An essential thing for running a successful business and project is having money to pay for the things that you need. To mitigate risks on a project, one thing you can do is to enact a payment plan. In this movie, author Richard Harrington gives a broad overview of different options for payment plans and how they operate.
- One thing that's pretty critical to running a successful business is having money to actually pay for all the things you need. Now, it's great to put together a great budget, and to land a project and close the client with a well-written proposal, and to even get a signed agreements, but if you don't actually get invoices out there, and get the cashflow flowing, then you are essentially functioning as a bank. Throughout the years, I've had bad things happen, like everybody else; clients who've been awesome for years suddenly go bankrupt, changes in leadership at a company, even ownership, a business getting sold to another company who suddenly didn't wanna pay our bills.
Well, it's pretty important that you have this protection in place, and that you mitigate your risk by getting progress payments. There are lots of different ways that you can receive payment. Let's go over some of the different styles of payment that you can consider, and then we'll explore them more in-depth. Payment terms can include period based payments, this is time-based, so as certain time passes, getting paid based upon intervals, such as months or weeks. You can also do at time of service, maybe you're doing work very quickly for somebody who's just in for one job, or maybe they're renting equipment.
It could be pretty important that you get paid right away. If I'm in a different market than I normally work in, and we hire freelancers or actors, a lot of them expect to get paid when they show up on the shoot, or to at least get half of the money, and the other half at the end of the production day. It's important that you feel, and they feel, that both parties can be trusted, and if you don't have that trust from past relationship, you might wanna get paid upfront. Progress payments, though, are most agreeable on bigger projects and particularly when you're working with a company or organization.
This means as certain milestones are reached, things can get paid. For example, at time of starting a project, once the script's delivered, when the shoots start, those are all milestones that can be measured and paid for as the goals are hit. And the last one is at end of month. This typically works well if you're a freelancer and you're logging your hours. You might be asked to submit a timesheet for the time spent, and then get paid, or perhaps you're doing a contract and you have expenses. You'll submit those along with your monthly invoice, and you'll tend to get paid at the end of the month.
There are lots of different methods and approaches, why don't we explore them in a little bit more detail.
- Evaluating outsourcing and partnering options
- Setting your rates
- Incorporating material and overhead costs
- Scoping the project
- Estimating the production time
- Collecting data with time tracking
- Creating a quote or proposal
- Setting payment terms
- Creating an invoice with Word or Pages
- Dealing with billing and collections