Tuesday, May 6, 2008

Invoices

Just as the photography and the production of a job is important so is the follow up. Specifically meaning invoices.
Invoices can be annoying and a daunting task. As far as agencies go, I have found that a project will usually get a 50% advance (sometimes 75%). As an art buyer closing the job is super important and time consuming. I love when photographers/reps send a detailed and comprehensive invoice. Line item by line item with the receipts to back it up. You always have to have the proper receipts attached otherwise the accounts payable people will not always pay them. The backup information is key to the bottom line. Art buyers and accounts payable will go through them (usually) with a fine tooth comb to make sure everything matches up perfectly. I have found both sides benefit... I once had a grocery receipt attached as misc. expenses (had that removed) and I have also found that the rep company miscalculated a cost and had to have additional money added into the bottom line.

Have a detailed and easy to read format and system for your invoice. The more concise your invoice, the easier it is for the art buyer to go through and phone in with any questions and the faster it gets to the accounts payable people.

Tips I have learned:

Lost your receipt: put everything on a credit card. If you lose the receipt you can send the credit card statement with the missing receipt highlighted.

Send back all non-returnable props, wardrobe, etc., no matter how crazy the item. The clients have paid for it and they'll want it back or to at least have the option of keeping it or donating for a tax write-off.

Get overages signed off on while on set with the art buyer/producer and client. I have never experienced a client not paying what is owed but they hate being surprised with overages after the fact. I will always write out what the overage is and have the account manager and client sign off before it is incurred. But it is super important to discuss the overage before it's incurred.

Charge for mileage if you're driving around from location to location. Especially with gas prices the way they are you should be charging for mileage (I think the current rate is .485 per mile).

Always state when the payment is due (i.e. 30 days from invoice date is usually pretty standard) and if past due the percentage of interest that will be charged that way there are no surprises. I always try to process the invoices as quickly as possible and submit them but agencies and clients have their own billing cycles which may not match these dates. I have also found that once it leaves my hands I'm not aware of the status until the photographer/rep calls or emails and lets me know they haven't received payment (usually it's 45 days past at that point). Always keep up with your dates and payment, it never hurts to send a follow up or checking on payment status email to the art buyer/producer

Make the invoicing as smooth as possible (just like the shoot and the beautiful photos you produced) and you'll have repeat business.

9 comments:

Simon Winnall said...

Thanks, very useful info!

Anonymous said...

I'm interested to read that you advocate attaching receipts for all the expenses... From what I've seen, marking up expenses is a pretty common practice (if for nothing else, to cover the expense of covering the "loan" until your invoice is paid). I know of other colleagues who use this to actually generate extra money off a job. I guess I assumed that on the bigger add jobs this sort of thing would be even more prevalent. I take it I'm wrong there?

Anonymous said...

Receipts? What about markup?!

Oops, I see someone already posted this.

Bruce DeBoer said...

From my experience this is all fairly standard stuff on large budget jobs and very good advice. Mark-up on expenses is usually fine as long as it's stated up front and doesn't feel excessive.

If you ever questioned why a producer is important, repeat after me: "did you get a signed change order?"

Anonymous said...

I've never supplied a receipt on an ad job. Does the agency submit the Photographer's invoice to the client? What about the interest I have incurred on my line of credit for 6-8 weeks? What about the cash flow I don't have while I'm waiting to be re imbursed for the production I have financed (even if I do get a 50% advance)? Mark up is not only standard, but a necessary business practice - amongst my peers and experience working in three different countries at least.

Brian Solano said...

The mileage rate has gone up since 2007. The current rate is .505. Thanks for a great post!

burnsautoparts said...

sAgencies often argue that they need receipts for tax reasons, however, this is, in fact, wrong. Well, yes, they do need a receipt for tax reasons, but the photographer's itemized invoice is their receipt. The photographer needs the original receipts for HIS/HER tax reasons. S/He cannot deduct the cost of props, etc., as a business expense without the original receipts and if the cost is passed on to the agency (hopefully with a mark-up) that is then recorded as income.

Oh, and a photographer should charge as much as s/he needs to for mileage--it has NOTHING to do with the IRS-listed rate. If it costs you (for example) $1 a mile, then you must bill $1 or more per mile, or you are losing money.

--Leslie

Caitlin said...

I've found mark-ups are usually wrapped into the creative fee or wrapped into misc. (an understood cost but not a line item in my experience and not an excessive amount.) I have always had to have receipts to back up the costs - not necessarily the originals but definitely legible copies of the receipts to back up the costs (I also put this as a line item on my purchase orders so there's no surprises). Nowadays many clients are asking to see the invoices from the photographers. But this doesn't mean you should eat the interest costs at all! If I submit an expense report I don't want to foot the interest if it doesn't get paid in a timely manner.

Mileage is pretty standard in agencies if you're driving your own car I've found they adhere to standard IRS rates ... which is why I would recommend a rental car if you think the mileage rates are not fair.

thanks!

Bruce DeBoer said...

This really is a screwy business; not my grandfathers hardware store.

The bottom line is that every business activity has a charge related to it. i.e. If it cost you $1/mi. to drive and the agency reimburses (what is in now anyway?) $.45 / mi. then the "fee" portion of travel goes up. Likewise, Agencies that need back-up are being charged an administration fee somewhere in the bill because it may take an extra hour or more for the book keeper to complete the invoice.

Hmmm - maybe we are like my grandfather's hardware store after all.