Payment In Advance from Large Corporations?

[Joe Ditzel]

When large corporations hire freelance copywriters, will they pay all or half upfront for a project? Or do they insist on being invoiced with 30 day terms or whatever? Or none of the above?

[TimRobinson]

I haven't dealt with many large corporations however it really comes down to your reputation and who they are. If you come recommended from someone high up in the company or have already proved your worth to them previously then half up front makes sense. If you're bidding for a contract with other copywriters and are chosen then you may have to invoice them at certain milestones in the project.

While doing freelance work previously with mid sized companies we used to bill 25% up front, 60% once the project is near completion (just needs final tweaks and changes until it's complete) and a final 15% once it's signed off. Most clients were fine with that.

[barry500]

Half up front shouldn't be a problem.....sometimes with large corporations although they are slower you do always tend to get paid. Any issues with payment tend to come from owner managers who feel like they have more skin in the game and every $ out is a $ they could take home...with smaller untried companies I am insistent on 50/50 split on services where we are down money ie wages or production costs. I'm less bothered about this with larger companies - they tend to take an age to get btheir payments sorted but the guy in finance who signs it off...well it isn't his money, so eventually they pay up.

For anything other than services - or where we have to pay something out before we collect - my world view is we need half.

[marciayudkin]

If you have a signed contract with a large solvent corporation not going through a merger or a bankruptcy, you will always get paid sooner or later.

I have had no trouble getting 50% up front and 50% upon satisfactory completion. However, unless the person hiring you has authority to pay via credit card, the large corporation's idea of "immediate payment" is extremely loose.

My most recent gig with a big company, I didn't get paid at all for 60 days after they were supposed to pay the first installment. But I did get everything I was owed.

Marcia Yudkin

[max5ty]

Since most of my work is with large companies, here are some quick tips I can offer.

The upfront fee varies - however, you should always be able to get at least 1/3 upfront. Since a lot of clients will become repeats, you will be able to work future arrangements out between the two of you.

Always, always, have a signed contract. This will protect you in many ways, as well as also being a good business practice. Since the person you may be dealing with probably has several layers of bosses above them, make sure the contract is signed by the appropriate department.

The contract should include things like:

- A description of the job
- When the work will be completed
- How the remainder of payments will be handled
- How late payments will be handled
- A description of what will and will not be included
- Who owns the work (you always own the copyright until you've received full payment)
- An agreement on how the client will share work samples and results (so you can use them in your promotions)
- If royalties, how much, when, etc.

These are just a few examples - basic copywriting things. You're attorney will give you more advice.

Also have invoices ready so that you can send requests for payment.

Another idea is that you can also offer a discount for early payments.

[TracyNeedham]

Well, that's good to hear to people are able to negotiate upfront with some larger companies. My largest client, a mutual fund company, flat out refuses to pay anything up front. They say they don't do that for any of their other copywriters and they're not going to start now. I had the same experience with an agency once--they'll only pay net 30 after completion. So, I'd been avoiding more bigger companies. Perhaps I'll rethink that though.

As for sooner or later always getting paid, it's true. Although I did just meet a guy who had an outstanding invoice with Coca-Cola for more than $100k for over a year. And that was just one month's work. Yikes! Personally, I wouldn't have waited til the end of the month to bill if I knew we were talking that much money. Because obviously, the bigger the invoice, the more sign-offs they need to get. LOL

[mccflo99]

Nearly every big company, in the Fortune 500 or higher, will tell you "we do net 30 or net 60, that's how we work." However, if they really want to work with you, they'll pay you everything upfront.

I don't touch projects without payment 100% upfront - 95% of the time, they agree, 5% of the time they wait a couple of weeks before coming back and agreeing. I have never lost a high-end client for demanding full payment up front, but again, this comes down to having stellar references, samples, and a name they've heard.

Chris Elliott

[max5ty]

Originally Posted by mccflo99

Nearly every big company, in the Fortune 500 or higher, will tell you "we do net 30 or net 60, that's how we work." However, if they really want to work with you, they'll pay you everything upfront.

I don't touch projects without payment 100% upfront - 95% of the time, they agree, 5% of the time they wait a couple of weeks before coming back and agreeing. I have never lost a high-end client for demanding full payment up front, but again, this comes down to having stellar references, samples, and a name they've heard.

Chris Elliott

That's great if you can do that all the time.

I've known copywriters who've done small fill-in jobs here and there for a few thousand bucks that get paid up front by corps. But for large jobs with royalties, etc. as far as I've ever known, there's always been a price split of some type.

All the big name copywriters I've known of, have all had some sort of price split.

[mccflo99]

Well now you've heard of one that doesn't have a price split Of course it took a decade of writing experience to get to this point but it's certainly doable, I do it. As for royalties, of course you can't get those up front, they're based on sales and performance.

Chris

[Jake Gray]

I am not a lawyer, but I'm pretty sure if it was a decently big company, you'd be under contract. Huge corporate companies often have lawyers that can scrap together a contract quickly for pretty much anything.

[marciayudkin]

Huge corporate companies often have lawyers that can scrap together a contract quickly for pretty much anything

Quickly? Not for a copywriting contract. No way in hell would they do that quickly.

Of course there's a contract involved. Part of the art of working for big companies is to try to convince them to use your contract instead of theirs. Some will, some won't.

I once worked for one of the largest toy companies in the world, and when they had a 12-page contract where signatures were on the last page, my scanner put each page in a separate file. They would not accept it when I emailed back scans of the first 11 pages and then 4 scans of the last page, each one signed by me or my three subcontractors. No, I had to email back four complete sets of all 12 pages! (Then pop all 48 pages in the mail to them.)

All the paperwork for the toy company took three weeks to complete. No big company that I've ever heard of does this quickly if they have their own procedure rather than accepting the copywriter's contract or letter of agreement.

Marcia Yudkin