Every video project should be split into progress payments. By splitting the financial payments across progress you ensure protection for your financial security. Typically, I recommend the use up to five, equal payments. If project’s have extremely short timelines or do not involve a full-service production (such as shooting only) then adjust your payment schedule.
- Project Initiation — Once the project scope and budget is agreed upon, a deposit for 20% of the project should be submitted.
- Preproduction — This stage encompasses the bulk of project planning. Tie a progress payment to the deliver of the script or other relevant preproduction tasks. Issue a progress payment upon delivery of final preproduction items to the client.
- Production — I recommend the submittal of an invoice once shooting begins. This is typically the most expensive stage of a project. Be sure that you have received some form of payment before production begins. Do not hand off project footage until at least 50% of a project’s budget is in hand.
- Postproduction — Once editing begins, another progress payment should be issued. Some choose to watermark projects until at least 66% of a project’s budget is received.
- Closeout — A final bill that reflects any change orders should be generated at the completion of a project. Be sure that your agreement states that you retain certain rights to a production until payment is received in full.