Custom Printing: Case Study on Scheduling and Payment Terms

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A relationship with a printer is just that, a relationship. To move forward, it must involve mutual trust. You need to know the printer will produce your job in a satisfactory way, and your printer needs to know you will pay as agreed.

This PIE Blog posting is a case study about agreements and expectations, and how there can unfortunately be a perfect storm when everything goes wrong. At the same time, there are ways to minimize this chance, and to understand the spoken and unspoken agreements with your commercial printing vendor based on accepted industry standards.

The Backstory

I am currently addressing a payment situation with a client for an annual report promotional mailing.

This is the job: a 24-page annual report in 4-color process ink, trimmed and saddle stitched; a 4-color letter on 60# offset stock; a 28# open-side envelope (which opens on the long side and is therefore “machinable,” which means it can be stuffed on a machine rather than by hand); and all mailshop work to prepare 1,500 copies of the aforementioned package and enter them into the mail stream.

All of this was produced over the course of the summer, which is prime vacation time for both commercial printing vendors and my clients–which led to people not being present to read and sign contracts, cut and sign checks, and respond to emails. Fortunately, the printer had enough staff to keep things going at all times, and I made sincere attempts at all times to contact my client (and/or her boss) in a timely manner with all contracts, schedules, and requests for payment.

The Schedule

The long and short of the matter is that a contract was drafted and signed in late May, and an initial request for half payment was made in early June. The half payment was not made in a timely manner, and at the end of the third week the printer put the job on hold, moved the annual reports, envelopes, and promotional letters into storage, and requested full payment plus estimated postage in order to continue.

(Keep in mind that my client is a “cash” client, not a “credit client.” Therefore it is within industry standard for the printer to require half payment before work starts–to cover the direct cost of buying printing paper, for instance. And it is within industry standard for the custom printing supplier to require final payment before shipping, unless the client has established credit terms. Postage is a direct cost, up-front, paid to the US Postal Service, so it is within industry standard for the printer to request and receive this estimated payment before the mailshop preparation or mail drop: the entry of the product into the mail stream by the Post Office.)

With that in mind, I encouraged my client to pay by electronic funds transfer rather than by check to eliminate any chance of delay in the mail delivery. I also explained in writing the reason the printer now required full payment, rather than half payment, to proceed.

By the end of a week’s time my client’s accountant (outsourced, not in-house) had sent out two checks (half payment and full payment) in error—and without using the faster option of the electronic transfer of funds. The process would have gone more quickly if two of the three participants had not been on their summer vacations.

I asked the printer to let me know when the checks had arrived, to destroy the check for the lesser amount, and to let me know when the remaining check had cleared (and therefore when work on the job could resume).

The job went into the mail as soon as it could. Unfortunately, this occurred about two days after the US Post Office raised postage rates, incurring just under $400 of additional charges for my client.

Needless to say, my client refused to pay the surcharge and said the printer was responsible because they had held up the job. This is where things are now.

What You Can Learn to Avoid This

All of this was the perfect storm of miscommunication augmented by key people being out of range of communication (due to summer vacations). I have drafted a letter to my client including a timeline of all activities, from the signing of the contract through billing, and including all invoices from the printer and the US Postal receipt (Form-3600R) for the mailing.

I have not heard back yet, but the bottom line is that since I had kept all relevant emails describing what was agreed upon and what had happened (plus references to the standard printing industry terms and conditions), I expect an eventual positive resolution. We’ll see what happens.

That said, this might happen to you (maybe once in your career as a designer or print buyer), so you may want to consider the following to help you sidestep such a nuisance:

1. First of all, postage estimates from the printer are just that—estimates. The printer will bill you for additional costs or refund to you any credits you are owed.
2. You can pay by cash, credit, or Visa in many cases. Payment by Visa will probably incur a 3 percent surcharge. “Cash” terms will require a down payment and a final payment before the job can be delivered to you or mailed to your clients.
3. I particularly like the option of electronic funds transfer for payment. Funds go from your company’s bank to the commercial printing vendor’s bank without any chance of delay or loss in the mail. The transaction (and the clearing of funds) will go much faster than the check writing, mailing, and bank-clearing process. In most cases this service is offered for free and sidesteps the 3 percent credit card fee.
4. You may not want to establish credit terms. Not that your credit is bad, but I believe an inquiry may affect your credit score. That said, if this is not a concern for you, you may appreciate being billed and having 30 days to pay.
5. Your custom printing supplier has to charge you up front because he must buy paper, and this is a major expense. He can’t be expected to front the money for paper, or for postage for that matter.
6. Charging you before releasing your job ensures your full payment in a timely manner. After all, the printer can’t front all monies and then come to you for reimbursement.
7. Schedules are important. Printers take holidays, too, and count workdays as Monday through Friday only, not Saturdays and Sundays. If you need rush services, this may be negotiable for a higher cost (i.e., to hire more staff to complete your job more quickly).
8. Good planning and communication with your printer are essential. If a company’s accounting services are outsourced (which is the case with my client), in slow times (such as late summer during vacations) unforeseen delays in payment can occur.
9. It’s important to keep records (written notes as well as a history of relevant emails) to explain your workflow should something go wrong.
10. No one wants to be considered a difficult client. The preceding list shows the importance of requesting a bill once you have signed the printer’s contract, and then paying it promptly on the agreed-upon schedule. Nothing will better ensure the timely delivery or mailing of your print job.
11. It would be wise to read the “Terms and Conditions” page of your printers’ contracts and familiarize yourself with the customs and standards of the commercial printing industry. Getting It Printed by Mark Beach and Eric Kenly is an outstanding book on custom printing, and it includes a copy of these in the text. (This may be out of date, since my personal copy of the book is a number of decades old. So you may want to Google these printing terms and conditions as well.)

The Final Takeaway

If you understand the written and unwritten laws of conducting business in the field of commercial printing, you can see what your rights and responsibilities are as well as what your printer’s rights and responsibilities are. This will keep your response to any problems on a logical rather than emotional level.

I’m sure my client was completely authentic in feeling he had been mistreated by the printer and by the Post Office. That just happens to not be relevant to the agreements made with the printer and the rules pertaining to US Postal Service rate increases.

We’ll see what happens.

This entry was posted on Tuesday, October 24th, 2023 at 12:16 am and is filed under PrintBuying, Printing Contracts. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.