Commercial work is lucrative.
Signing contracts with huge brands can take your business to the next level. You have a larger budget to work with, you’re (more often than not) being hired because of your talent, and you have an opportunity to create a lasting working relationship with a big client.
Yes, commercial work can feel like some creative entrepreneurial dream.
But why does it take so long for you to get paid?
The Accounts Payable Department
Larger companies typically have a full scale accounting team. Within that team is the “Accounts Payable” department. There are a few responsibilities of Accounts Payable (abbreviated as just “AP” or “A/P”), but the main one is simple: to pay bills.
Larger companies have tons of moving parts, so specialized jobs like Accounts Payable are not uncommon. But, having a dedicated A/P team often means that your invoice has to be sent to the right people and contain the right information.
Even if you get your invoices into the right hands right away, you may still have to wait for your money.
Why Payment Terms Matter
With every commercial job that you book as a creative entrepreneur, it’s important to have a robust contract that details the entirety of the job that you’re doing down to how you’ll get paid.
This is where payment terms come into play.
If you’re unfamiliar with how payment terms work, check out this article for a basic breakdown. Unfortunately, contrary to what many small business owner’s think, the Accounts Payable department actually won’t pay invoices as soon as they’re received.
That’s right. From most corporate accountant’s perspectives, invoices shouldn’t be paid until the end of the payment terms.
In their perspective, there’s no advantage to paying a Net 30 invoice right away, since that money isn’t due until 30 days later. Why would someone want to spend money if it’s not due right away?
In many cases, this delay means that your payment may not be released for 30, 60, or even 90 days. Everything depends on your contract and who you’re dealing with.
Even when that date comes, it can take several days for a physical check to be mailed out.
What can you do?
When it comes to commercial work, everything comes down to the team that you’re working with. If you’re concerned about not receiving payment for work right away, it may be helpful to negotiate for more favorable payment terms!
One a project is done, sending out that invoice to your client can feel a bit like shouting into the void. A fantastic way to ensure that your invoice gets into the right hands and is paid promptly is to make sure you’re talking to the right person. Ask specific questions about who handles bill payments. Try to get that person’s contact information so that you have a direct line of communication.
Finally, send polite but firm reminders. Several.
Many creative entrepreneurs are wary of getting bulldozed by larger companies. For that reason, ensuring that you’re communicating with the right people and setting the terms of your deal straight from the beginning are extremely important.