Payment Guidelines in the AICP Post Production Guidelines and Best Practices have been updated, based on discussions in Post Roundtables and with the Post Council. The Payment Guidelines start on page 4 of the AICP National Guidelines - Post, which is hosted on the AICP Guidelines and Best Practices - Post Production page.
The new guidelines, which are posted below for your reference, acknowledge that post-production is a labor-intensive process that demands substantial resources, infrastructure, and upfront investment, as well as a highly specialized skill set. Timely payment for services rendered is therefore essential.
Independent post companies, though proudly self-sustaining, face similar financial obligations as any other part of the production chain and have less ability to absorb delayed payments than many.
PAYMENT GUIDELINES
Each post production company should consider adoption of a payment policy consistent with good-faith business practices that works for you company. Post production is a labor-intensive process that demands substantial resources, infrastructure, and upfront investment, as well as a highly specialized skill set. Timely payment for services rendered is therefore essential in order to meet obligations and support the resources required to service each job, no matter what the agreed upon contracted payment terms are. The payment plan described below is designed so that the purchase order is issued, and first payment is made, to the post production company prior to initiate the onset of the work. Unless other payment terms are agreed to in advance, subsequent invoices shall be paid in full not later than 30 days after the invoice date. Invoices that are not paid by the due date should bear interest on the unpaid balance at the rate; many have reported using “prime” + 2%* per month from the date of the invoice until paid in full. The post production company’s payment terms should be included on the face of the invoice and in any other written documents exchanged between the post production company and the contracting client, to avoid any confusion regarding the expectations of entering into an agreement.
It is recommended that if payment is not made as agreed, the post production company may reevaluate the ability of the contracting client to meet its contractual obligations. Failure to make prompt payment, as set forth in the contract between the post production company and the contracting client, may be a breach of contract. In the event that the contracting client is an agency and is in default of any payment, the agency shall provide the advertiser’s billing and contact information so that the post production company may notify and forward duplicate invoices to the advertiser.
The 75-25 plan**
This is an addition to other options laid out in the previous versions of the guidelines base on reports of members using this in many instances that require timeliness of delivery, practicality of resources applied and intensive overhead required to fulfill contracted obligations.
• 75% of the contract price is due upon award of the project and prior to the onset of the work
• 25% of the contract price is due and payable upon delivery
In all cases
• A purchase order for the awarded amount is required upon award.
• Overages are due upon agency receipt & approval.
• Deliverables should not be released prior to receipt of 1st 75% of contract price.
*The post production company determines the actual rate of interest. The rate tied to “prime” is used as an example.
**The post production company determines the actual ratio of first to last payments, subject to follow up negotiations with the advertiser, which may take into account such factors as up-front costs to the post production company, full payment risks, applicable labor law requirements, final payment risks and scope of work requested by the advertiser. The 75%/25% illustrated above is shown as an example, is only a reference point to assist the post production company and is not a recommendation by, or agreement by members of, AICP to adopt any particular payment terms or payment plan. Individual companies must negotiate their own payment terms, price and other terms directly with the contracting client.
For any questions regarding the new payment guidelines, please contact Shannon Muñoz-Flores, Director of West Events & Post Production, at shannonm@aicp.com.