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Business of VO – Collections

In this episode, Anne and Gabby talk collections. How to prepare yourself for a collections situation, what to do when someone doesn’t pay you, and how to nip it in the bud before even stepping in your booth.

With over 30 years of combined full-time VO experience between Gabby and Anne, only ONE client hasn’t paid.


Quick Concepts from Today’s Episode:

  1. Bill your clients up front! This way you’re sure to get paid.

  2. Use electronic payment methods to quickly receive funds. Only allow trusted clients to pay with checks.

  3. Have your terms of payment in an opening email.

  4. Vet new clients. Talking to someone on the phone is a good way to establish trust.

  5. Build late fees in to your terms of service to encourage on time payment.

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Referenced in this Episode

Direct links to things we brought up ++

  1. Learn about Money Blocks

  2. Keep track of your outstanding invoices with Freshbooks

  3. Another good program to use is Quickbooks

Full Episode Transcript

VO: Today’s voices need to be more than just a pretty voice. Today’s voiceover talent has to be a boss. A VO boss! Set yourself up with business owner strategies and success with your host, Anne Ganguzza, along with some of the strongest voices in our industry. Rock your business like a boss. A VO boss! Anne: Hey everybody, welcome to the show, the VO BOSS podcast. I’m Anne Ganguzza, here with my lovely co-host, Gabby Nistico! Gabby: Hi, hi! Anne: And today, we’re going to talk about something that I think not a lot of people like to do as part of our VO business, and that is collections. Gabby: Dun-dun-dun! That’s been like our theme music here for a couple of episodes, I think. We are, we’re getting into all the stuff that people don’t like. Scary stuff! Dun-dun-dun! Anne: Therefore, hopefully, listening to this podcast makes it a whole lot less scary. Gabby: I would hope so. We’re not scary, I mean not usually. Not unless you’re in my house at 6:00 a.m. when I’m just waking up. Then it’s a little scary, but you guys aren’t privy to all that, so most of the time I’m not scary. Anne: Our intention is not to scare you, we’re here to help. So, yeah, collections, Gabby. I know for a fact I try to avoid having to get to the extent where we are having to really push people for money, push our clients for money if they owe it to us. But it is kind of a necessary evil once in a while when it does happen. I’d like to start off by saying, let’s try to avoid having it happen in the first place. And I think that there’s some steps that you can take prior to establishing a relationship with a client that can help you to not have to go to that extent to get your money. And that is to kind of vet your clients and, I’m going to stay, establish a report with them because in this day and age where we’re all communicating via email, it makes it really hard sometimes to make connections with people. Because lots of times, things can be misunderstood. I would say, make sure that you have your payment terms up front with the client. Talk to the client if it’s possible on the phone. I always like to do that because I’m always saying to them, okay, here are my payment terms, and now that I know that you’re a real human being, because I’ve talked to you on the phone, it makes it a whole lot easier. And I think it makes collections a whole lot easier. Gabby, what do you think? Gabby: Absolutely. I think you’re right, the best-case scenario with collections is absolutely to avoid having that happen in the first place. And yeah, there are all sorts of things that you can do and should do to prevent that. I don’t necessarily feel the need to speak to a client, but there’s a very distinct point in my communication with someone, usually via email, where the conversation obviously turns to money. But not just the money, because we’ve already negotiated the rate, it turns more to the logistics. And at that point, there’s a couple things I do. The first is, I always, always, always require a client that I have never worked with before to pay up front. Anne: Yes, excellent. Gabby: If the job is really sizeable and it’s going to take a long time to complete, then I might ask for half to begin. But most things, it’s the full job up front. And the other thing that I do is, in that same email, I ask them for all of their company’s pertinent information related to billing and of course a contact name and phone numbers and address and literally, it’s like a form that I send them. And they fill it out and send it back to me. And one of the things that I ask for on that form is a credit card to hold in the event of a failure to pay. Anne: I like that! Gabby: Yeah, so there’s some very effective tools there. Because one of the things you’re doing when you send that message, I rarely have to resort to charging someone’s card. You’ve kind of scared them just by asking for it. Because you’re making it clear that you mean business, and yeah, if they stiff you, you’re charging them. Anne: I’ll tell you what, I’m right there with you on the payment up front, and for a new client, exactly perfect is that if you’re dealing with a client and you’re not familiar with them, you’re not familiar with how they pay or even if they’re legit, I always require payment up front. And that’s actually written right into my payment terms. Gabby: Yep, mine too! Anne: And it’s payment terms up front, in full. The other thing that I’ll do for a new client is I’ll have them pay me via an electronic method so that I can get the money fairly instantly rather than allowing them to pay by check. Because a lot of times, they’ll want the job done before they can send the check or cut the check. Or if it’s a large company, then usually, there’s another contract involved. That’s when I’ll accept checks, or if I’ve spoken to somebody on the phone and the company has a fairly legitimate reputation, I will accept a check. But for any new clients that I’m working with, especially if they’re overseas, too, I require payment up front, in full. And then literally, at the very end of my payment terms, I’ll say other payment options available upon request. And what that does is it allows people, if they have a different policy or the company has a different policy on payment, they can at least approach me. It says that I’m available for discussion. But, I can’t even tell you how many times I’ve asked for payment up front and I’ve gotten it. Gabby, it’s insane, you ask for it and you get it! I don’t think that I’ve ever had somebody not pay me up front, which is really cool. Gabby: I’ll tell you, in my experience, I would say about 80-90% of clients will abide by the payment up front term. Occasionally, it’s the larger corporations, it’s the really big companies that literally can’t make a payment up front. Anne: They need to have a PO or something like that. Gabby: Yes, but in those cases, there’s so much check and balance, I don’t feel in any way concerned that I’m not going to be paid. So I don’t worry about it. Those are exceptions that I’ll make. Anne: Exactly. Gabby: I’ll tell you something that’s really funny, so you and I have what sounds like almost identical processes to avoid collections. I have been criticized for years by various voice actors for my demand, shall we say, of payment up front. And, it’s sparked a lot of controversy in the past, of people going, oh, that’s impossible, nobody will abide by that, you can’t do that. Yeah, you can! Anne: Sure you can! Gabby: Yeah, you totally can! And it works, and some of the most successful voice actors who are running their businesses really well will stand behind this, like Anne, and tell you that it’s totally doable! Anne: I honestly had it happen last week. I had somebody contact me in a rush, saying oh my gosh, can you please, I need this today, can you do it? And I said well, here are my terms. Here’s what I typically charge for this job and I require payment up front. No problem, I’ll pay you in a minute. Like literally, what’s your email address for PayPal? And I got paid before I even stepped in the studio. Which is great! When people want you and they want that job done, they will, like I said, I’m amazed at the amount of people that actually do pay up front. And you’re right, with the larger corporations, as long as I’ve spoken to somebody and I know that they’re a big corporation and we’ve been through a process with, usually I’ve had to send them either some information about me or sign a contract. Then you’re right, I understand that. Gabby: The other thing, too, is I feel pretty good anytime a client beats me to the punch and asks for a W-9 and asks for tax papers on the front end, I feel pretty good about that. That tells me they know what they’re doing. Anne: Exactly, they’ve done it before. Gabby: So Anne, we’ve said a couple of things now, both of us, repeatedly in this episode, which is, in our payment terms, in our invoices. So let’s talk about that a little bit. Because I would venture to say that a lot of folks don’t have payment terms. And really don’t understand what that means. So what is that for you? Anne: Well for me, it’s an actual paragraph that goes right in the very first email or point of contact. The first form of contact that I have with a client is my quote, what it entails, what my deliverables are, and there’s just a paragraph that says payment terms, and it’s pretty stable. I say the same thing pretty much every time. For a new client, I’ll take off that line that says I accept checks. So I do customize it per client, but if it’s a new client, I will take off that line. Payment terms, payment in full, payable too via PayPal is preferred and greatly appreciated. So, notice how I say that. And I will tell people too, if I have the opportunity if I do speak to them on the phone. A lot of times, I’ll make that reason to call them on the phone for clarification of the job. So, I’ll just say, please feel free to call me with any questions or if I can provide you with more information, or like you said, I think it’s very important to ask for the contact information up front, I say for my accounting purposes or invoice purposes. Gabby: As do I. Yep, same thing. Anne: And that way I have a name and I have a phone number. I get really suspicious of, sometimes people will send me requests for quote, and they’ll have a name but they won’t have a company in their signature and they won’t have a phone number. Gabby: Or they don’t have a signature, that always freaks me out. It’s like, who are you? Anne: That freaks me out. That’s when the radar goes up and that’s when I really demand payment up front. Or I say, hey, I’d love to discuss the details, let’s talk or let’s chat, or, please provide payment. If they provide payment right away, then I’ll just say, oh by the way, can I get your contact information for my records so I can send an invoice? Gabby: Yeah I blame it on my accountant. Anne: Yeah, exactly. Gabby: I go, oh my accountant needs all your contact info. Anne: So payment terms, to me, is having that already there, having that paragraph written. What about you? Gabby: Well, it’s pretty much the same. Mine is actually in my invoice. It’s the note section or a paragraph that’s in my invoice that details exactly what you said, as well as terms for existing clients and repeat work, being that it’s 30 days net. So, I tend to not modify it. But what I will do is try to beat the client to the punch of, once we’ve got everything agreed upon, let me have your information so I can send you a proper invoice and that will give you your payment options. Anne: I’m sending an invoice– Gabby: And they’re usually happy with that. Anne: Yeah, send an invoice immediately after I’ve done the recording, if not right away, I’m sending an invoice. And so, when it gets to the point where, let’s say, somebody, net 30 days. Alright, so let’s talk about what happens with net 30 days if it’s 20 days coming, 25 days, you haven’t really heard anything. What do you do, Gabby? Gabby: I tack on a late charge. My billing system is automatically set up to start accruing late fees at 30 days. Anne: After 30. Gabby: Yep. Anne: And that’s great, and that’s in your payment terms. Gabby: Yep. Anne: Now I have some larger corporations that will specify to me up front, okay, here we go, we’re putting you as a vendor. Here’s the contract, by the way, our net pay is, I have some that are 45 days, I have some that are 60. And you know what, if I get enough recurring work from them, I’m okay with that. Gabby: Oh yeah, I’ll waive fees in situations like that, or if I know what to expect. But if I don’t, then they’re going to get charged. Anne: So what do you charge for late fees? Gabby: I think mine right now is 5%. It’s 5% of the total. Anne: 5% of the total every how often? Gabby: Every 30 days until it’s paid. It’s 30-60-90. Anne: That’s great, and I think that’s a great thing to have in your payment terms. That’s actually something that I don’t have in my payment terms right now. Gabby: Really? Anne: Honestly, gosh I’ve been in the business full-time now just over 10 years. I have never had a client not pay me. I’m very happy to say that. And it’s really interesting because there are some people I see in the forums and everybody’s like, what do I do, this client hasn’t paid, or I haven’t heard from them in months. I honestly have never, and that’s a good thing, but I also think that it has a lot to do with vetting the client and putting those payment terms up front. And understanding that if you don’t hear back from somebody via email or you’re not receiving a portion of that payment up front, then that may be something that you want to reconsider, perhaps, doing that job. Gabby: Well let’s talk about a couple of quick things here, so first is, have your bullshit meter on high at this point in your dealings with a client. If it doesn’t look right, be prepared to walk away because if they’re providing limited information, if they don’t appear to be conducting themselves as a professional, expectations like we were just talking about, if I don’t see a signature, things of that nature. That’s data that you can use to pretty well determine whether or not this person is legitimate. And that’s going to be what pushes you further into the direction of asking for that money up front. Anne: Absolutely. Gabby: Now, Anne, you talk all the time about money blocks. Anne: I do! Gabby: Why do you think it’s so hard for people to just ask for money up front? Anne: Well, I think a big part of it is a fear of rejection, a fear of, you state a price, here’s my fee or here’s the price for this service, and then that person coming back and saying no. Or no, that’s so high, who are you? I think we’re afraid of that reaction, of somebody being like, who are you to charge me that amount of money? And I think that really that fear is what stops us from being so confident in asking for it. Gabby: I don’t think anyone would ever be so rude in this industry as to ask that question. I’ve certainly never seen that. I’ve never seen somebody come back and go, who do you think you are, basically. Anne: Yeah, well that’s that thought. It’s that thought that somebody would actually go, oh no, no no no, that’s way above. They may not say it like that, but they would say something like, oh no, that’s way too much for our budget. And that’s the people people feel afraid that they’re going to get rejected and then what it does is it attacks their self worth. And so, when you have to put a price on your services, you are really putting a price on your self worth and that’s very, very difficult for people. Gabby: Me personally, we all know my brain goes to the craziest place possible, but as I’m listening to you say that, I’m thinking to myself, you know, a prostitute doesn’t have any trouble asking for money up front, and certainly isn’t concerned about rejection and is perfectly willing to walk away! Anne: What does that make us? Gabby: Many, many times, and I hate to say this, but many, many times, we have been compared to professional whores. There’s also the fact that a lot of our agents will openly talk about how they’re a pimp for voice actors. Anne: It absolutely makes sense. Gabby: So, come on! Anne: They sell us, and you know what’s so funny is I’ve been known to say more than once in my career, you’d be amazed at what I’ll say for money! It’s true, to be honest with you. I provide a professional service, and hey, I negotiate, I’m willing to listen if you’ve got an idea for a project, absolutely. It’s all being part of the service industry. Gabby: I think some of it, too, is just being daring. If this is a big problem for you, then it’s just trying it one time. It only takes one time for you to ask and to receive, for it to work that you go, oh, wow, okay, I’m just going to do this from now on. Anne: Exactly! And what the funny thing is, is if you make your statement, here is what I’m charging, and then you just wait, don’t try to justify why you’re charging that. Gabby: No, not at all! Anne: In negotiations, silence just makes them quiver. Really, it’s like, here’s what I’m charging. And then just step back and let them come back to you. Then the ball’s in their court. One of the best things you can do is just make your statement and then just wait. Be silent and wait. Don’t feel that you’ve got to justify why you’re charging that amount of money, why it’s going to take you however much time it’s going to take you. That’s it, you’re confident. Respond with confidence, and then just wait. And that is probably one of the best tricks of business negotiation that I can tell you. Gabby: I love it. Anne: Yeah. Gabby: So now, so we’ve talked about the ways to avoid collections, but now let’s talk about what happens if you actually have one. Anne: Oh, okay. Gabby: If you actually have to do it. I mean I actually have a couple of them right now that I’m going after, so processes for this, I think, are pretty easy. First of all, your invoices should, providing you’re using the right software, automatically resend the invoice every 30 days that it’s past due. Anne: Or it’s easy enough to set. Gabby: And it should alert you. Right, either way. And it should alert you of this, and if it doesn’t automatically do that, then of course you have to be on top of it and monitoring those things. Anne: If I can’t interrupt there for a second, using FreshBooks, right? Gabby: Correct. Anne: And FreshBooks does send reminders? Gabby: Automatically, yep. Anne: Interestingly enough, again, I have an accountant and so she’s my reminder system, but I have to check in QuickBooks if there’s a function for every 30 days to send out another invoice. I love that FreshBooks does that. But it’s so easy for me to go into QuickBooks, my accountant will say, okay we’re past due, or I get notifications from QuickBooks that certain invoices are past due. And so, it’s super simple for me to go in there and just click resend. Gabby: Well yeah, it’s really all about the notification, just knowing what’s past due and what isn’t. Anne: I just want to say when I have to do that, it’s not that the client is refusing to pay me. Sometimes it’s either a smaller business and they’re as busy as we are and probably that email got stuck in the black hole. And so not always is it a horror story as to when I send a reminder. And it could be a repeat client a lot of times that is a super busy production company. And then they’re like, oh my gosh, I’m so sorry, I got the check, I wrote it today. I had to do that today as a matter of fact. I sent a reminder in an email saying, I’m so sorry, I don’t have payment on record. Could you please check into this for me? And it’s not like you’re accusing them of not paying, you’re just asking to check status. And then usually that’s something where the client’s like, oh my gosh, I’m so sorry, let me send the check out today. Gabby: And that’s what I mean. 30 days doesn’t scare me, 45 doesn’t scare me. These smaller companies, yeah, they might only cut checks once a month, no big deal. 60 days is when I start to raise an eyebrow and go, okay, now I need to make phone call, I need to send a personal email, I need to actually communicate with someone there and I need to receive a response. And at this point, I start tracking that. I literally start writing down who I spoke to, when, what the status is, what they were able to tell me. And from there, I actually will communicate with that person once a week until I see money. Anne: Yeah, I agree with you there. And I think that communication, and again, I think stronger communication at this point is via telephone. If you do that, to actually speak to somebody. I’ve worked with some larger companies where it’s actually their accounting department that you have to speak to somebody, not necessarily the contact that hired you for the job. Sometimes there’s only so much they can do their accounting department and then, usually, I will ask for a contact in the accounting department so that I can further investigate or follow up. Gabby: Yes, but one thing that I do is, I know exactly what you’re saying. We might have been hired by a producer, a writer, a creative who really has nothing to do with check writing or accounting or any of that. But I will make sure to CC that contact person on every single communication with their accounting department. Because if that creative person needs me again, or they think they need me again, they’re going to put a lot of pressure on accounting to get me paid. Anne: I had a job that I had done with a college, and you’re right, it was a very large college so the person that hired me was so far removed from the accounting department. But you’re right, that’s an excellent point, thank you for making that. I did CC them on every single piece of communication. And it got to the point where they needed me again for another project, and I’m like, okay. They’re like, oh but so and so is no longer in accounting so here’s a new contact for you. So they actually kept up to date with it, and were really helping me out. Gabby: Oh, well good! Anne: So, I like that. Gabby: So, like you, I have only had one failure to pay, one legitimate actual failure to pay, but that’s in close to 20 years. Anne: That’s fantastic, great track record, Gabby. Gabby: So, really not that bad, not that big a deal. Anne: I had one who almost didn’t. I’m going to say it took close to a year, but I did finally get payment. Gabby: Well, these are the things that, again, I kind of get into the specifications of what to do so after 120 days, you can of course threaten the company with legal action and get a collections company involved and turn it over to them. The problem is, you’re usually going to spend more money than what the invoice is worth to try to go after these funds. So, I always say if it’s less than a few thousand dollars, don’t even bother. Anne: I agree. Gabby: You can continue to send notices, and you can continue to put some pressure on them, but just be prepared to, at the end of the year, write it off. It literally becomes a write-off because it’s a failure to pay. So that’s usually the best way to handle it. The other option, however, if it’s over a few thousand dollars and it is worthwhile for you to go after, then yeah, by all means get a collection company involved. They’re going to take a percentage based on them collecting it for you, but that percent is well worthwhile. And they’ll destroy somebody’s credit, so it’s brilliant to get them involved. Anne: And folks, this is when you’re doing your own negotiations. It’s rarely going to happen to you when an agent is involved because again, they’re the ones who are doing all of that negotiation for you, and getting the money for you. So, this is when you’re doing your negotiations typically with a company, it can be with large companies, but a lot of times it’s with smaller companies. And again, it’s one of those things where you continually send that reminder based upon if you have it automated in your software or if it’s easy enough for you to go and send an automated reminder for payment. Continue the communication with the person or people. A lot of times, I know that there will be people that are no longer working for the company and then you’re trying to chase down a payment, the person who hired you is somewhere else, and so you’re looking for new contacts in that company. So make sure you’re following up, and as Gabby said, if it’s less than a few thousand, after so many days, it is a write-off for me. I wouldn’t bother to spend the money to get a collection agency. But if it is over a few thousand, for sure. Take that up. Gabby: So, takeaways, we have number one, make your policies, have a payment policy. Get ahead of this process so hopefully you never have to deal with collections in the first place. Second thing is make sure that you have the software, the tools, the system in place to monitor and track anyone who is past due. Anne: I would say to vet your client. Gabby: Yeah, absolutely. Anne: Vet your client! Make sure that if it’s somebody that you haven’t ever worked with before, payment up front. Make sure you get contact information, company information, telephone number. Not just their email, emails are so easy to ignore a lot of times by people in a company. Make sure you get a phone number. If there’s no signature on the end of that initial email, it’s the first thing I’m asking for is their contact info. It sends a red flag to me. I make sure right away I’m getting contact information. Gabby: Yeah, I’ll take this the next step further. Don’t just vet them, vet the shit out of them. Anne: Look for websites. Gabby: Think about all of the data and the content that a company wants from you as an individual when they’re going to extend credit, why can’t you do the same? You have every right to ask a company that you’re going to extend credit to in any form, to fill out a form for you! And to get you all of this info, and I absolutely recommend that you do that and that you make that part of every interaction with every client. Anne: Yeah, absolutely. Gabby: And keep your files! I’ve had to, in the past, some of the ways that I’ve been paid is actually having to go back to a client’s original file, and say, okay, I have credit card number that ends in XXY, and if I don’t have a confirmation of payment by Friday of this week, I’ll be charging this card for this amount. You’d be amazed how fast you get a call back when you say that. Anne: That’s fantastic. I just want to follow up with you on that. The credit card that you ask for, do you say for as a deposit, or for holding? How do you say it? Gabby: Literally just that. I’m asking for a business credit card to hold. To hold in the event of a failure to pay. Anne: Got it, so will they actually respond to you in an email with a credit card number? Gabby: Yeah. Anne: Okay, alright. Gabby: I will send them a form. Anne: Now that’s something I personally wouldn’t do, but that’s because I used to work in computer security. I would never give my credit card information through email. Gabby: They have the option to just call me up. Anne: Exactly, and that’s what I would do. I love that idea, that’s a fantastic idea. So you know guys, collections, doesn’t have to be a horrible thing. Gabby: Nah. Anne: Not really. As both Gabby and I have said, the two of us have been in the industry a long time and maybe we’ve had to really look further into it one or two times, so if you take our action steps seriously, and really get your policies in place, get your software in place, due diligence, do good tracking, I think you guys are going to be okay. Gabby: Absolutely. Anne: We all make our money and receive our money and be happy and no money blocks anymore! Gabby: No, and it’s honestly, A, not that hard, and B, I think, even when you do have somebody who’s late to pay, there is again a sense of accomplishment and pride in being able to handle that yourself. And going ahead and collecting your own money, it’s nice. Anne: Absolutely. Well awesome, what a great podcast. I think we could probably go on for days on that. Gabby: Yeah, we’ll come back around to it at some point. Anne: We’ll come back around at some point. Gabby: Hey, here’s a great idea. If you have questions related to collections or accounting or billing or any of these things we’ve been talking about in recent, shoot us an email! Anne: Yeah. Gabby: We’d love to hear from you, we’ll do some Q&A’s live. Anne: Yeah, you can send it to myself, or? Gabby:, yep! Anne: For sure! Alright, guys, so I’m just going to wrap up our podcast for today. As I wrap up, Gabby, can I just say how much I love our sponsor, IPDTL. Gabby: I know, I know. I know, first you’d marry the internet, but you’d divorce the internet and then you’d marry IPDTL, I totally know. Anne: I have had such wonderful, wonderful experiences with IPDTL, you guys, if you love our connection, Gabby: It’s amazing. Anne: and you love the sound of our recordings, it’s due in one great part to our sponsor, IPDTL. You, too, can record like a boss with IPDTL. You can find out more at Gabby: From all of us at the VO BOSS podcast, have an awesome week, stay focused, and rock your business like a boss! Anne: Like a boss! Gabby: A VO BOSS! Anne: A VO BOSS! You can like us on Facebook at VO BOSS podcast and Twitter @VO_BOSS. Gabby: Subscribe to us also on iTunes or Skidger. Anne: Have a great week guys, thanks so much! Gabby: Bye! Anne: Bye!

VO: Join us next week for another edition of VO BOSS, with your hosts Anne Ganguzza and Gabby Nistico. All rights reserved. Anne Ganguzza voice talent in association with Three Moon Media, redistribution with permission. Coast to coast connectivity via ipDTL.