AN ASIDE
- Throughout the Business of Graphic Design course, we will discuss many aspects of the designer/client relationship. The most important factors are openness and honesty. Surprises should be avoided at all cost. If something goes wrong, or you have made a mistake, be open with the client. More often than not, you can work together to make things right again.
I will distribute photocopies of template documents which will help you track time and expenses. You can create your own based on these.
Download this PDF file depicting the paper flow in a design studio.
Time Tracking & Billing
You should open a uniquely coded folder for each project you undertake. All records to and from the client should be kept in this folder. It should also include all time sheets, expense records and meeting notes. These are the records you will use to calculate how much the client owes you.
Time Tracking
Some projects may be priced by the hour and some on a flat rate. Either way, you need to keep track of the time spent on the project.Time is the most important variable and the key to profitability in a graphic design studio. You do not only keep track of the time in order to calculate how much you will bill the client. It is also a deciding factor in how much you pay your designers.
Time is not, however, the only variable in establishing the value of a project. The distribution of the piece and the client’s capacity to pay can come into play, among other factors.
Studios generally use a time sheet to record all the time spent on a project by everyone involved. Job names are indicated. Each person indicates how much time they spent doing a specific task. Remember that some tasks are not “Billable”. As the designer, you must agree with the client on what is billable and what is not. Someone needs to be responsible for the time sheet in order to ensure honesty and accuracy. It is important to fill in the time sheet every day at the least. Sometimes, in the rush of getting projects completed, details can be missed or forgotten.
Billing
Make sure payment terms are very clear with everyone responsible. Often, your contact can approve, but their accounting department or an executive could have an objection with your agreement.
Keep track of all invoices and their due dates. If payment is not received in the prescribed amount of time, it is a good idea to politely inquire. If the funds are still not forthcoming, send a copy of the invoice which is clearly marked “Copy - Past Due”
If the invoice is still not paid at the ninety day mark, you need to take more drastic measures. Invoices which are not paid after 120 days will likely never be paid.
“Kill Fees”
Sometimes, careful business practices and good intentions can be sidetracked by corporate decisions. Projects can be cancelled due to a number of factors out of your control. Often, work will have been performed at the time of cancellation of the contract. Accurate record keeping comes into play.
It is important to have a provision for such a circumstance in your contract. The “Kill Fee” amount is at your discretion. Whatever you establish should be clearly discussed with client and with suppliers (copywriters, printers, paper companies, illustrators, photographers, etc...).