One of the biggest challenges in running a production company is navigating payment terms. On one hand, we need to maintain consistent cash flow for our business. On the other hand, we have a responsibility to ensure fair and timely payments for our creators, crew, and suppliers. At the same time, we must also accommodate the payment structures of the agencies and brands we work with. Striking this balance has been a challenge from day one.
The Problem with Industry-Standard Payment Terms
Payment terms in the production industry vary widely. Every client, agency, and brand has its own approach, and often, these terms are not communicated upfront. As a result, production companies frequently find themselves chasing payments, only to discover that the client operates on a 60- or even 90-day payment cycle.
This is not just a cash flow challenge—it affects relationships and reputations. When payments are delayed, it creates a knock-on effect. Crew and suppliers expect to be paid on time, and when they aren’t, it damages trust and makes it harder to retain top talent.
Many brands and agencies adhere to a standard payment structure: a 50% deposit before the shoot and the remaining 50% after final delivery. However, this approach doesn’t always align with the realities of production.
Why a Blanket Payment Approach Doesn’t Work
Every production is different. Some projects require extensive pre-production, while others involve lengthy post-production phases. A rigid two-payment structure often places undue financial strain on production companies.
For example, travel-heavy shoots require significant upfront spending on logistics, accommodation, and flights—costs that far exceed the standard 50% deposit.
Meanwhile, projects with heavy post-production components often face delays due to client approvals, further pushing final payments down the line.
Cash Flow Mismatches in the Standard Model
In South Africa, the industry norm is to receive a 50% deposit no later than seven days before the shoot. This is intended to cover costs like crew, catering, locations, art & wardrobe petty cash and production insurance. However, these expenses often exceed 50% of the total budget, meaning the production company has to front the difference.
At the same time, supplier and crew payment terms have been evolving. Normally, crew payments are typically due within 20 days of the shoot. Today, due to stretched budgets and more creative execution required, 7-day/12 hour deals have become the norm — meaning production companies must pay crew well before receiving final payments from clients.
Gear rental houses have also adapted, with many now requiring partial or full payment before equipment is collected. Similarly, post-production houses increasingly demand a 50% deposit upfront, as delays from clients often disrupt agreed-upon schedules.
The result? Production companies find themselves in a constant financial squeeze, covering significant expenses before receiving payments that were originally meant to sustain the project.
A New Payment Structure: Milestone-Based Payments
At Dare, we analyzed 60 projects from 2023 and 2024 and found that, on average, 60–65% of a production’s costs are incurred before or within seven days of the first shoot day. This made it clear that the standard 50/50 model is no longer sustainable.
We propose a milestone-based payment structure:
20% upfront upon project approval – This non-refundable deposit secures production time, allows pre-production to begin, and covers early costs such as location scouting and casting.
50% seven days before the first shoot day – This ensures that essential expenses like crew, locations, and catering are covered.
30% upon final delivery – The remaining balance is due 15 days after the project is completed and delivered.
This approach better aligns with the financial realities of production, ensuring that suppliers, crew, and creatives are paid fairly and on time while reducing the financial risk for production companies.
Overcoming Client Payment Structures
One of the biggest barriers to updating payment terms is that large corporations and agencies often have rigid internal payment policies. However, these policies are not always set in stone. When production companies have strong relationships with clients, they can often negotiate custom payment terms to align with the realities of production.
We believe that by having transparent conversations early in the process, production companies, agencies, and brands can find a payment structure that works for everyone—ensuring that productions run smoothly without unnecessary financial strain.
Industry Feedback
We are keen to hear from industry professionals—agencies, brands, and production companies—on how we can refine this model further. Does this structure make sense? Have you faced similar challenges? What solutions have worked for you? Let’s start a conversation and work towards a more sustainable future for content production.
Written by Chris Coetsee
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