obvious, artists are notorious for not invoicing in a timely manner.
Do what I do. After years of panhandling at the corner of Freelance and Vine, Ive learned to send an invoice right away. Include it with the delivery of your final art, hand it to them, fax it to them, send it as an e-mail attachment or write it on a piece of scrap cardboard, but get it there. The busier you are, the easier it is to forget to send invoices on past work, so dont delay. Most companies have a schedule when they cut checks. If they cut checks once a week, every day you delay may cost you an extra week in getting a check. Many companies wait at least 30 days to pay from when they receive your invoice. If you wait three weeks to invoice them, it may take yet another four weeks to get your check. I dont know about you, but I dont want to wait seven weeks to get paid.
Your invoice should have six main items on it.
1. It needs to include your name and/or your company name. Use the name you want written on the check.
2. It needs to include your address so they can send the check to you.
3. It needs to include your Employer Identification Number (EIN) or your social security number. If you dont know whether or not you have an EIN, then you dont.
4. Number your invoices. Clients need a way to tell your invoices apart. You also need a way to track your invoices and which ones have been paid.
5. Include a job description, P.O. number and a job number if available. Ask your client for this information. It helps them to quickly approve the funds for your payment.
And 6.. what is this one? Oh yeah, the amount they owe you.
Of course to invoice a client, you have to know how much to charge them. The obvious way is to charge them the amount you agreed to before starting the job. That makes sense. If you need help determining rates, check out the latest edition of the Graphic Artists Guild Pricing & Ethical Guidelines Handbook. (www.GAG.org) It not only lists common rates for most illustrative arts, but it also contains sample contracts, rights issues and trade practices.
But what if you are giving your client a discount on your current job? Most intelligent humans understand that a deal means a one-time opportunity," "a discount off of the normal price. But many clients do not act like intelligent humans. They have selective memory and all they will remember is how much they paid you last time, not whether or not you had given them a discount. Ask anyone who has been in business for a while, and they will tell you how this has happened to them.
Ill let you in on a little secret I discovered on how to make sure clients always remember your full rate. Always charge them your actual rate... and then discount it.
Lets say you normally charge $500 per day for your services on a three-day job. Your client says, Look, I need a favor on this project. (This is when they panhandle from us.) Plus, if you give me a good deal on this one, I have a four-picture deal and Ill make it up to you on the next one. Ill even give you a home to live in. Maybe you decide to believe this line of crap and give them a deal for only $200 per day. (Giving clients a deal now and then is good business; just make sure its for the right reasons.) Ten times out of 10, they will call you on another job and offer you the same $200 per day because they know you will work for it.
To help keep this from happening, invoice them for the entire $500 per day for a total of $1,500. Invoice them for the total $1,500. The shock of the huge number will be seared into their brains. Then subtract a $900 discount from the sub-total to equal the $600 amount you agreed upon. When they call you again, they are more likely to remember your actual rate. Even if they dont remember, you can point them to your old invoice as a reminder. Dont lower your rate. Discount the total. This trick works better than begging for more money.
Besides your fee, dont forget to charge clients for applicable, and agreed upon, expenses. Do not send an invoice with just one figure on it. Separate your fees from the expenses. It will make a difference on your taxes and theirs. You dont get taxed on repayment of expenses. The tape I bought to hold my shoes together should be considered a clothing expense, not a fee. You can also mark-up expenses you pay for to cover overhead and help maintain a healthy cash flow. Customary mark-up rates range from 15-25%.
When your invoice hits 30 days, feel free to call or walk up to your clients accounting department while they are stopped at the light and ask about your payment. You may find that it had gotten lost or misplaced in their system. Funny how that happens. The longer you wait to call, they longer it could take to get paid.
Dont feel hesitant to send an invoice. Youre not asking for a favor. We all expect to pay people for their work. Most of us even get checks that clear. But if you dont ask, you wont receive. So, can I have a dollar?
Mark Simon is an award-winning animation producer and lecturer who is also the author of Facial Expressions: A Visual Reference for Artists, Producing Independent 2D Character Animation and Storyboards: Motion in Art. He can be found lurking around at www.FunnyToons.tv and may be reached at Mark@FunnyToons.tv. Marks books may be found and purchased online at www.MarkSimonBooks.com.