Slow Paying Corporate Client

Post topics about the business side of magic.

Postby Rick Schulz » 09/22/03 10:37 AM

Does anyone have advice on the best way to handle a slow paying (30+ days) corporate client? I knew going into the gig that they would be mailing my check to me after their Accts Payabl dept. handled all of the paperwork. Is 30+ days too long? :confused: :help:

Thanks in advance for your help!

Rick
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Postby Pete Biro » 09/22/03 11:37 AM

Sometimes when you are starting new with a client it takes 30-90 days for some to get payments out. Once established it usually runs in the 30+ cycle. Lots depends on all PO's, etc. being in on time and in a cycle.

If it is a legit company you should be OK. If you don't think you will EVER work for them again, make a fuss.

I remember a NY outfit I worked for would need an EXACT estimage of all costs, travel, etc. and the buyer said "You can wait til the job is done, then you will know the exact amount and send the estimate."

Once they got your estimate, then they would issue a Purchase Order (which took 3-4- weeks). Then you could bill it, which again took 3-4 weeks.

It is just their way of earning interest on your money. But, I worked for them for years without any compaints from their end, so it was worth it.
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Postby Pete Biro » 09/22/03 11:39 AM

Oh, and another client was using me a lot, and they finally issued me a PO good for a year with a budget set (which was more than enough) so I never had to wait on them.

However, their "free spending" has caused their stock to go from 80 down to 12 bucks a share and I (and others I knew about) don't get anymore jobs from them.
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Postby Bob L » 09/22/03 12:28 PM

I don't have anything new to add to Pete's post, except to confirm his experience with my own. I do technology consulting as a freelancer and it is commonplace to have a 30-60 day delay in payment.

And, as Pete mentioned, when they are first setting you up in their accounting system, it can take even longer because they have the bookkeeping to complete, as well as a likely round of approvals back to your contact person to verify the invoice.

In short, while it can be agonizing waiting for that much-wanted check to arrive, I don't think you need to feel anxiety over non-payment at this point.
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Postby Wolfgang » 09/22/03 12:28 PM

This is a problem basically everybody running a business faces. It is sometimes a very timeconsuming process to get money out of a big coporation if you are just a small vendor. My company "in real life" works for a lot of Las Vegas casinos and getting money out of some of them takes time.
:whack:
On the slow paying big corporations that usually have 30 days net terms with us I will call accounts payable about 5 days after the invoice was due. I will ask them if they have the invoice in the system and if the submitted paperwork was sufficient or if they need any additional documentation . Usually they will tell you that they are waiting for the responsible person to sign off on the invoice. In your case that might be the head of the PR department or else, in my case it is usually the casino manager. So the next step is to call the person in charge, engage him/her in a little smalltalk and just mention the fact that we have not been paid yet towards the end of the conversation. I will not let them know that I spoke to accounts payable because I do not want them to think it is their fault, I usually ask them to put a little preasure on accounts payable to help me out. Its just a way of letting them keep their face.
Usually I get paid about 14 days after that and that works out fine. If I do not get paid after 14 days then I send a written statement telling them they are late and ask to get paid.
I do not think that making a big Fuss (like Pete put it) is getting you paid faster, it usually upsets the people in charge for your payment and they will find lots of ways to delay it. Another point is that since I am not a psychic I have no idea if I work for the same customer again in the future.
IMO the big corporations will pay you but it takes more time than talking to the guy next door, you will have to calculate in your pricing.
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Postby Guest » 09/22/03 05:30 PM

Some companies take months, most do not. My corporation is considered a quick payer and I know that our company that we use to pay invoices often takes up to 60 days. They shouldn't (I expect less than 30) but for some reason they do. One reason many consultants don't make it is because it takes too long to get paid.
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Postby Dave Egleston » 09/23/03 12:33 AM

I work for one of the major hospital conglomerates in California and the first time someone bills us - Our 40 MILLION dollar software program considers a 60 day pay very fast - Whereas our outdated patched together system routinely paid within two weeks of receipt.

I find it helpful if you know someone that works within the corporation and appeal to him/her - they can usually kick start the AP dept.

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Postby Guest » 09/23/03 10:59 AM

We always have the "time payment is due" aggreed upon before hand and written into our contracts. We usually allow for up to sixty days but seem to be paid sooner most of the time. I do not remember a 90 day for a very long time although did have one of my old Corporate clients do that which was great when working in October and November for them as we got money in January and February which was always a slow time for us and so kept food on the table.

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Postby Pete Biro » 09/23/03 11:44 AM

I recall seing bills that offered a small discount, like 2 or 4% if paid by a certain date.

My new SBC Phone bill shows two amounts, the real amount due and in large type the amount I have to pay if late...
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Postby Guest » 09/23/03 12:07 PM

What's worked for me has already been posted
A fee for payment on date of service. A slightly higher fee for payment with 10 days. And a higher fee for payment after 30 days. The only difference
is my contract includes the client paying all collection costs
from
Ford
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Postby Timothy Hyde » 09/23/03 09:00 PM

Get a 50% deposit upfront.

A bit more paperwork for you
but it does smooth out the cashflow.

This also sets into action the chain of events
that are needed to get you into the accounting
system before you do the job.

Then when you send the invoice for the balance
you are not spending further time chasing up the money.
You can focus on getting testimonials, adding extra services , building the relationship etc.

Timothy Hyde


MagicCoach - Grow your Magic Business with this Free Newsletter
The Secret Notebooks of Mr Hyde - Vol 1 & 2 - http://www.MagicCoach.com
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Postby Guest » 09/24/03 01:38 PM

I must confess that this thread baffles me. I have been doing corporate shows for some years now including trade shows all over North America.

I utterly refuse to be put in the corporate "system". Once you are there you can never get out again.

I simply insist in my contract that I am paid on the day of the show. No ifs or buts. That is the deal.

Even at trade shows I insist in my letter of agreement (I don't use contracts as such) which they sign that I require payment at the show.

I have never, never even had a question about this. The money has always been there. On the rare occasion that it hasn't I get great apologies from the client and the cheque arrives in the mail or more usually by courier a few days later.

I am often used by the same companies over and over. Big companies too.

I think the problem is one that performers have created themselves. By not allowing themselves to get into the system in the first place they won't be.

If attempts are made by companies to get me into the system (this has only happened on about 3 occasions) I always refuse and tell them politely that I do not want to be hanging around for my money for a month or more.

There never has been a problem. I would suggest the posters here gird up their loins, look the booker in the eye, and state plainly that you want your money at the show.

I have NEVER lost a booking or had a refusal over this.

Never.
Over many, many years too.
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Postby Guest » 09/24/03 03:11 PM

Angelec, is your Svengali presentation done at trade shows or do you have a special show?
Steve V
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Postby Guest » 09/24/03 03:54 PM

Steve surprises me by his psychic ability.

I do use a svengali deck at trade shows. I am not sure how he knows.

Perhaps he is confusing me with another gentleman from Florida (I believe) who not only uses the deck at trade shows but gives it away as a premium. Or so I have been told.

Anyway, the answer to Steve is yes. To both questions. I have a specific show and never change it. That way I can concentrate on gathering a crowd, get them laughing and gasping as I am sure we all try to do,and most importantly of all do my utmost to promote the product itself and get leads for the company.

I use ordinary cards for this but after about 5 minutes of this I say "so far you have been seeing magic with an ordinary deck of cards. Now I will show you something with a trick deck that you can actually buy from a magic shop"
Then I do the svengali deck which takes around 5 minutes or so.
It is an ideal trick for me at trade shows since my routine has been designed specifically to draw and hold a crowd. It is fast moving with great visual impact and from long experience with it I can manipulate the crowd very easily. It also has
a built in suitability for product customization.

With regard to the original topic about payment I suspect a lot of the magicians who do trade shows come from a corporate background. That is why they have the corporate mindset and have bought into the idea that there is no other ways that companies will pay except the "system"

I do not come from a corporate background. I come from a "money up front" background. Again, if you set this as a precedent from the very beginning you will NEVER have to wait for payment.
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Postby Guest » 10/02/03 06:21 PM

I remember Mike Roger's saying you have to have a large credit card limit to do trade shows and corporate work. Personally, I hate letting the Client know that I need the money!
I sometimes ask my client "What is the policy for them". How would they handle billing if they were me? 30 to 60 days is not uncommon for payment.
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Postby Guest » 10/13/03 02:23 PM

I guess I'm not the only one who finds this thread odd. I've been doing trade shows since 1980 and have always been on a "payment due on arrival at show" basis.

And my clients are some of the largets corporations in the world - Siemans, Akzo-Nobel, Amoco Oil (now BP), McDonald's, Kraft Foods, you get the idea.

I just write it into the contract and make sure that they have read it and signed off on it before I go.

I also make sure that they cover hotel and travel up front as well. Word to the wise on that. It saves beau coup bucks and hassles!

Lee Darrow, C.Ht.
http://www.leedarrow.com
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Postby Guest » 10/14/03 05:02 AM

Gotta go with Lee Darrow and Mark -- oops! -- angelic:

When doing corporate work, I get paid at the end of the gig. Period. No exceptions. It's all spelled out when the job is confirmed and in multi years I have never had a problem nor have any of my clients.
cheers,
Peter Marucci
showtimecol@aol.com
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Postby TheDean. » 10/21/03 03:54 PM

Ditto...

In 30 years I have NEVER been, as some put it, placed into the 'system'.

I have ALWAYS received my money, at the very latest, at the time of the show.

Apparently its a mindset kind of thing.

I know that some of you will disagree, but THAT is part of that mindset. I too have been blessed to have been able to work ALL-OVER the world and for MANY including the most difficult for this consideration; 'governments & agencies', and when it's CLEAR (appropriately and professionally) that this IS just the way it IS...

Like we said, it's a MINDSET.

We already know some won't understand or agree because they've 'had an experience' where they wouldn't pay... there goes that mindset again.

Funny, in the BUSINESS of professional entertaining (as well as most other business) that "mindset" is often the most 'interesting' thing to GET and UNDERSTAND, but I guess that too is a mindset. (Hehehehehe!)

Nicely done all!

I am at your service and in His service,
Dean

THINK and Grow Rich!
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Postby Guest » 10/22/03 08:16 AM

What they said.

Payment due immediately following performance, hotel direct-billed to company, travel arranged through company's travel office.

Ted
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Postby Bill Mullins » 10/22/03 11:19 AM

Originally posted by Dean Hankey:
including the most difficult for this consideration; 'governments & agencies',
I work for the federal government (U.S. Army). The only way I have to purchase something like a service and pay immediately is either get a company already working for us to hire the magician as a subcontractor, or to pay for it with our office credit card. (Theoretically, we could write a contract directly with the magician, but it gets paid in arrears.)

How many magicians accept credit cards for fees?
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