Top 8 Photography Invoice Tips with Photography Invoice Template
Photography is an amazing profession for anyone who one can immerse themselves in the art of capturing great moments of people and natural elements. Photography could become a passionate, life-long interest and perhaps even obsession for many of us. Beyond just a hobby, it is a well-established profession that spans several categories of photography. According to a recent market research conducted by IBISWorld, US’s photography industry alone generates a revenue of nearly $10 billion while providing employment for more than 200,000 individuals through more than 180,000 businesses.
However, many photographers find that managing their finances is not nearly as interesting as their professional work. However, one cannot underestimate its importance: it is how you get paid, and it is also an essential part of your client communication. Proper invoicing has an impact on your bottom line as well as business growth.
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With Hiveage you can send elegant invoices to your customers, accept online payments, and manage your team — all in one place.
Therefore, invoicing is an art that all photographers should master. In this article, we discuss the billing methods you should use in photography invoices, and then explore 8 important tips that a photographer should follow when invoicing a client.
Billing Methods Used in Photography Invoices
There are three widely-used billing methods in the photography industry:
1. Time Plus Cost Method
Here, you bill your client based on the time it took you to complete the project and you also add all the direct costs incurred during the project. Some examples for direct costs are: hiring of equipment (which are not owned by you), managing subcontracts such as hiring make-up artists, colourists, models, travel expenses, and costs incurred for parking and hotel accommodation.
Markup Fee in Time-Plus-Cost Photography Invoices
As a common practice, photographers charge a markup fee on top of direct costs. This is done to cover the time and effort it takes to organize services and other goods that are a direct cost to your business, and also to pay for accounting costs. If you emailed a retoucher and that entire process took you 10 minutes, the markup fee on top of the retoucher’s total cost should cover those 10 minutes.
Typically, photographers charge a 15% to 30% markup but experts in the industry recommend that photographers should use an average markup rate which would cover the entire time and effort you put for all the direct costs of a project.
2. Lump Sum Method
When you decide a single price on a specific task or a set of tasks, you call it a lump sum. This price can include direct costs of a photographer as well.
What photographers need to understand here is that they don’t have to bill an entire project for one gigantic lump sum price. In an invoice, itemize your work properly and allocate individual lump sum payments to each task.
Remember this titbit also: if you invoice a client using the lump sum method and suddenly the scope of work varies from the original plan, you can charge the extra work with the help of time plus cost method. These extra charges will come in handy if you have quoted a high hourly rate.
3. Upset Limit
Using this method, a photographer can bill a client based on time plus cost method, but up to a predefined lump sum limit. For example, if a photographer charges $200 per hour and the upset limit being set for a maximum five hours, he can only charge $1000 even if it takes him good seven hours to complete the shoot.
Top 8 tips for better photography invoicing
All these details lead to one important question: what are the top invoicing tips for photographers? We have 8 important steps that every photographer should follow when it comes to invoicing your client:
1. Include all relevant information in your photography invoice
No photographer likes when their payments get delayed. The main reason for this to happen is sending incomplete data to your client. When you include wrong details in the invoice, clients will get confused. This might result in your invoice being rejected by the client.
Make sure that you include all the necessary details in an invoice. A detailed invoice will prevent disagreements between you and your client, and make them feel like their money is well spent.
2. Use a standard photography invoice template
A proper invoice template will streamline your invoices and most importantly, give a professional look to it. If you are finding it difficult to come up with a proper template, simply check out our Free Invoice Generator: this free tool has all the important elements clearly marked with detailed explanations, and you can easily generate an elegant PDF that will be emailed to you right away.
3. Opt for an online invoicing service
An online invoicing software for photographers will provides you the level of efficiency you need to generate invoices and keep track of all your financial information. It reduces your cost, saves time, and helps you to be well-organized. Hiveage is a great platform for photographers, as it will let you send invoices and estimates, accept online payments, and get detailed reports from a single easy-to-use platform.
4. Keep your photography invoice professional
As a photographer, you get to know your clients really well. You were responsible for understanding precisely what they wanted; you were the one who asked the right questions and listened carefully to their answers. Through this process you probably got to know each other beyond the scope of a pure business relationship.
However, that does not mean that you are asking a friend to give you money when you send an invoice. Invoicing is strictly business. You are doing nothing more than requesting payment for services rendered and personalizing this in any way is bad for business. Even if you are in a position to know that your client has exceeded his or her budget, you can’t let it affect when you invoice them the amount requested, or when you send a follow-up reminder.
5. Act Promptly
After a project has been completed (or before you start any work, depending on the way you run your business), do not delay sending the invoice. Get it done immediately. A delayed invoice is only going to delay your payment. It will also give out the image that you’re unorganized and your clients may try to take advantage of that.
6. Create An Agreement
You don’t have to be in the business world for long to realize that some clients are rather lax about paying their invoices, and still others will disappear without paying at all. As frustrating as it is, it is simply part of the reality of doing business.
But there is one thing you can do to help yourself: get it in writing. Prior to accepting the job, give the potential client a letter of agreement that clearly states your terms. There should be nothing ambiguous or hard to understand about your expectations for payment, and the client should sign off on it before you begin the job.
7. Track all your Expenses
Tracking expenses is regarded as a pivotal step in business record keeping. From the cheeseburger you ate to the cab ride you took to meet your client, it is super important to keep track of these expenses. At the end of the day, it will reflect upon the growth of your business and assist you to build financial statements and prepare tax returns.
As a photographer, you should establish a system for organizing receipts and other important records right from the beginning. This could be done using an old school FiloFax. If you want to be more modern and systematic, use an invoicing tool like Hiveage which allows you to track all your expenses with much ease.
8. Know your taxes
You may find taxes to be very confusing but getting correct information and recording them is as important as selecting proper gear for your next photoshoot.
In the US, there are three main types of taxes — Federal Income Tax, State Income Tax and State Sales Tax. Federal Income Tax and State Income Tax are on your income. However, the State Income Tax is only required in some states. It is your responsibility to do your own withholdings and claim annually, although it’s suggested to pay estimated taxes quarterly to avoid the stress of a large bill at tax time.
According to The Modern Tog, Sales Tax collections are required in some states on session fees and mandatory in all states for products sold. This tax should be added to your prices for your clients to pay. Even if you have no clients for a taxable period, you must file a sales tax return and input zero or you can be charged a fee. Depending on the area your business resides, local sales taxes may need to be collected in addition. Additional tax information can be found in this article. If you’re not in the US, consult with your accountant to see if there are similar taxes to be collected in your country.
This article here will also help you in understanding the importance of a tax audit for photographers and different tax laws.
Photography demands time, consistency and unwavering commitment. This could result in both professional and freelance photographers missing out on properly invoicing their clients. Many would consider that it is just another document with some numbers but the reality is that invoicing has a major impact on the success of your business as well as your profit margin.
Invoices help you to get paid on time, track your earnings and project professionalism. To master invoicing, photographers should:
- Prepare detailed invoices with all relevant information
- Use a proper invoice template
- Get the assistance of an online billing software for photographers
- Maintain professionalism
- Speed up the invoicing process up after completing a project
- Clearly spell out your terms in an agreement
- Track all your expenses
- Get to know about taxes
Do you invoice your clients? Do you have any other tips which will make invoicing a pleasant experience for photographers? Let us know your thoughts in the comments section below!
Hiveage reached several photography experts based out of California to pick their brains out and complete this article. We take this moment to thank Anna Johnson of Blessed Wedding Photography, De’Andre and Kristina from Dee and Kris Photography and Rob Andrew of Rob Andrew Photography for the feedback they have given amidst their busy schedules.
And a very special thank you to Udi Tirosh, Editor and Chief Photography Hacker of the renowned photography blog DIY Photography, for sharing pro tips about photography.
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