Working around Net 30 jobs as a freelancer

Hello,

I wanted to see if there was anyone who has any advice regarding getting around net 30 jobs. I work as a freelancer a lot and I know it is typical for companies to be operate as net 30 on payments, but I wanted to know if there were any contract clauses or agreements that would get around this. Ultimately I know I can not accept a job if I know in advance that the production company is net 30, but I wanted to see if anyone else had different experiences working with them.
Thanks in advance.

Comments

  • Heya! Net 30 is a total mess, obviously. But if your concern is that they will end up not paying you there are some good ways to work around it/adapt to it (if absolutely needed) to ensure that you do actually get paid in a timely manner. That being said, most people I know (myself included) who work with net 30's though, only do so when they have a previous positive relationship with the company.

    As for contracts, if it's a net 30 company, chances are they won't be too keen to remove that part from the contract full out, but you can introduce some safety mechanisms for yourself if you aren't already. Put in a 1/15 or 2/15 discount clause (if they pay in the first 15 days, they get a 1% or 2% discount etc.) to motivate them to pay sooner rather than later. You can make this whatever you'd like to be honest. I have graphic artist friend that will write in a 5% discounted if paid in the first 2 weeks (14 days) after their invoice is issued, but who will account for this in their overall price. It makes companies feel like they are getting a great deal by paying quickly, but personally 5% seems like a long way to go for me.

    But also, you can introduce a penalty for paying late. It is not uncommon to include an interest rate that must also be paid if the client does not pay on time. You are technically extending them credit, so it makes sense to include an interest if they don't pay that credit off in the time frame agreed. A lot of freelancers don't think to do this, but it can be really helpful.

    In either case, just be sure that your contract has a clear indicator of when that 30 days starts, otherwise they will do their damnedest to put off payments until you give up on hounding them. Completion of services, date invoice is issued or received, doesn't matter, just try to get them to agree to whatever works best for you.

    And as you already seem to know, if they aren't willing to make these adjustments, not worth your time.

    Not sure if this actually answers your question at all? Here is a more detailed article though that discuss the points I made and some others that may do a better job than me. https://mixinglight.com/color-tutorial/why-you-should-avoid-net-30-billing-terms/

    Good luck, and please let me know if you come up with any other solutions!

  • I've been freelance since 2008. Almost all businesses I have dealt with are NET30. You have to build in ways to be prepared for it. For example, set off percentages of all payments, to allow you to float until then. Sometimes you can ask for a percentage of the project price up front to help with rental costs and such. One tactic I use regularly is giving the quickest response and best service to those companies who pay early and on time. If you go over 30 days, I will be sending regular emails and phone calls until payment is rendered. There is no excuse for a company of any stature in this day and age to go over 30 days. And of course the number one way to protect yourself is to have a contract for every single project. No tolerance for not having a contract.
    Always leave money in your business to cover expenses and operations (back to those percentages again). I pay for Freshbooks, Adobe Software, etc. Make sure no matter what, there is money in your account to cover this. If you are not making enough to do that, then you need to reconsider being a freelancer. It is super tough out there right now with "creative schools" dumping out new creatives every 6 months taking jobs at lower rates.
    Just my two cents. Good luck.

  • edited September 2017

    .

  • Contracts, Contracts, Contracts... for multiple reasons. A) calls out the BS. they dont sign, they are probably jacking you around. B) Back plate pressure. 3 points a week is a stiff vic. C) its a great tool for remembering one single project out of 15 years of work. one document defining all intentions, compensations and predetermined boundaries.

    just my 3%

  • I have clients that pay net 30, I hate it, but for the ones that operate that way it is what it is. For bigger companies and networks there really is no excuse for this kind of thing, but if that's the system that's in place the only alternative choice is not to take the work. They won't change their accounting for you or for me because we don't like it.

    Obviously payroll is the best when you know that you are getting paid at the end of the next week, but many smaller companies (and some big ones) would rather hire as an independent contractor. I have many of those- the nicest ones cut the checks at the end of the day, some some pay within a few days of the invoice and anything up to net 30. The most important thing is to keep records of who owes what and the date of invoice. I'll start chasing at Net 30 + 5 days as some companies will cut the check exactly on the the 30th day. This gives time for the mail even if they are sending from an office from the East coast. I just have whiteboard on my desk and each invoice gets added to the board with a dry erase, the amount and date. As the checks come in I wipe of the entry.

    For some small clients I know that they are on net 90 from their clients and so I don't really have a problem taking the net 30 from them. I do however draw the line at clients that try and pull the we'll pay you when we get paid by our clients. That for me is too many red flags. If they are living paycheck to paycheck and don't have a float to cover their day to day to day and project expenses then screw that. I'm not taking the risk of net getting paid if they don't get paid, or going to the bank only to find out that their checks are made of rubber.

  • I was able to negotiate a net-90 client down to a net-30 after repeated paperwork SNAFUs on their end turned it into a 180-day turnaround. But that’s an exception.

    Honestly, when my wife was still working an 8-5, they were on a “net-30” AKA a once a month pay period. It can be difficult, but you adapt over time. I’ve seen lots of “tricks” tried with companies to make them pay a net 7 or something less than 30 and they always end up backfiring. I recently saw an invoice get kicked back to the freelancer because he put “net 7” on it. The job was - and always has been - a net 30. By putting net 7 on it, the accounting department rejected it and now he has to refile - costing him a week of pay.

  • edited September 2017

    Old media is notorious for payroll and employee law violations. Here's a brief list of what I've encountered: (please share yours!)

    1. The practice of hiring employees as subcontractors but in reality they served as employees under direct control of management so the subcontractor status was invalid. As a subcontractor payments would thereby be weeks late while the producers were paid weekly as employees. Completely unfair and outrageous. It happens continuously and it is a violation of labor laws.

    2. The old "oh we lost your paperwork" trick which necessitates waiting weeks for your paycheck and then having them tell you they lost your paperwork so waiting additional weeks for them to recreate everything you've already filled out. Complete nonsense! It's happened on a number of occasions to me.

    3. "The accountant is dying so your paycheck will be delayed." That's a great one I've heard. Am I supposed to be sympathetic or outraged?

    4. The executive producer is on vacation... In Vegas or Paris or Italy or some distant place. So your paycheck will be delayed a week or two. Tough luck and thanks for all the great work now keep working!

    5. Even though you're in the union and you worked 100 hours of overtime that overtime is going to be paid at less than $2 an hour. Suck it! Nothing you can do. You're screwed and the union will absolutely not help you due to their backroom deals. That's a good one that I particularly loved back at a major studio whose owner made over 100 million a year off our work. Nice Christian behavior Tyler.

    6. You take your paycheck to the bank and the bank absolutely refuses to cash it. In fact they tell you we will never cash a check from this account ever. And this of course is from companies run by former heads of Studios so presumably they had money. The cute alternative to this is when the bank makes you sit down and wait an hour for them to get various people on the phone to justify paying your paycheck even though on the back of the paycheck it says payable on demand guaranteed funds" by the payroll company.

    7. The accounting is too busy catching up on things and your invoices are at the bottom of a 3-foot stack. She's busy getting caught up before the holidays so you might not get your paycheck for another two months. Yeah that one seems like my problem not hers. We work for accountants not the other way around right?

    8. This what happens all the time: None of the producers have any idea whatsoever how you're going to get paid, who you give your invoice to, who the bank is, or where the paycheck will be sent. Meanwhile of course the producers are getting regular direct deposits. That's always a great motivator to work those late nights without being paid overtime.

    9. Try reporting any of these payroll violations to the EEOC or National Labor Relations Board and you get blacklisted! How illegally wonderful!

    10. Asking where your paycheck is on payday and having every person who should be in charge scratch their head and say they absolutely don't know where the paychecks are or why they're being delayed.

    11. Overtime or lack thereof. Enough said.

    You know kids, these are all illegal fraudulent payroll practices that affect Union and non-union Productions across the board in today's dying Hollywood. The best solution is to work in a different industry doing your same work that you love.

    From the 1980s to about 2008 employers didn't dare screw with your paychecks but after the economic crash we get less respect than migrant workers. Seriously look it up! The rates are going down down down the qualities going down down down experience levels going down down down and in the last dying days of Hollywood I would prefer cutting training videos for dentist extraction companies then working in mainstream Hollywood anymore.

    Meanwhile, in New Media, I can predict to the second when I'll be paid and how much I'll be paid, and my clients pay me electronically in minutes not weeks, and some of my clients even pay me ahead of time! So this number one rated editor is ever so happy to embrace the new world approaching that is replacing Hollywood.

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