Advice needed from other artists
novelist999
Posts: 90
A global corporation licensed some of my digital graphics to use in their software--non-exclusively, and I retain my rights to the graphics. The agreement was that I'd earn a certain amount for each product sold. They were supposed to send me the first payment at the end of December, but they didn't. I contacted the CEO whom I've been dealing with for the past few months. He said: "There were some issues I needed to clarify with the IT and Finance Department. If you can issue us a Performa Invoice that would be helpful."
What? A "Performa Invoice"? What is it? How do I create one? We'd never agreed to anything like that.
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Hopefully you had a copyright lawyer -- and a good one -- review any contract before you agreed to it. Sounds like you're getting screwed over, or are about to be.
You're probably right. I did some online research this morning and learned that a Performa Invoice is typically given prior to a transaction--not after the services have already been rendered. They've already used the graphics in their software. They're the ones who suggested the payment per item sold, which was generous. I'm trying to figure out how to respond to this request. I have no idea.
Definitely send them an invoice. I've never heard of a "performa" invoice, though. Typically, "finance departments" like that need proper paperwork to authorize the cutting of checks. This includes invoices. I typically use a Paypal invoice, since I prefer getting paid through Paypal unless it's a face-to-face transaction.
You're probably right. I did some online research this morning and learned that a Performa Invoice is typically given prior to a transaction--not after the services have already been rendered. They've already used the graphics in their software. They're the ones who suggested the payment per item sold, which was generous. I'm trying to figure out how to respond to this request. I have no idea.
DO NOTHING UNTIL YOU'VE TALKED TO AN ATTORNEY, AND ESPECIALLY PUT NOTHING IN WRITING AND NO VOICE RECORDINGS (NO EMAILS, NO VOICEMAILS -- NOTHING). Sorry to use the big voice, but I was trying to emphasize how serious it was. Do not hand these people ANYTHING that could possibly be used against you later. Find a good attorney and discuss the situation with them BEFORE YOU DO ANYTHING ELSE. I tend to avoid attorneys like the plague, so I can't help you find one, but I'm sure someone can, and try to consider this a learning experience in your career as a professional artist . Good luck...
I usually use Paypal too, but I believe they want a professional invoice for this. I guess I'll need to create one.
You're right. I'll be very careful in dealing with them. Hopefully, this CEO, also the owner, just wants an official paper to hand to the finance dept.
I found something on this site about artist invoices, which I thought might help others. I think this is probably what this company wants from me. I've never had to send such an invoice before.
http://muddycolors.blogspot.com/2011/02/invoices.html
That's a 'Pro Forma Invoice'.
Its a useful way to get your money out of a company in a timely manner.
From the company's point of view, they can keep the payment off the books till they get the actual invoice.
Think of it as a re-statement of your agreement but looking like a real invoice.
Its usually considered binding, so be careful what you write in it.
It's worth getting an accountant to check it out since it involves a monthly arrangement dependent on sales.
The accountant can work out what you put for an amount. (if anything?)
Though it's understood that prices may change between issuing a pro forma and the actual invoice.
You need real business advice: Talk to a lawyer and an accountant.
Much depends on the company you're dealing with.
Companies need paperwork and records for their expenses. They, too, have to file income tax returns, and list their expenses-- they can't just say to the IRS, "Oh, we paid this artist "X" amount of money for some artwork"; they need to be able to show an invoice for that expenditure.
In other words, don't *assume* that they're trying to rip you off. Just send them the invoice and take it from there.
Also, the guy meant a "pro forma" invoice, not a "performa" invoice. Dude needs to learn how to spell.
http://en.wikipedia.org/wiki/Pro_forma
in my country (not US, but I suppose it should be same or similar), a pro forma invoice would be an invoice issued before the actual official invoice. Later an official invoice should be issued, which will replace the pro forma invoice.
Pro forma should contain name, address and tax ID number of the issuer (you), name, address and tax ID of the customer, date on which it was issued, info about the product or service sold (name of item, number of items etc.), date on which it should be paid (or you may just write "immediately", "in 10 days" etc.), price and info about where the money should be sent (your account number, PayPal account etc.). Not sure if tax ID numbers (or some equivalent thereof) are necessary for U.S. invoices, they are in my country. The official invoice should contain the same information.
You probably do not know how many copies were sold, so don´t know how much to charge. So just for sure, you should include in your pro forma invoice a text saying that the price is not final and that the final price will be counted later, when you have the necessary information.
I'm also not a US resident, but when it comes to these things, I agree with the previous emphasis on getting the assistance of a lawyer and an accountant. Dealing with a corporation with money matters and copyright concerns can be a frustrating experience. Best be forearmed.