Tag Archive for money

Bookstore closures to impact freelancers

February 19, 2011 Working One comment
bankrupt

Major bookstores Angus and Robertson and Borders, owned by REDgroup, are heading into receivership. There is significant impact not just to customers but the many freelance operators who write books and shoot images that are sold through these outlets. Although this offers challenges, there are great opportunities for freelancers as well.

While REDgroup accounted for about 20% of the Australian book market, as they added new stores, the independent bookstore business suffered. About 20% of this market closed as well, So, over a short time, the number of bookstores in Australia has collapsed by close to 40%.

An article by Richard Flanagan for the Fairfax papers summarises so of the problem:

In Australia, where 20,000 sales is a bestseller, the maths on 4 per cent [royalty] of an average UK-US price of $14 is sobering – $11,200 for two or three years’ work. That is, if you get published.

So, the economics of writing an publishing a book in Australia has always difficult. No one I know has managed to get rich writing and publishing books in Australia. But the collapse of REDgroup and the closure of so many independent stores has reduced the number of outlets for selling those books.

Freelancers need to review their business model. If you’re writing a book with the expectation of making real money then you need either re-evaluate your goal or re-evaluate your business model.

In case you’d missed it – the Interent is here to stay and there’s a huge opportunity. Self-publishing is now easier than ever and good operators that have learned about marketing and search engine optimisation have been able to publish their own books through Amazon, Apple and even the humble PDF.

There’s little doubt that the fall of REDgroup and independent booksellers will cause significant pain. However, this also represents an opportunity for enterprising freelancers.

What will you do about it?

Contracts – setting payment schedules

January 17, 2011 Business Tips, Getting Paid, Starting out 2 comments
Silver Greens

For freelancers, one of the most annoying parts of the job is getting clients to pay. A good way to reduce the pain so that everyone knows what they’re doing is to set the expectation of when payments are expected. Let’s start by looking at some of the payment options.

1. Pay on delivery

This one’s simple – you supply the work and at the point when you handover the complete task, the client has a certain period of time during which they’re expected to render payment.

2. Payment schedule

Again – there’s no rocket science here. You agree with your client a schedule – usually aligned with some delivery milestones. It’s important to let the client know that they don’t receive the next part of the work until they;ve paid for the previous one.

3. Payment based on some other event

In the publishing world, a common payment schedule is to pay when the work is published. In some publishing circles this is very common.

Which option is best?

The best option will depend on your cashflow, your ability to negotiate favourable terms with the client, the client’s desire to negotiate and the nature of the work.

Some tasks are better suited to particular payment terms than others. For example, if you’re writing a book you might ask for a portion of the payment to be paid upon signing the contract, with some milestone payments as particular drafts are delivered with the final amount paid when the project is completely delivered.

If you’re writing an article for a magazine, then a single payment is probably all that’s needed. Then, the only thing you need is an agreement on when the payment is to be made. Then you may be able to negotiate to be paid within x days of delivery or at some other agreed point in time.

What if you can’t negotiate?

Many freelancers feel that they aren’t in a position to negotiate. That’s never the case. Ultimately, if a client is looking to screw you down on the rate and payment terms then it’s OK to say that you can’t take that job, be polite about why you’re refusing the work and walk away. You might feel that you’re letting money slide through your fingers but there’s no point working if you’re not ging to be paid fairly and punctually.

You can always negotiate.

Some options for your contract

Ok, having considered some of the dimensions and issues of a payment schedule, let’s look at some typical words you might see in a contract.

These are words from contracts I’ve signed or used for guidance.

Disclaimer – Please note that I am not a lawyer. These are provided for information only. You should get independent legal advice before using any of this or signing legal documents.

Monthly or other regular payments

This form of words can be used when you do a piece of regular work. For example, you may work for a client who asks you to complete a set task each month.

Invoices will become due and payable in accordance with the terms, on receipt by the <client name> of :

(a)          time sheets authorised by the <client name>,

(b)          a valid invoice.

Payment terms to reflect <The Client> and <The client>  payment terms. Unless otherwise specified, invoices will be rendered on a monthly basis with payment due within <number of days> days of acceptance. Where applicable, each tax invoice will be accompanied by a time-sheet.

The payment period will be monthly in arrears, commencing from the Commencement Date of this agreement.

Payment will be by direct credit into a <your company name> nominated bank account.

For a milestone based-payment system, you’ll need to create a schedule that both parties agree to. Something like this might work.

The agreed works are to be delivered in agreement between <the client company> and <your company>. The payment terms shall be <agreed number of days from when services are delivered >days.

Delivery shall be in accordance with the agreed delivery schedule that has been provided by <your company> as part of the quotation for works. Delivery will be based on five stages with payment rendered at the delivery of each stage.

Stage 1 on <date> – 10% of total fee

Stage 2 on <date> - 15% of total fee

Stage 3 on <date> - 15% of total fee

Stage 4 on <date> - 30% of total fee

Stage 5 on <date> (completion) – 30% of total fee

Keeping it simple

If you prefer to keep things simple, it worth writing the payment terms into an email. For example you could write something like

Payment will be made within 30 days of receipt of the invoice

or

Payment will be made 14 days after publication of the work

While such an approach might seem a little crude, at the very least it sets an expectation and makes some kind of obligation on the client. Then you can put the payment date on your invoice. If there’s any dispute, you’ve got a paper trail to follow.

So, hopefully, that’s enough to get you started and thinking about how you might define payment terms.

Is there any other advice you can suggest about payment terms for freelance contracts? Let me know in the comments.

Getting paid – the freelancer’s challenge

December 24, 2010 Getting Paid, Guides, Starting out 2 comments
cash_rebates_2-238134852_std

Once the excitement of making the decision to freelance passes and you get your first paying work, you need to channel some energy into making sure you’re paid promptly. Now, you’d think that the world is a nice place where submitting a nicely presented invoice, with all the details correctly completed was enough. Sadly, it’s not. While you may have lots of good clients that pay promptly, every freelance writer has horror stories of clients who don’t like parting with their cash.

Here are a few guidelines on getting paid. All of these are things I learned by experience and through listening to those who walked before me.

Although you might be grateful that all your door-knocking, cold calling and emailing has resulted in someone offering you some work, you need to understand the terms of the business engagement. Make sure you

  • Know the pay-rate
  • Understand the payment cycle
  • Invoice accurately and track payments
  • Know who to call if there’s a problem
  • Communication
  • Escalation

The Pay Rate

It might sound silly, but I’ve taken jobs where I’ve known the editor but not the publication. If the publication is new, it’s possible that the editor isn;t really sure but makes comments like “I’ll look after you”. My advice is that you need to get the rate in writing before you start.

I’ve written some notes on how you might like to consider pay rates in this recent post.

The Payment Cycle

Every publication I work for is a little different to the others. If you work for an online publication, they might run a weekly, fortnightly or monthly pay cycle. Find out!

Others will only pay either once the magazine has hit the news-stands or some period after. One of the most annoying clients I had paid 30 days after the magazine went off the shelf. While I was working regularly, it meant that I was getting a monthly payment. However, it took three months for the first invoice to be paid.

Invoice accurately and track payments

A decent invoicing system will make it easy to send the correct information to your client so that there aren’t any excuses for not paying. If your budget is modest when you start out, you can create a nice invoice template using either spreadsheet or word processing software. You can also create a register of invoices and payments so that you can track outstanding debtors.

Who you gonna call?

It’s inevitable when you’re a freelancer that a payment is going to be missed or late. Rather than just sitting there, stewing on it, contact your editor and ask what’s going on. In many cases, the person commissioning the work is not the person paying the invoices. In fact, once they pass the invoice off to the accounts people they may not know any other art of the process.

Once, I worked for a large daily newspaper and they took six months to pay an invoice. It wasn’t for a huge amount but I deserved to be paid. It turns out that I needed to fill in some form for the accounts department so they could set me up in their system. Once I found that detail out I was paid promptly. The trick was to find out who is actually in charge of the payments. In large publishing companies it’s rarely the editor.

Communication

Incredibly, even though, as writers we’re in the communication business we seem to not like talking about money. Although I’m reiterating something I’ve said earlier, if you’re not being paid, make sure you call your commissioning editor and get on to the accounts department.

Escalation

If all else fails, it’s time to call in some help. Most countries with a free press have a trade union. I suggest that you strongly consider joining. It’s not cheap (in Australia, it costs several hundred dollars per year) but one service my union offers is debt collection from tardy payers. And, unlike commercial debt collection agencies, the union doesn’t charge extra for the service – it’s covered in my monthly dues.