Business Trends
Getting Your Money

With this column, we will review three stages for getting the money for your photography services. We'll look at how to use an industry standard contract with terms and conditions of payment, discuss making agreements with the client as to the payment terms and end up with client invoicing, payments, and credit card merchant accounts.

Industry Standards
It's a good idea to use the payment standards and the industry standard contract forms for your specific area of photography. You can get these forms and information from photo business books, professional photo organizations, and networking with other professionals. There are basically two areas for contracts and terms: consumer and commercial.

Consumer (wedding and portrait) photographers customarily package their services at various levels of pricing depending on such variables as proof, prints, and albums. A 50 percent non-refundable deposit seems to be the standard, along with a contract that specifies a schedule of payments that concludes with the balance of payment due upon delivery. There is usually no copyright issue as the consumer is buying real property (prints and albums) and not intellectual property (copyright usage).

Commercial photographers would like to get paid upon delivery but are often required to invoice their clients based upon an estimate confirmation. Both the estimate confirmation and invoice are standard forms. Also, it is always a good idea to have the client you will be billing complete a standard credit application (available at any good office supply store). This is not as much to check their credit (though it would be a good idea), as it is to have all the business and legal information on hand should any legal action be needed to collect your money. Yes, it may sound presumptuous to anticipate you won't be paid, but the worst time to try and get this information is once legal proceedings begin!

In the case of commercial photography, the client is paying for specified rights to copy your images (your intellectual property). One of the most important industry standard terms is the relationship between payment and transfer of rights. Your estimate and invoices should state (along with all the other standard terms) language similar to the following three important conditions:

1. Permission for use granted upon receipt of full payment of final invoice. Payment due net receipt of final invoice. Industry standard of 2 percent per month service charge will be charged on all overdue balances unpaid after 30 days of receipt. Adjustments of amount or terms must be requested within 10 days of receipt. All expense estimates subject to normal trade variance of 10 percent.

2. The client shall assume responsibility for all collection of legal fees made necessary by default in payment.

3. The fees and expenses shown are estimates only. Actual fees and expenses shall be billed with client's approval obtained for any increases in fees or expenses that exceed the original estimate by 10 percent or more.

Getting An Agreement
Make sure the client has agreed to all payment terms and conditions. If you must negotiate, do it before work begins. Spell out all of the details of the project. Both consumer and commercial photo shoots have a very high potential for client changes. When specific project and payment terms are confirmed in a signed agreement, you have more leverage to use an "estimate amendment form" when the client makes these changes.

For a reference guide to industry standard forms, check out Business and Legal Forms for Photographers by Tad Crawford (Allworth Press Publications). This collection of essential forms includes an estimate form; confirmation of assignment; invoice; agency contract; collaboration agreement; privacy release; property release; permission form; lecture agreement; contracts for weddings and portraits; contracts for sales through a gallery; licensing agreements; stock photography contracts; transfers of copyrights; and more. A CD-ROM with electronic versions of each form is provided. Also, check out Pricing Photography 2nd Edition by Michal Heron and David MacTavish (Allworth Press Publications). This excellent guide walks you through pricing and negotiating basics and a survey of both stock and commercial assignment usage pricing.

Getting Paid
Be sure to invoice the client in a timely manner or have the invoice ready if the photography is to be paid upon delivery. Again, use the industry standard forms. The most basic payment terms are:

  • C.O.D. (Cash On delivery) is standard in wedding and portrait photography and whenever you can get it in commercial photography.
  • Net receipt (due upon receipt of invoice). This standard wording usually will get you paid by commercial clients within 30 days.
  • Net 30 (due in 30 days) is no longer commonly used by photographers for two reasons. One, usage transfers upon payment in full and technically the client must pay their invoice to use the photos. Two, many companies seem to feel that "Net 30" really means wait 30 days then start thinking about paying you!

Credit card merchant accounts are popular for wedding/portrait and fine art photography where the client is a consumer accustomed to bringing out their credit card to pay. Before you sign up for a merchant account, check on the following conditions:

  • You can start with your own bank, but many big banks are not fond of opening credit card merchant accounts for small home-based businesses. Shop around with this check list. Talk to other photographers, your professional photo association, and your credit union. Even wholesale merchant companies such as Costco are now offering merchant credit card processing for their business members.
  • Be sure the company can deposit funds into your existing business checking account.
  • When getting costs, give an accurate estimate of your expected monthly credit card sales. Many firms have processing limits.
  • Determine in advance how you will use the credit card merchant account for deposits and sales--in person, by mail, by phone, online?
  • Determine the equipment you will need to buy or lease. Will you need an electronic terminal and a printer? Will you need online processing? Can you use your computer instead of an electronic terminal to process credit card orders?
  • What is the application fee? How much extra is it to apply for American Express merchant status as well as for the usual MasterCard and Visa?
  • How much is the monthly statement fee?
  • How much are the discount points? Discount points are the percentage of each credit card transaction that the processing firm charges for handling.
  • Ask how long it takes for funds processed by credit card to be deposited in your business checking account.
  • Ask the processing firm about their chargeback policy (the client wants their money back and used their credit card to pay).

This column is written for you. We appreciate your feedback and questions. One of our readers, Richard Duncan, proposed this topic. Thank you, Richard, for this suggestion--a most basic business topic!