Thursday, July 11, 2013

Getting You Paid, Part 1: What Goes Wrong

-By Lauren Panepinto


I hadn't planned to jump into financial matters just yet, but a few things happened this week, and they perfectly illustrate a side of the industry that is really so much more difficult than it should be. First, I spent a whole day chasing invoices that should have been paid by my company, yet for varied reasons, weren't. Then an AD friend who shall remain nameless told me an artist was holding out on sending a piece of hi-res art until they got paid, which was potentially contractually causing them to cancel the piece of art and not pay the artist at all. Then I had an artist email me who was supposed to be paid literally in November, and yet neither the check nor bank transfer has arrived yet, despite my many efforts to get it done. So I thought this would be a fabulous time to write a bit on Finance & Contracts, the most annoying part of being a freelance artist or Art Director (yes, trust me, it's as annoying for us as it is for you).

Before we start, let me say this. 99% of the Art Directors in the world are not out to screw you. First of all, if a company has an AD, then chances are they're a decent size and pretty legit. Second, paying artists is literally one of the great things about our jobs. Generally ADs wish they could pay you more than they are allowed to, because we know better than anyone how much work has gone into a project. And we already agree that the art is the most important part of any book cover, or game, or movie, so trust me, we're on your team. We'd like to pay you more. (And while we're at it, our salaries should be higher too. My artists get a much higher hourly rate than I do.) So, the moral of the story is, the AD is on your side. They want to give you everything they can to let you make great art, and then they really do want to pay you for it.

Because I so thoroughly believe this, I am totally in support of things like PACT, who are setting out to make a database for artists to see ratings of potential clients and companies. I'm not denying there are scams out there—unfortunately there are too many, but I'm not going to cover that here. I'm also not going to discuss working with super-small companies, or directly for individuals. That is a whole other can of worms, and I will put it on the list for a later post. This post is going to be about legit companies, professional Art Directors, and what you can do to help yourself get paid with the most speed and least confusion. In a perfect world, you wouldn't need to hear this, but let's be realistic...

So what the hell goes wrong? And what can you do?



1—The Bigger the Company, the More Bureaucracy

In a major company, there are a lot of separate departments, and they're generally crap at talking to each other. The more departments you have to get to work together on something, the longer it's going to take, and the more opportunities there are for it to get screwed up. Well, getting a freelancer paid involves 3 of the most bureaucratic departments in any company: Legal, Human Resources, and Finance. You get your contracts approved through Legal, then Human Resources has to approve the "hire" and make sure we're not going to get in trouble with the IRS, and Finance is the one that handles the invoicing, and has to check with Legal & HR to make sure they're cleared to pay the person before they let any money out of the house. Each of these departments has sub-divisions, and they're not great at communicating either. In my company's pay flow it literally, no exaggeration, takes 8 people to get someone paid. And none of these people are trying not to pay you, it's not their money, they don't get to keep it, they're just doing their jobs. But any one of those people can be having a bad day, miss a cup of coffee, have a hangover, not be paying attention, and poof, a document goes missing, or a checkbox doesn't get checked, and your money goes straight into limbo. 

What can you do?

Unfortunately not much. Communication with your Art Director is key. They may or may not have a studio manager helping them deal with paperwork (I wish), and if they don't, they are chasing paperwork in between their art-related duties, and it tends to pile up. Personally my favorite days to catch up is friday nights after everyone goes home, which shows you how awesome my social life is. Polite reminders and queries are always appreciated. Sometimes it might take me a day or two to get back to you, and it might be a "I'm tracking this I have to get back to you" reply, but don't stew furiously in silence assuming the worst until you are ready to explode in a nasty email. I'd rather have someone emailing me once a week than simmering in silence. I literally have no way of knowing an artist isn't paid until they tell me they haven't been paid, which is a little ridiculous, but sadly how things work a lot of the time.



2—Most artists suck at paperwork. (Art Directors too)

Sorry guys, it's true. Getting most artists to fill out paperwork is like herding cats. You only send back the signature page and don't realize you missed filling out a whole bunch of info in previous pages. Then you'll use colored inks that don't scan well, or you'll scan pages at resolution too low to read. You  don't read contracts, and you are crap at following directions on forms. Paperwork is redundant, annoying, and confusing, but I can't pay you unless you fill it out and get it back to me in legible form. (No iPhone pictures of paperwork either.) A lot of companies have moved to digital signatures and fill-in pdfs (sadly not mine yet, I'm trying to spearhead that here), but regardless - whatever paperwork hoops a company asks you to jump thru, you have to jump thru them. The ADs didn't make the paperwork, and we hate it as much as you do, but our hands are tied if we don't get the proper forms from you. And if they're filled out wrong and we don't catch it, then your invoice will die in the process, and I often won't know until you ask me why you haven't been paid and I have to go chasing thru the system looking for where the holdup was. 

What can you do?

When an AD sends you paperwork, don't let it sit. Read it (especially contracts), ask questions if you have them, and then fill it out neatly, with the proper information, ALL the information, scan it in nicely, and email it back. Keep a W9 (US citizens) up to date. Or a W8-BEN (non US-citizens). And for god's sake, if you're a US citizen, then get an EIN number already. It's a code number you use for business instead of your Social Security number, which you shouldn't be giving to anyone anymore. Getting an EIN takes 5 min on the internet, does not cost any money thru the IRS (do not fall for a scam site that charges you money for one) and it does not change your tax status in any way. If you have questions about your tax status, deductions, stuff like that, there's tons of resources online, or talk to an accountant. A good one saves you money even beyond what they charge you. Some specialize in freelancers, or even freelance artists. Ask around.

There are also many different time management and invoicing management programs around, and honestly, having one is a great investment. You're not just an artist, you are a businessperson, and running the business is half the work. Chime in artist folk, in the comments, what management programs do you guys use?


3—Artists & Art Directors are not lawyers or accountants.

It is a crime against artists that art schools do not teach more business. We are launched out onto the professional world with not only very little idea how to find work and conduct ourselves professionally, but we also just don't know how to protect ourselves legally. In fact, I was on the FIT Illustration Program Advisory Board this year, and I said that art students should have an "Art in the Real World" class that starts freshman year and runs right thru to senior year, and have it cover contracts, copyrights, invoicing, taxes, self-promo, marketing, etc. and they gave me a nice pat on the head and sent me on my way. Most schools, at best, have a one-semester Business for Artists class which is woefully inadequate. I'm considering talking to smART school about starting a class that covers business for artists, just because so many people ask me about where to learn this stuff. (Good idea? What do you guys think?)

And it's not just artists. I have received zero training in law & finance, yet I manage budgets for all my books, and have had to teach myself the ins and outs of contracts, copyright laws, and licensing (which in our new digital age, changes constantly). I am always pestering my patient legal department for explanations, and reading business magazines, and slogging thru fine print. It's not fun, but I have to be able to explain all the terms that we work by to our artists if they ask. And I feel morally obligated to know the company I work for is as fair as possible. But I still fly by the seat of my pants a lot of the time. I am often behind on paperwork, and I feel horribly about it, but I, like most ADs, do the best we can, and spend sexy friday nights elbow deep in paperwork.

What can you do?

All this boils down to a lot of people who are scared of legalese working on a lot of gentlemen's agreements and trust. And you know what, it's a testament to how awesome most artists and ADs are that there's so few problems. But the fact is, every company has different policies about work for hire vs. licensed art, kill fees, revision rights, resale rights, and a thousand other things, and as an artist it's up to you to read a contract before you sign it. (And feel free to remind your overworked AD that she forgot to send it.) And ask questions if you have them. And if you can't live with something in a company's contract, then don't work for them. But don't sign a contract and get pissed at the AD later for having to follow it. This also applies to budgets. If you agree on a price, it's extremely unprofessional to get mad about it later. You can always have a mature conversation with an AD if revisions are getting out of hand, or something seems unfair, but don't lash out at us like we're the enemy, ok? Party foul.



If you take anything away from this article, take this: It's all about Communication & Care. When you're working for a new company read everything, ask questions, prepare to fill out a lot of paperwork, and have patience. Yes, there are people out there who will screw you over. But most people are just trying to get the job done. Protect yourself with knowledge, don't sign anything you don't understand, and be patient, polite, and persistent.

42 comments:

  1. Great article, Lauren. Working in a large company myself I'm all too familiar with the communication breakdowns that can occur! This was a really interesting read, looking forward to the next instalment.

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  3. I wanted to comment and thank you for sharing that information. As a student I'm constantly digging around for copyright information, different ways to cover my bases in contracts, and the legal aspects of working freelance. Picking up extra business courses still only covers the basics, and not always from the creative industry perspective. I definitely like your idea of business being implemented from beginning to end of a program (but I'm a researcher, where as I know individuals who would do anything to avoid non-art related courses).

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  4. One of the best articles on AD/Illustrator relationships I've read. I'm currently freelance illustrating and art directing and everything you said is true about both sides. 'Can't wait for part 2.

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    1. thanks! i can't wait for the opening GRAPHIC for part 2, i already have the perfect one picked out...

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  5. Thank you for this informative post, Lauren! I learnt something new, for example I wasn't familiar with W-8BEN forms before. And I like the thoroughout positive tone of your writing.

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    1. well I do honestly feel that most people in the world are just trying to do their jobs as best they can, and it's easy to get mad at people until you hear their side of the story. There's a lot of things that happen on the AD side of things that make perfect sense once you just explain them, but we're generally too buried in work & emails to get out and about...i'm just putting on a blog the same conversations I've had a hundred times, it's worth the time to me to spread a little good communication.

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  6. Great advice. I recently got an EIN, which is essential as you said so you do not have to give out your SS number to every client.

    Also, Quickbooks and a good accountant really are helpful for the business side of things. Some of the tax issues(especially sale tax) can make your head spin.

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  7. Wow, what an insight into the inner workings of the business. Thank you so very much for the time and effort that it took for this on top of everything in your normal day.

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  8. Lauren
    Awesome article. When I was in grad school in NYC I worked at for an illustration rep, and that is where I learned all the business side of this industry. Not in art school. It was eye opening and really frustrating that we only learn how to make art in school not how to sell it or survive financially with the skills we are taught. Even the very basics like having an invoice ready were avoided! Yes they were mentioned but it was not necessary to have to graduate, only a portfolio of art. So now every time when I teach a class I get the students to invoice me like a real job. So that when they are out there they are prepared and know what to do and not scrambling to figure it out all on their own.
    Accountants are essential, everyone should have one to take advantage of every tax write off they can. As for programs for accounting, I use a mac so in the past I use quicken but with 10.7 i had to move to Ibank. happy with the new app. and it is cheaper. i know a bunch of people like Quickbooks haven't tried it on a mac so would be interesting to see what other people like. As for invoices, well, I hate to say it but I don't bill hundreds of invoices a year so I keep it simple. Not only cause i don't invoice a ton but also, I have to use word as a lot of my clients want them in a word doc! Crazy but it works and i keep a list of sent unpaid and paid. Hopefully some nice soul or 4 will post and easy app they use that can create word docs. Thanks for the post!! THere needs to be more talk about the biz side of this industry.

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    1. thats a GREAT idea about students invoicing, i'm going to pass that along to my friends who teach. There's some fabulous teachers that make it their mission to teach the kids some biz knowledge in their art classes, and bravo to them, but it really should be an official part of an artist's education.

      thanks for the recs on the invoicing - word huh? thats so weird. yick.

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  9. An entirely enjoyable read! I know quite a few people at the local art college who wish the teachers would explain this sort of stuff.

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  10. Just an awesome article Lauren, thank you so much for writing this one :)

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  11. Fantastic Article! I really like Billings for my invoicing software as it allows me to set up templates for different types of work and set timers to get a sense of how long a project actually takes me.
    I also heartily approve of the business focused classes through smART or similar places. That would be an excellent opportunity for artists new and old to fill in the blanks in their education.

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  12. Having played both sides of the street - AD and illustrator - I've been telling my artist friends this stuff for years! Now all I need to do is link to your excellent post! Thanks!

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  13. Excellent post! Thank you very much!

    Might be good to point out, though, that W9 isn't exclusive to US Citizens alone. I am a non-US citizen green card holder, but I still get the same W9 that everyone else does.

    Can't wait 'til part 2!

    J

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    1. that is absolutely a good point, there's definitely a ton of exceptions & special cases in tax law, so my general advice is, always start at the IRS website, and if you can't figure out what you need, ask the AD, or an accountant.

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  14. Great read Lauren!
    While not essential it can't hurt to be incorporated. I got myself incorporated when I started freelance designing in 1999 (eek!) There have been plenty of benefits so far.

    Everyone is going to find an accounting software they like at some point, even if they have to try more than one. I could suggest you make sure you look into how that app records the info so you can potentially port it to an alternative if you find something better later on. I found out the hard way with Quickbooks. I loved the app but I needed something that did more automated stuff for me. I love my new app better at lessaccounting.com.

    And for contracts I suggest you artists sign up with Echosign (https://www.echosign.adobe.com/en/home.html) or something similar. It's free for the low amount of contracts you'll probably sign monthly. It's not always necessary but it'd helped out a lot.

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    1. i am trying to get my company to start using echosign right now! i think a lot of the big companies are adopting it. it'll make the paperwork part so much easier. thanks for the tip! what are some of the benefits of incorporating...legal protection comes to mind, but other than that?

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    2. This is a great tip! I've been looking for online options as far as contracts/e-signatures go. Thank you very much!

      Question, though: If I were to use Echosign, does the other party need to have an account in order for him/her to sign it? Just wondering about the convenience side of things. Thanks in advance!

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    3. If you take the steps to incorporation you can reduce your chances of getting an audit. if you should be so lucky, you can also invest more per year in an IRA. Your accountant will be able to help better with some of the tax advantages. If you vacation you might as well write one of them off per year as your annual board meeting.

      Jingo, good question. I have a feeling they need to sign up. I can usually tell pretty quick if a client isn't "into" it and I just pop open the pages I need to sign in Photoshop. Save them with my sig and add them back into the PDF. It's a hassle but I'd rather keep the client.

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  15. Great article Lauren! Having smART school teach a course on the business side of art is a wonderful idea. I feel like that's an area of art education that could help smART school stand out even more!

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  16. Thanks for a great post! The 'business' class I had in art school was abysmal. We made business cards and were told half jokingly that the best way to succeed was to marry somebody with a steady income. Wow.

    I've read a lot about copyrights and contracts and feel pretty comfortable with those and invoicing, but probably need to beef up on my accounting info.
    I've had an accountant for a couple years but my freelance business is still pretty small potatoes so I haven't started using any accounting software outside of excel spreadsheets, opened a business bank account or signed up for an EIN, but I think I'll at least get the EIN number right away now.
    Makes me realize how much more I have yet to learn.

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    1. well there's just no one good place to find all the info, so its like a scavenger hunt...but little by little we'll get everything on muddy colors at least! feel free to suggest post topics...

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  17. Thanks for the great info, Lauren!

    As a freelancer, it's always a challenge to juggle the legal, finance, and management end of the art business. I do certainly regret never having had a "Business of Art" track in school, either. It would have helped a great deal when it comes to managing things like "how to read a contract," "how to get paid," "how to manage your books" and all those pesky Real World practicalities of being an Artist that they don't teach you in an art program track.

    Most of being a freelancer seems to be Trial By Fire, but a little direction or a good solid base would have helped!

    There's also just no good site/resource that collects all this kind of information and gives it to you in a practical fashion, so this is just a tremendous help! Can't wait for Part 2!

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  19. Great article Lauren. I used to work for an agent and it was my job to track down money. I had so many frustrating encounters that my process got pretty intense. I emailed AND mailed the invoice, I sent the contract right away AND sent a copy with the mailed invoice, and then I followed up the invoice with a 'did you get it' email. I hated to bother the ADs with this kind of overkill but it did reduce 'we never got it' syndrome ('we never got it' often means an illustrator must wait at least an extra 30 days to get paid on an already late invoice).

    Now I'm a freelancer too my process is less intense (I use getharvest.com). But it sometimes seems like the account dept. of large corporation is just a black box - you can't call them, there is sometimes a generic email that spits out an automated response. You basically have to resort to bugging the one person who likes / has worked with you and who is already buried under new projects. It makes you feel bad—and worried you won't get more work if you annoy too much—but, you're only trying to pay the rent! So frustrating.

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  20. Lauren, this was a great read. Thank you! I really wish I had talked to you at the IMC now. :)

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  21. Wow! Thank you Lauren. So full of knowledge. I hadn't any idea what a EIN number was, or that it even existed! You seem like a really cool gal and I wouldn't think two winks about work'n for ya. At the moments i don't have the chopps yet to work for ya but i'mma gonna keep at it and maybe some day I'll see ya! Thanks again and can't wait for part 2!

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    1. Sorry for the Redundant "ya's". I was really focused two nights ago but had to jump through some hoops figuring out how to post some thing here and lost my flow. I just wanted to stress how significant an impact your posting had on me and I wish I could jump right in to illustrating and that I think it would be pretty amazing working for you. Thanks again Lauren, I can't wait to see part two!

      Andre

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  22. Great article, thanks! Some of your points reminded of the video, "Fuck You. Pay Me." http://vimeo.com/22053820

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  24. Dear Lauren,

    As a freelance illustrator myself, I'm wondering if the all paperwork part is made easier with an agent/artist representative or not...

    Anyway thanks for the article, very interesting.

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    1. well its made easier for the artist, as its then the agent's job to deal with it and chase the money...usually an agent/agency will already be a vendor in most large companies' accounting databases already, so it might move things a little quicker...but then you get into the whole question of having a good agent vs. one who's a ripoff.

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  25. Dear Lauren,

    Thank you for this excellent article. I really appreciate it.
    Regarding the EIN, can an artist can one even if they are not incorporated/filing as a business? I would love to not have to send out SS# to anyone...

    Looking forward to more of your posts!

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  26. yes, an EIN is for individuals OR a person acting as a business. you should never have to use your SSN anymore for invoicing purposes.

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  27. Having an accountant by your side is important, especially when you're the type of person who's not really into numbers. You need to have someone beside you who can look over your finances and make sure that everything is running smoothly. He will assure you that you're always making the right decisions.

    Cory Saba @ Integrated Accounting

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  28. Wow, just wow. Not only have you made a very difficult subject cogent, it is right on the mark. From how ADs feel to what we wish for. I think I have been through every thing you have described.

    I think (and would love to help with) a smART class on the ins and outs of the business of illustration is a great idea. As a student adviser at SU, I proposed a similar thing and was looked at with something akin to disdain. It is definitely missing in any art school curriculum.

    Thanks for a great article.

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  29. “I have received zero training in law & finance, yet I manage budgets for all my books, and have had to teach myself the ins and outs of contracts, copyright laws, and licensing…” – Good for you. I know such is not an easy task, but you don’t have to do all the grueling paperwork all on your own. Give yourself freer Friday nights by getting legal help. Elias Brasel @ On Core Bookeeping Services

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  30. I am happy that I found your post while searching for informative posts. It is really informative and quality of the content is extraordinary.

    Part Time Finance Director

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