30 day terms?

[joninc]

i have run into a situation and am feeling pretty frustrated right now. i would love some outside input.

i have a returning client who contacted me to do some recording - about a weeks worth.

as it turns out - the artist is broke and it is his label is paying for the sessions. they (the label) have asked me to invoice and said they'll pay within 30 days of receipt.

this is news to me - i expected the artist to bring a cheque and pay me once we're done. we are scheduled to start on monday.

my policy is to be paid upon completion of the work. and i don't release masters until being paid in full. i also ask for a 25% deposit up front.

i don't feel good about this scenario - once the masters are gone, i have no leverage to make sure i am paid.

but i have never really worked for a label before - always just the artists. so is this normal? (to wait 30 days)

what would you do? cancel the sessions?

[Anthony Caruso]

I've waited a year for checks from labels, I've had to threaten legal action. I've also been paid quickly, and I've only been stiffed once. This situation isn't uncommon in my experience, and 30 days was the norm. It does seem that labels get a special "Pay ya later" treatment fom everybody for some reason. I don't think I'd cancel the sessions as it's not unheard of, but I would strongly recommend getting a PO from the admin contact ASAP, and hopefully have written email contact specifying the 30-day term.

I don't remember exactly what "PO" stands for (payment order?) but it's kind of like a pre-approval and earmark for your money.

Maybe tell the label your policies? I put up with it because where I was working it's just "THE WAY IT IS".

[smtimecharlie]

I don't own a studio, but in terms of business to business purchases, this is the norm. A PO (purchase order) is essentially a contract that has a billing address, a shipping address, the product being purchased, the price, and the payment terms. Net: 30 terms are standard, and does mean that the invoice will be paid 30 days after receipt. So generally, the buyer sends a PO with these details, the product is sent with an invoice, the buyer's purchasing group notes that they did actually get the product, then they send the check. PO is signed by the buyer, not signed by the seller...sending the product is considered acceptance of the PO and then its binding.

Some PO's can have wording that is a penalty for a late payment. But I agree with the last person, getting a PO is probably a lot safer than a general, "turn in an invoice later, we'll pay it."

Short of a PO, you could draft a one page contract and have the label sign it - you're doing x amount of recording for y dollars for their artist. Bill will be paid by such and such date. A studio might prefer a PO or contract, that way, the know you won't increase the price on them later with hidden fees.

[cgarges]

Terms are normal for a lot of labels. So is late payment.

In the ultra-rare instances where I'm dealing with a label that requires terms, I charge a fee for the terms and usually allow 30 days. I get a contract on the agreement and specify a hefty late fee if I receive payment (not if they write a check on) a date later than the specified date (30 days or whatever). So, if their accounting department "didn't get the invoice" and "only writes checks on the 30th" and "should have put the check in the mail by now" or whatever, I get paid EVEN more money than my normal fee and the fee for terms.

I've noticed that a good number of semi-smaller, independent studios with a good pedigree (Inner Ear comes to mind and I think Electrical Audio is this way, too) require advance payment in full if someone other than the band is paying for sessions. Since these studios have a track record of doing the occasional label project, I'm curious how that affects things for them.

I've seen studios NOT start a session on the specified start date because the label dragged their feet on getting terms agreed-upon. I've also seen studios get totally shafted by starting a project on the specified date when the label hasn't agreed to terms and winds up not ever agreeing to them.

Chris Garges
Charlotte, NC

[millihenry]

I have seen contracts and invoices that indicate grace period and specific penalties beyond that. For example:
30 days grace; 60 days, +5%; 90 days, +10%; 120 days, +15%; over 120, +25%

Every person I have spoken with that has specified this or similar policy, has never needed to enforce it.

[@?,*???&?]

30 days?

You're lucky! Try working for a major label!

Typically you'll get paid 90 to 120 after the work is done and after making a dozen or so calls to the accounting folks.

That said, hang on to ALL masters (and at this point with our incredible sliding scale industry I'd call any resolution .mp3 a master) until you get paid.

That should get their attention about their payment policy.

[Bro Shark]

Yeah, Chris. Try working for a major label.

[cgarges]

The last check I got from Columbia came inside of 30 days. I know that's unusual, but it's true.

Good to see you back, Jeff. I'll be sure to buckle in.

Chris Garges
Charlotte, NC

[jnTracks]

DISCLAIMER: no experience here.....

but, late fee structure sounds like a good idea to me.

[@?,*???&?]

The last check I got from Columbia came inside of 30 days. I know that's unusual, but it's true.

Good to see you back, Jeff. I'll be sure to buckle in.

Chris Garges
Charlotte, NC

Hey, thanks. I'll try to be better than my usual self.

btw, on a side-topic and not to de-rail this thread, but I've got a guy with ties to Atlantic coming in tomorrow. Boasting Atlantic will pay for his demos. I plan on calling his A&R person and talking about the depth of this offer. This is nebulous stuff, in the beginning stages, but this guy is coming out of a modeling background, is young, and befriended one of their female A&R reps in New York while on a shoot in Miami. Likely, before I do ANY work for them, I'll have to get a P.O. # from them for me to refer to in billing. As this wasn't mentioned in the above thread, it is typically standard procedure with a label to do so. Chris, did you have a P.O. with Columbia?

[cgarges]

I didn't. It was handled by the artist's managment, which worked to my advantage, but the session was paid for by Columbia. I think it took like three weeks to get the check. I was astounded. I gues somebody realized the value of avoiding the late fee.

I remember years ago when I worked for a studio that did a lot of tour rehearsal stuff for major acts (Aaliyah, Buck Cherry, The Brubeck Brothers), we had a local hip hop artist who occasionally did work there and had a track record for late payments, etc. He called us up at one point trying to tell us that he wanted to book a session in a couple of days and that Atlantic was going to be paying for it. Calling his bluff, the studio owner told him that he wasn't interested since the last time he did stuff for Atlantic, it took him forever to get paid. The guy then said that they would be paying cash, up-front, to which the studio owner replied, "Are you kidding? Atlantic doesn't pay cash up-front for sessions! Don't pull this stuff with me. I know the Southeast accounts receivable guy at Atlantic. His name is..." etc. That was some funny stuff to watch.

Chris Garges
Charlotte, NC

[@?,*???&?]

I remember years ago when I worked for a studio that did a lot of tour rehearsal stuff for major acts (Aaliyah, Buck Cherry, The Brubeck Brothers), we had a local hip hop artist who occasionally did work there and had a track record for late payments, etc. He called us up at one point trying to tell us that he wanted to book a session in a couple of days and that Atlantic was going to be paying for it. Calling his bluff, the studio owner told him that he wasn't interested since the last time he did stuff for Atlantic, it took him forever to get paid. The guy then said that they would be paying cash, up-front, to which the studio owner replied, "Are you kidding? Atlantic doesn't pay cash up-front for sessions! Don't pull this stuff with me. I know the Southeast accounts receivable guy at Atlantic. His name is..." etc. That was some funny stuff to watch.

Chris Garges
Charlotte, NC

I did some rap stuff for Atlantic many moons ago. Got the call 25 minutes before the downbeat. I said yes and drove over to Track Record in North Hollywood. I showed up, the studio had no idea who was coming in. The A&R guy was acting in a surrogate role as producer (I forget his name. Was a young kid.), obviously, he showed up first. I did like 5 hours work after Trick Daddy and Nate Dogg showed up. I billed Atlantic for the time (no P.O.) then waited for 90 days to get paid. Frequently with rap sessions, no one EVER shows up and the labels still end up getting billed for the time- I saw that happen A LOT in L.A. I don't know if it was the lack of a 'real' producer (not beat-maker, i.e. musician) on those projects, lack of organization on the artist/management side, lack of knowledge about how expensive that can get or what, but it happened regularly. Some studios would book them and simply bill and sit empty 65% of the time. Talk about a racket! Chris, that place you mentioned should have done that!

[JeffT]

i have run into a situation and am feeling pretty frustrated right now. i would love some outside input.

i have a returning client who contacted me to do some recording - about a weeks worth.

as it turns out - the artist is broke and it is his label is paying for the sessions. they (the label) have asked me to invoice and said they'll pay within 30 days of receipt.

this is news to me - i expected the artist to bring a cheque and pay me once we're done. we are scheduled to start on monday.

my policy is to be paid upon completion of the work. and i don't release masters until being paid in full. i also ask for a 25% deposit up front.

i don't feel good about this scenario - once the masters are gone, i have no leverage to make sure i am paid.

but i have never really worked for a label before - always just the artists. so is this normal? (to wait 30 days)

what would you do? cancel the sessions?

Had wanted to reply to this months ago but I got sidetracked.

Net 30 is one of the basic norms in the studio business when it comes to billing a client (IMO). however you can still control the terms.

If your guy is signed with a Major make sure you get a PO from the A&R Admin department, but even with that in hand you can still ask for a partial payment in advance since you have never worked with them before. Also the PO (from a major label) helps ease your mind when it comes to turning over the masters before full payment. Terms with true INDIE labels pretty much fall into the same mode, but I would always hold the masters until paid in full.

[TapeOpLarry]

I remember Steve Albini (Electrical Audio) claiming that they'd say if payment was not made at end of sessions that the price would double. And that no major label took heed of it and they always paid double. Wow.

[Gentleman Jim]

I remember Steve Albini (Electrical Audio) claiming that they'd say if payment was not made at end of sessions that the price would double. And that no major label took heed of it and they always paid double. Wow.

Sure, what does the label care? It's coming out of the bands' royalties.