Wednesday’s show topics covered the commissioned work process and how to deal with non-payment issues. The Listener Appreciation Drawing was introduced and explained how listeners have an opportunity to win an 11”h x 14” w matted print of Sunset: Oregon Coast just by listening to Outside the Frame each week and writing down the “Tip of the Day”. At the end of the month, send that month’s tips to me in an email and be entered in the drawing to win the print. Each month will be a new set of tips and a new print. See my blog for full details: http://paintnpen.blogspot.com/
A commissioned work can come from anywhere even through the normal course of the day such a trip to the bank or a stint on jury duty, therefore, you must utilize you marketing materials – you should at the very least carry business cards with you at all times; I also carry a tri-fold brochure in my purse.
At the heart of every commissioned project is the Commission Agreement that spells out everything from the contact information, project type and number of works, project timeline to the details of the cost for the project and a payment schedule reflecting each stage of the project as detailed in the timeline. The Commission Agreement provides clauses that cover you in the event the client denies payment for any reason. You can avoid most non-payment issues by insisting upon a signed agreement before you begin the project. Key clauses include the Cancellation/Kill or Rejection Clause with a Delivery Sub-clause; Loss, Damage or Distortion Clause; Ownership Clause; Default in Payment Clause; Dispute Resolution/Arbitration Clause and an Acceptance of Terms Clause.
The “Chain of Collection” is a series of steps one takes in order to obtain payment from a client for goods or services rendered. It should be utilized for two reasons: 1.) It provides you with written proof of what is owed in order to pursue arbitration or litigation; and 2.) It keeps you from being accused of harassment that is a violation of the Federal Fair Debt Collections Practices Law. First link in the chain is the Agreement/Contract, the second link in the chain is the dated Invoice (you need two copies) with a specified time for payment – typically within 30 to 60 days. The final link in the chain is the shipping receipt or the Signed Delivery Receipt (make sure you keep a copy of either).
You utilize the chain by sending a Follow-up Invoice when payment has not been received after the initial invoice. Ten days after the Follow-up Invoice, you call the client to remind them of the amount owed and the dated invoice. If another 10 days pass, you send a Second Notice Letter/Second Notice Invoice. After another 10 days, you send a Final Notice Letter/Third Notice Invoice. If you still do not receive payment, you send a Demand Letter/Final Notice Invoice. Make sure to make copies of all these documents to keep for you records.
There may be legitimate reasons for non-payment such as bankruptcy, buyer’s error or artist’s error. Buyer’s and Artist’s error can be avoided with the use of a good initial Agreement or Contract. Well-negotiated agreements usually foresee areas of possible dispute and specify the obligations of the buyer and the rights of the artist. It also protects you from having your art sold as part of the client’s assets being liquidated to pay off their creditors in the event that your client goes bankrupt.
There are several avenues for collection available to artists faced with non-payment. You can use an Arbitrator or Mediator who is an impartial outsider used to bring about resolution. This is a speedier and less-expensive resolution than suing in court. A mediator acts as an umpire to bring both parties to an equitable agreement but cannot impose a decision upon them. An arbitrator acts as a judge and can make a legally binding decision. Contact the American Arbitration Association’s Alternative Dispute Resolution (ADR) online at http://www.adr.org/ .
Another option is to turn the matter over to a collection agency. Their fees range for 10 to 50% of the monies recovered, often depending upon the amount of money involved and the time lapsed since the work was invoiced. Your final option is litigation which will take place either in Small Claims Court or Civil Court depending upon the amount due and whether that amount falls within your state’s dollar limit set for what it considers a small claim. You can handle you own case in SCC but need a lawyer to bring Civil action against the client.
Above all, adopt good record-keeping habits and policies. Get everything in writing and keep a copy of it. Put everything in writing and keep a copy of it. As the saying goes, “an ounce of prevention is worth a pound of cure”. Good business habits on the outset will promote good business health. Samples will be on my website:
http://dedesorensen.googlepages.com/bhrshowworksheets
Be sure to tune in next Wednesday, May 13 at 1PM for Outside the Frame for the show about Mailing Lists and learn why you need them, as well as, how to build, maintain and utilize your mailing list to its fullest.
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