Payment

Introduction | I: Presentation | II: Client Contact | III: Self-Promotion | IV: Estimating Fees | V: Estimating Expenses | VI: Coordination | VII: Execution | VIII: Expense Accountability | IX: Billing | X: Payment

This is the Tenth, and sadly for me, final article in a series of articles on the nine steps necessary to complete a successful freelance photography job. I have thoroughly appreciated the opportunity to dissect the workings of a freelance job and provide some small measure of relief for photographers as you grapple with running an art oriented business. In the first three articles we looked closely at how each one of us must give serious attention to defining our work, and from that select the clients that are right for each of us, and I suggested some ways to promote your work in a timely manner so you can keep your clientele aware of your growth as an artist. That was followed with four articles on the topics of estimating your fees, estimating your expenses, (that would normally have been one article titled “Estimating,” but the topic was too huge to be contained in one essay so I devoted two articles to the concepts behind developing an estimate), and then we worked at the process of coordinating a job, and some things to keep in mind while you are executing the job. All that was followed up with an article on keeping track of your expenses during a job, and some of the ins and outs of billing designed to help you get paid in a most efficient way.

Now we have come to the grand finale of a freelance photography job’s lifecycle which is, tada!, Payment. Actually, to be more accurate, in this discourse we are going to take up the issues of what happens if you don’t get paid, and once you do get the check, what happens to the money.

What if you don’t get paid?

As you will recall from the last article, Billing, there are ways to encourage the payment for your job that take a little time and dedication at the beginning of a job but are immensely helpful to completing the cycle. But what happens if you don’t get paid in a normal period of time and you are starting to get antsy about ever getting your compensation? Well, there are a lot of options and it is up to you to determine which would be best under your particular circumstances. I am going to outline a few options here and you may discover some on your own, but always keep in mind that however you choose to handle the situation you must always keep your reputation as a professional in mind. We work in a very small and concentrated industry and news travels fast about unpleasant suppliers, just as it does about unsavory clients. Always take the high ground, and always document your transactions.

Should you find yourself in the anxiety-provoking situation of not getting paid after a reasonable period of time (usually considered within thirty days after your client has received your invoice) then you have a number of remedies for payment.
These remedies include, but are not limited to, sending letters (ranging from benign inquiries to self-righteously indignant), going to small claims court, seeking legal counsel, going through arbitration, factoring, other unorthodox approaches, and writing off the whole situation as bad debt and a lesson learned the hard way. Let’s look at each of these choices.

You can call and send letters to find out what the problem is behind the late payment, and you are well advised to always document those calls and also make copies of those letters for your files, should you have to eventually go to litigation. Make sure you note in those calls and letters to whom the letter was directed, what your next step will be if payment is not forthcoming, and get proof where possible that the calls and letters were received. Writing emails is a good way to document these correspondences because they have a date and time stamp and they can be sent to a specific person as well as to other concerned individuals as cc’s (carbon copies). The first call should be investigatory (“I wanted to make sure your received my invoice and I need to know when I can expect to get paid.”), and they should get increasingly direct leading to advising that you may need to call in legal counsel to get this matter taken care of. I have known of photographers who, by merely mentioning that they are going to refer the matter to an attorney have gotten the client to pay up. And then there are those few clients who have little or no intention of paying so threats to retain an attorney will unfaze them similar to the way water rolls off a ducks back.

If you are not satisfied with your client’s response you may represent yourself and go to Small Claims Court. Each state has a different limit for filing in Small Claims so you must check your jurisdiction to find out what monetary limits you are dealing with. According to a recent Internet search I did for this article, in California you may take your client to court for a claim of up to $7,500.00, while in New York the limit is $5,000.00. The Internet site www.nolo.com notes that the following states have recently raised their small claims court limits: Mississippi to $3,500.00, Washington to $5,000.00, Louisiana to $5,000.00, and South Dakota to $12,000.00. Therefore it is extremely important for you to do your research to find out the legal limits in your state.

It may also be worth your while to find out if any photography trade organizations you belong to offer legal counsel. Many of the organizations provide some service as part of the their membership to give you access to low cost legal advice and may also put you in contact with attorneys who are specifically conversant with the profession of photography. In some cases you may also contact state or local pro-bono legal services, such as the Chicago based Lawyers for the Creative Arts, and the Los Angeles and San Francisco chapters of the California Lawyers for the Arts, which offer legal services specifically designed to address legal issues for creative entrepreneurs. Such pro-bono offerings may lead you to arbitration with a retired judge or commissioner to resolve your dilemma.

There are other ways to deal with not getting paid such as factoring (where a third party gets the payment from the client but you pay a very substantial fee for their services therefore significantly cutting into your income for the original job—obviously not a suggested way to go), and then there is just walking away from the whole mess and taking a total loss on the job, listing it as a bad debt on your income tax return and considering it a lesson learned with dire consequences. If you chose to handle it in this way, you will only do so once, because that is no way to run a business and you have more respect for yourself and your profession.

Then there are totally unconventional ways of getting paid. One that comes to mind only works if you are desperate and are willing to consider making a fool of yourself because the alternatives include not getting paid at all. Understand here that I don’t recommend this method but I feel compelled to write about it nevertheless. When I first started out, I heard an urban legend about a guy you could hire in New York if you had tried everything you could think of but were still getting the cold shoulder from your client when you called to find out about the money that was owed to you on a completed job. His name was allegedly Guido (not his real name) and he was, according to legend, a big, imposing sight of a man. You could hire Guido and he would go to the office of the recalcitrant client and sit in the lobby, making himself noticeably obvious (armed with sandwiches, and copies of your invoices in his dirty overcoat) and tell everyone that the reason he was there was that the client had not paid his bill. He didn’t harm anyone or threaten anyone but just the sight of him got the attention of client and it was determined that it was best to pay this fellow as soon as possible just to get him out of the building. I liked the story, true or not, and kept the image of Guido in my head.

Then one day years later, I received a call from a person who worked in an ad agency for whom we had just finished a good sized job and were awaiting payment. My friend inside the agency whispered into the phone that they had just learned the agency was going to file for bankruptcy in a few weeks and we should do everything we could to get paid as soon as possible or risk getting only pennies on the dollar. I looked at how much was due, I thought about the various remedies at my disposal in the short amount of time, and after due consideration, I decided to resurrect the spirit of Guido; it was going to be worth it even if I made a fool of myself!

After putting on my bulkiest clothes and overcoat, I placed three copies of the invoice in my pocket, a banana, an apple, and a sandwich in my other pockets and I proceeded to the agency. When I walked into the agency I announced in a loud voice so everyone could hear me that I was here because we hadn’t been paid for a completed job. It didn’t take long before someone came out from the back and tried to coerce me to leave the lobby and move to another room. When I went to the accounts payable office I was told that the check writing machine was broken and I would have to come back later in the day. I sat down and told them I’d wait and pulled out the banana. Some time passed and then I was told the machine had been fixed but the person who was authorized to sign the check was away. I pulled out my sandwich and told them I would wait till they returned. When the guy with the authorized signature arrived he told me they had lost the invoice and that is why we hadn’t been paid and I would have to resubmit the invoice. So I whipped out a copy of the invoice I had in my pocket and presented it to him. It took a few hours, but we got paid the full amount. The follow-up to the story was that a few weeks later they did indeed file for bankruptcy and their suppliers were paid (you guessed it) pennies on the dollar.

Now, I don’t suggest that you have to go the Guido route to get paid. That was a last resort for me, and I’ve never used that method again. What I do want to get across is that you are best served if you smooth out the whole process by taking the time at the beginning of each job to find out what you can do to expedite the process and to build good relations with your clients so you can not only get paid in an expeditious manner but you can clear the way to be called on again to do good work for them.

Payment

And then comes the day that the check arrives! Hooray! Here is proof with a dollar sign in front of it that you are valued for your work. But now you have to sit down, checkbook in hand, and write out the checks, a task you dread because with every check the balance decreases. Now it’s time to pay the piper. Hopefully you are not one of those who heavily celebrated when the job was awarded, and bought all kinds of goodies during the shoot in anticipation that there was going to be a big profit, and then celebrated beyond your means after the shoot, only to realize now that there’s not as much margin on this job as you thought.

Your Freelance Dollar

Let’s take a look at your freelance dollar. When I discuss this point in the Lifecycle of a Freelance Photography Job in my classes, I ask my students to each pull out a dollar bill. I then ask those who have the dollar (they are students after all) to look real hard at that dollar and appreciate its full meaning to the freelancer. That dollar represents a lot of hard work and it should be respected as a symbol of gratitude for a job well done, and an emblem of your accumulated education, skills, interests, talents, and hard work. This is no time to have fantasies about it; that dollar is the way our society has chosen to acknowledge your diligence and it has been given in exchange for your compliance with the parameters of the job and the vision you imparted to the job. Now it is your turn to responsibly distribute the funds that will ensure your relationship with your suppliers who have supported your efforts, and to pay the bills that keep you in business, to invest in your growth, and to secure your future. The example I give by dividing the dollar is anecdotal and not meant to imply strict percentages. Rather it is designed to demonstrate how funds are distributed and respect the allocation of those funds. Now it is time to appreciate the real “value” of the meaning of that freelance dollar.

Take that dollar bill and fold it in half so you see the right cheek of George Washington and part of his right eye (Freelance Dollar A). First, you must pay yourself and your suppliers. You pay yourself your fees first because, if you don’t, the money may initially get lost in the mix and you will end up wondering why you went through all this bother just to put money in other people’s pockets. There is a certain empowerment that comes with recognizing that your fees reflect your expertise and that the more proficient you become the possibility exists that you can gain more influence and eventually raise your fees commensurate with your standing in the marketplace. And you must pay your suppliers immediately so you can build your relationships with those whose support services you need in order for you to execute your job to the best of your ability. Paying your suppliers as soon as possible reinforces their trust in your abilities as a business person and they will be more willing to work with you once they know that you honor their work and pay them in a timely fashion.

Now turn that dollar bill over and fold the bottom half of that right side of the dollar so you can see most of Washington’s face and the “1” in the upper right hand corner (Freelance Dollar B). This section of the dollar bill represents the specific amounts you have to allocate to run your business on a daily basis. Those costs could include any personnel you employ (such as assistants, bookkeeper, and receptionist). It will also represent the money you have to spend to pay for rent, utilities, stationery and office supplies, office equipment, insurances, equipment, equipment repairs, advertising and self-promotion, legal assistance, educational expenses, auto expenses, business permits, dues and subscriptions. And don’t forget interest on business lines of credit, bank charges, loan paybacks, business entertainment and travel. There are a host of other costs to running a business, but these are just some of the obvious ones that have to be taken into consideration. This is a big chunk of your payment but little will get done to sustain your business unless you allocate funds to take care of business on a daily basis.

By turning over this portion of the dollar I then ask that we fold the remaining segment into three portions. The first of these three remaining parts (Freelance Dollar C) allows us to see Washington’s chin and the last four letters of his name. This section represents a portion of your profit. But remember that your profit is taxable income and a piece of that income (depending on your income tax bracket) must be set aside for you to pay your Federal and State (if applicable) Income Tax. As a self-employed person you are required to take out enough money to pay back the taxes on your income; you won’t have some company official automatically take out money from your check to cover your taxes. It is your responsibility. You may be required to pay in quarterly installments so you will have to take a portion out of your check, keep it in a savings or other account where it can be easily accessed, and you will have to pay Uncle Sam at the appropriate time. Remember that as you grow your business you will change tax brackets and the percentage you pay will go up accordingly. So be aware of the percentage you take out so you won’t come up short.

The second of the three remaining segments (Freelance Dollar D) can be considered personal income and right off the top you will use this money to pay for your personal expenses such as housing, utilities, food, clothing, transportation and loans. And of course there are insurances (medical, home, auto, life), medical expenses, property taxes, entertainment, travel, vacations, retirement accounts (IRA and SEP–IRA, etc.), investments, and on, and on.

The final, or third, segment (Freelance Dollar E) represents the most overlooked but very important and realistic subject of savings for temporary setbacks. As a freelance photographer you have no financial safety net built into your job. It is up to you to put aside money and it is commonly suggested that you have a reserve of at least six months to a year of savings to provide some peace of mind. You will experience some setbacks that could come about because of the loss of a major client, or an economic downturn, or possibly a personal loss. You have to protect yourself against the exigencies of life and one way to do that is to get used to the fact that you will have to regularly set aside some money, some portion of your freelance dollar, to help you get through those times.

What we have just gone through is an exercise designed to help you have a healthy respect for the money you gain as a photographer/entrepreneur. This exercise may have scared some as they realize how many entities there are in order to run a successful business. That’s just the reality of it. As a matter of fact there are many other factors that I didn’t even take into consideration in this exercise. Where is the payoff for all this hard work? The payoff is in the fact that if you are a wise money manager, a diligent distributor of your funds, you be able to get the most out of your freelance dollar. And the best thing that can come of that is that you will be earning an income and at the same time doing the thing that you enjoy the most, capturing images, manipulating them and influencing lives with your talent! There all kinds of surveys on the topic of job satisfaction but they generally reveal that over eighty percent of the working population work at jobs they do not enjoy. Consider yourself fortunate in that you are part of that other twenty (or fewer) percent that get up in the morning and actually look forward to going to work. You will actually be doing what you love to do, and no one can put a price on that!

Summary

It has been a distinct pleasure over the past ten months to have the opportunity to write this series of articles on the Lifecycle of a Freelance Photography Job. I have been honored that the good people of Photo.net, especially the insightful and supportive Hannah Thiem, Managing Editor, par excellence, have allowed me to pass along my thoughts on how you can be a more effective and efficient executor of your craft. I have tried to present an honest reflection of an occupation that has given so much to me. And I have to thank all the wonderful responses I have received to the articles and the encouragement I have been given. Recently I conducted a business of photography workshop at the Rocky Mountain School of Photography in Missoula, Montana, and I was amazed at the number of participants who had read my articles and found them useful. It is my hope that I will be able to continue to enlarge the topics included in these essays and compile them into a book that can be beneficial to all serious professional photographers. Your comments at the end of my articles encourage me to continue to conduct classes, lectures, and workshops where ever they are needed with the goal that we will make our profession more secure, empowering, and meaningful to the visually aware audiences we serve.

In the future, look for more Photo.net articles on the business issues that are unique to photographers, and tell your friends to read and respond.

And remember, stay in touch, and keep creating meaningful careers!

More

• Tony’s member page
• www.tonylunacreative.com
• Tony’s workshops and classes
• Photo.net Photography Business Forum

Lifecycle of a Freelance Photographer

• Introduction
• Part I: Presentation
• Part II: Client Contact
• Part III: Self-Promotion & Marketing
• Part IV: Estimating Fees
• Part V: Estimating Expenses
• Part VI: Coordination
• Part VII: Execution
• Part VIII: Expense Accountability
• Part IX: Billing

Other Articles by Tony Luna

• Rediscover your Passion for Photography: The Drive to Create
• Rediscover your Passion for Photography: Reclaim your Creative Passion

Tony Luna—the President of Tony Luna Creative Services, a Creative Consultancy founded in 1971, and Artist Representative/Executive Producer with Wolfe and Company Films. Mr. Luna has been an Instructor at the Art Center College of Design since 1985 where he teaches “Career Perspectives” in the Photography and Imaging department, and “Crafting a Meaningful Career” and “Living the Dream” in Art Center’s Public Programs. He is the author of, How to Grow as a Photographer: Reinventing Your Career (Allworth Press): an informational and inspirational guide to career evolution. Tony presented a lecture titled “Taking Your Career to the Next Level” at PDN PhotoPlus Expo in October 2008. He has helped well over a thousand artist-entrepreneurs begin, sustain and enhance their careers, and hundreds of companies to grow and prosper.

About the Photographer

Christine M. Caldwell was born and raised in St. Louis, Missouri. She relocated to California to attend Art Center College of Design in Pasadena California. Since graduating from Art Center in Photography + Imaging in 1995 she has worked continuously as a darkroom technician mastering the intricacies of both Color and B/W darkroom printing. As a commercial photographer for the past 13 years, she has combined her photographic talents with her lab expertise to successfully deliver images to a wide range of Publications and Ad Agencies. “ILLUMINATED NEGATIVES” are a collection of limited edition color photograms consisting mainly of leaves, flowers and insects. No camera, film, or computer is used in their creation. You can enjoy more wonderous work by Christine by going to her web site.