‘You’ll Get Paid, When We Get Paid’ – 5 Ways To Avoid This Trap

October 5, 2016

Have you ever had a client say that won't pay you until they're paid by their client? Learn 5 techniques for avoiding this issue

Your Client’s Cash Flow Is Not Your Problem

Does this sound familiar?

‘Yes, we received your invoice and we’re sorry that we’re late on payment, we’re just waiting for our client to pay us before we can pay you,’

Unless you are brand new to the production/post industry or have just been incredibly lucky, you’ve undoubtedly heard this phrase or a similar one, dozens of times.

Over the course of my career, I’d say this is the number one reason clients site for lengthy delays on payment.

Over the past few months, at industry events or just grabbing some beers with local colleagues, I’ve been hearing about this kind of thing happening more and more – and it’s extremely frustrating.

Of course, it’s frustrating to the person it’s happening to, but I think it’s also something our industry on a whole should be frustrated with and work to avoid.

I’ve been thinking about the issue of clients not paying until they’ve been paid by their client all summer and as I’m prone to do, in this Insight I’d like to present 5 ways to mitigate or hopefully avoid this situation altogether.

Terms Are The Root Of The Problem – The Credit Card Effect

As Patrick and I have both written about, one of the problems with our industry is that extending terms to clients is standard practice.

Patrick’s default position is to just not offer terms and get paid prior to releasing any materials.

I understand that thinking, but I’ve also advocated many middle approaches including doing credit checks on clients (not has hard as it sounds).

With that said, the underlying reason that clients think that they can take the ‘not until I’m paid’ stance are terms are seemingly everyone in our industry provides.

Terms provide a pad, and to a large degree, freedom for the client to not feel stressed about being timely with their payment.  Or said slightly different, delays the immediacy of payment.

This issue is societal – not just for us lucky postproduction practitioners!

Really craving that amazing new piece of gear?  Don’t have the cash on hand or in your bank account?  No problem! Put it on a credit card and pay later – you’ll probably have the cash at some point in the future, right?

I like to call this phenomenon the credit card effect. We’re conditioned that if we don’t have the cash to pay for something we can ‘delay’ payment by putting whatever product/service we want on a credit card and pay later.

Of course there are those that use this ability to their advantage and do so responsibly, but of course, there are those that don’t.

Understanding the credit card effect psychology is a key way to avoid the client paying you only when they’ve been paid trap.

#1 Always The Agreement!

I get it, I sound like a broken record in many of these business articles, but its seems to me that many payment issues could be headed off at the pass with a proper agreement with a client.




Specifically when it comes to the issue of a client not paying you until they’ve been paid, call out that excuse as not acceptable in your agreement with the client.

Here is that section from the client services agreement for my company:

‘Client agrees that they are bound to payment of services as described in section 4F, and payment shall not be delayed, interrupted or excused based on the availability of funds from client or based on the availability of funds to the client from a third party’

This clause basically says that the client can not use the lack of funds or payment to them by a 3rd party as an excuse for not paying their invoice!

By the way, section 4F in our agreement is where we spell out acceptable forms of payment, how interest accrues with late payments, etc – all of which I’ve written about previously (see my comment in an article from Pat).

The point is: don’t allow lack of funds either on hand by the client or via payment to them via a 3rd party be an excuse for not paying you.

Of course, unless you’re ready to enforce this part of the agreement there is only so much you can do, but reminding a client that they’re bound to an agreement and that they agreed to this clause (or however you want to put it) often avoids delay on payment especially if your agreement also clearly spells out the steps you’ll take to recover monies owed to you.

#2 Start Taking Credit Cards Now!

I used to think of taking a credit card as last ditch method to get payment from a client.

These days, I’m much more proactive about advocating their use to my clients.

Why?  The Credit Card Effect I mentioned earlier.




This summer I dug deep into my accounting software and found a couple very interesting pieces of data for the past few years:

  • In 2014, 84% of our jobs that were late paying (greater than 30 days) were for jobs in the $4000-$6000 range. While I technically had the ability to accept credit cards at this time I did not.
  • Of that 84%, the average payment was made 51 days after sending an invoice.
  • In 2015, we had a similar late rate (76%) again also occurring in the 4k-6k range but at 35 days after sending the invoice, I sent another email to the client offering the option of a credit card payment. As a result, my average payment time fell to 38 days!
  • In 2016, I started to accept credit card payments on all projects and offered it as a payment option when initially sending the invoice (I still take checks of course)  In the 4k-6k budget range the late rate so far for the year has fallen to 7% and average payment date in this project range has also fallen to 22 days!

So what did I learn?

The 4k-6k project budget has over the past few years been, by far, the biggest perpetrator of late payments – doing further analysis, this sort of makes sense as most of the projects we do in this range are indie docs & shorts – projects that are always tight on budget and cash.

Next, I learned that by accepting a credit card payment when the invoice had gone ‘late’ I was able to dramatically cut my average receive date by almost 2 weeks!

Finally, and most shockingly, I learned that by initially offering the ability to accept a credit card for payment I have so far (and almost unbelievably) been able to cut late payments for this budget range by 69% and been able to cut my average payment date for this budget range to a mere 22 days!

I suppose it’s always possible that I’m just working with more reliable clients, but I think the numbers speak for themselves.

With a plethora of online options including services like Stripe, Square, PayPal, Intuit Payments and others you really have no excuse not to accept credit card payments.

All of these solutions have mobile processing too – so if you’re a freelancer swipe a card before you leave!

Even better, many accounting solutions have the ability to automate payments – for example when I send an invoice via QuickBooks (my accounting software of choice) all of the details of how a client can pay via credit card are in the email (as well as ACH transfer or check).

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Homepage Forums ‘You’ll Get Paid, When We Get Paid’ – 5 Ways To Avoid This Trap

  • Diego Borghello

    Why are you delivering before final payment? If you did your job and met the deadline, isn’t it your client’s responsibility to come up with a from of payment before that deadline as well? And if they don’t have the money they can finance with their credit cards, but not on you. I found that the stress and work that takes to get paid after delivery is not worth the job sometimes.

  • RobbieCarman

    Hi Diego –

    Well that’s part of the discussion over several articles that we’ve been having.

    Here Pat makes the stance that you’re taking: https://mixinglight.com/portfolio/why-you-should-avoid-net-30-billing-terms/

    Then he followed this up with an alternative approach: https://mixinglight.com/portfolio/getting-paid-more-reliably-as-a-creative-professional-with-milestone-payments/

    I furthered this conversation https://mixinglight.com/portfolio/chasing-down-money-6-strategies-for-overdue-payments/

    And there have been dozens of comments in those articles.

    In general, my market simply doesn’t work that way. One can try your/pat’s tact, but one shouldn’t expect work. It’s frustrating and sad but when working with a huge group like Discovery, National Geographic, Smithsonian, MTV etc its just the way it works.

    If you can make a living doing it the way you suggest then I 10000000% support that!

    Really, terms are the problem – as I said at the top of this article and Pat & I have reiterated several times.

    My stance has been one of managing terms – from contractual clauses, charging interest, credit checks on clients etc.

    I’d really urge you to check out the previous articles I’ve linked to as well as check out the comments – lots of good stuff there.

    To be clear, your tact is spot on, and one that I strive for but its not (usually) possible – at least in my market.

  • Diego Borghello

    I understand, I missed the other ones. Thanks for the great article and advice!

  • R.NeilHaugen

    This is exactly the same issue that say editorial/commercial still photographers have had for flipping ever. An example type, is shoot a job for a major ad agency for X Bigshot Company to appear in Major Ad Campaign. Months later, still getting “We’ve not been paid for that job yet.” from the agency … talk with someone from the company that ordered the ad, they paid the ad agency the day it was delivered. Ad agency is “floating” money from the photogs they use for months at a time. And yea, don’t like it? Go work with another agency.

    So it’s always back to how well one is at getting around the “We use small fry for temp banking and they’d better like it!” via various strategies. And when you choose to walk, or … put up with it as maybe probably eventually you’ll get paid. Sucks. Rude, NOT ethical, and always … difficult.

  • Remco Hekker

    Hi Robbie, interesting thoughts!

    Also, thank you for being so open with your accounting figures and prices!
    It really adds a lot of clatity and realism to the article.

    I definitely see the pitfalls from using terms, but like you said, they are such a big part of the payment culture. Especially (here in the Netherlands) where credit cards are not a standard payment method.

    So far, I’ve navigated around late payments by being highly selective in my clients. I’ve flatly refused to work again with clients who’ve been withholding payments for 100 days, and didn’t return any of my phone calls.
    Now, I have a nice group of clients that will pretty much allways pay within 7-14 days.

    I really like the idea about offering discounts on early payments.
    Maybe setting up a portal in my website where clients can pay their invoice the way they want to. (debit, credit, PayPal)
    And offer them a discount coupon that will expire after X days.

  • Fabulous and time-tested tips that I resonate well with and share. Recently began taking cards and am going to add verbiage to my contract that requires a CC to float terms and at such time the check for said terms doesn’t arrive, the card (and a service fee) will be charged in-lieu.

    I think I will also follow Robbie’s tact of offering discounts for payment up front. I normally will if asked, but want to add it to the tick box going in front of clients for approval. Cash talks.

    The battles are big enough: capital expense, facility recurring costs, paying staff people, marketing, SOW/Bid to get the gig, man hours to do it, be damned if I’m gonna play credit-card/banker on the back end. Has a multi-BILLION dollar company hold out on near $20K several years ago. They were agasp when I fired them, stating that “I’m not a bank.”.

  • Got a time sensitive question: so I work these low budget jobs once a month for a recurring internet show. I believe another (intern/editor) colors it when I’m unavailable. But the company is a giant corporation. They have a net30 policy. But that often becomes 45 days. The amount per episode small money but I take it since it’s recurring and I remember Dan Moran saying, if I don’t take it, some yo-yo will, etc. How can I convince them to pay upon delivery or no later than 2 weeks? It only takes me 6 hours to complete each episode… I’ve got another one coming soon. Please help.


  • Patrick Inhofer

    Do you send electronic invoices that accept credit card payments? That’s often a great way to get paid quicker if the amount is small enough that the producer can just expense it on their corporate card. Yes, you’ll pay a little in extra fees – but that’s way better than hunting money for 45 days.

  • That job I was asking about I actually got them to pay via venmo, and they paid b4 I began the job, in full! So, a great win on that one!

  • Patrick Inhofer

    It’s awesome when that happens, isn’t it? Congrats!

    It just so happens I now have a few Fortune 500 companies that pay me on terms. Once I got into their system, their payment cycles are like clockwork – totally reliable. But for non-Fortune 500 companies? I still do 50% upfront, 50% on delivery (and sleep much better at night for it).

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