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Handling printing for freelance clients

Discussion in 'General Business Forum:' started by floriographic, Sep 8, 2013.

  1. floriographic

    floriographic Member

    Hi all

    Not been freelancing for long and most of the jobs i've done have either not required printing or the client has chosen to handle it themselves. I'm registered as a sole trader and still getting to grips with invoices and payments etc and was hoping for some advice.

    I'm wondering how people handle printing for clients? Do you pay the printer and include the cost on your invoice to the client or get the client to pay the printer directly? If you do invoice the client for printing, how does that work with regards to tax and tax returns? I normally aim to get 50% of the design cost upfront before work starts, would you invoice for the print costs upfront too so that you wouldn't be out of pocket if the client did a runner?

    If you arrange printing do you mark up the price to cover time spent finding and liaising with printers or do you include that in your design time?

    Any input would be helpful!
     
  2. Levi

    Levi Moderator Staff Member

    If you pay for the clients printing (and charge for it obviously) you would be able to claim back the cost of printing - read the below for information from my memory but please go to the government portals for more detailed information.
    - not vat registered - you would claim back the whole expense including vat against your earnings at the end of the year when doing your tax returns.
    - vat registered - you claim back the vat like you would on a normal purchase and then claim back the non vat cost against your earnings during tax returns, again at the end of the year.
    Side Note: When doing your invoicing make sure you don't add vat onto the printing twice :)
    In both cases you would charge the client a fee which would be deemed your income and then the printing is an expense so is taken away when you do your taxes etc.
    Basically put, you need to include the invoice for the client in your income and the outlay (invoice) for the printing in your expenses which would then 'cancel out' the printing you paid out for when you pay your taxes.
    Same principle applies for pretty much any business purchase, excluding things like clothes (daft I know), food for clients and a few other things here and there.
    As a side note, if you are not vat registered and the client is vat registered then it's actually better for the client to pay for the printing themselves because they can then claim the vat back, where as they can't if you pay for it (iirc, it's not easy if they can anyways) due to your invoice being without vat. You can tell them that it's better for them financially but you'll happily work as the 'point of contact' on their behalf for a small fee :)
    Do I deal with printing, not unless I have to, not that it makes much difference in my case, I'm vat registered so they can claim the vat back either way.
    Hopefully that makes sense, it's late lol
     
  3. floriographic

    floriographic Member

    Thanks Levi.
    I'm not VAT registered, so i'd be claiming back the full cost of printing. If you mark up the printing cost and then claim back your printing expenses with the invoice used to pay for the print, the costs are going to be different... does that cause problems?

    Do you have a standard percentage that you would add onto printing? What's reasonable?
     
  4. Levi

    Levi Moderator Staff Member

    Your invoice would be something like this:
    cost of my work: £1000 exc VAT
    cost of me managing printer: £50 exc VAT
    cost of printing: £600 inc VAT (thats £500+ 100 for vat)
    Total Cost to client £1650 - ie your invoice
    Client can claim back £0
    You can pass on the full cost of printing to the client but you can't remove the vat from the printing costs. The client can't claim the vat back from your invoice because you're not vat registered, hence my comment earlier. In your case I would highly suggest to VAT Registered clients that it is better for them to pay for printing themselves with you being the 'point of contact' for the printers.
    Here's why:
    Take your invoice:
    cost of my work: £1000 exc VAT
    cost of me managing printer: £50 exc VAT
    Total Cost for your services: £1050
    cost of printing: £600 inc VAT (thats £500+ 100 for vat)
    Client pays: £600
    Claims back VAT: £100
    Total Cost to client: £500
    Overall Cost of your services + Printing: £1550 - the client saves £100.
    Note above are easy figures to work with rather than representative costs.
    At your yearly tax returns you would have £1650 income, 600 expenses if you pay for it all or it would be £1050 income, 0 expenses if you get the clients to pay.
    What percentage would I charge... I don't have one, if I've had a large job leading up to printing I'd probably throw in dealing with the printer on their behalf for free, on a smaller job I'd figure out roughly how long it's going to take dealing with back and forwards then set a price, either way I'd be putting down the cost of printing in my invoice at cost, then my 'services' as a second cost to the client - it's like big companies and their administrative work :)
     
  5. Jonna Healey

    Jonna Healey Member

    I have a printer I use regularly (a company I used to work for), and have a pretty good deal with them, as we refer clients back and forth. I usually get a quote from the printer (inc. VAT, delivery, proofs etc), add that onto my total invoice cost to the client. Whether they're aware I use a third party printer or not is irrelevant.
    As @Levi said, depending on your VAT status depends on how the tax works. I'm not VAT registered, so I can claim the whole cost back on my returns. If you can find a printer you know is decent and you can trust, see if you can get a good rate from them. A lot of printers I've spoke to are willing to give a slightly discounted rate for their services if you send a lot of work their way.
    Working the other way, the print company I worked with get a quote from me, then add a standard 10-15% on top of that cost for their time (admin time - people usually forget to add at least 15 minutes to each job to account for emails, telephone calls, putting quotes together etc).
     
  6. floriographic

    floriographic Member

    Thanks guys, appreciate your input, that was a big help!
     
  7. Tony Hardy

    Tony Hardy Guest

    Hi Florio,

    I'm set up as a sole trader with Canny Creative and originally found myself in a similar situation to yours. This is how I work;
    - I always take 50% starting deposit on every project (100% if it's under £500.) That way, I'm covered if it all goes belly up.
    - In my contract, I have that "all printing costs must be paid in full before any print work is undertaken."
    - I do all of the design work and invoice for that first. Once that's all signed and sealed I move into the print.
    - I then quote them and invoice them for the print entirely separately to the rest of the job. This keeps things clear in my mind, and gives the client a breakdown of what's costing them what.
    - I always put a markup of 20%-25% on all printed and goods that I source for my clients. I don't tell them this, I just offer to sort out their print, and more often than not, they're happy to have that extra burden alleviated. This allows me to make a little bit of extra profit on the print job. So...
    - I calculate the print costs, calculate what I've invoiced the client, deduct the print costs from the invoice, leaving me with say £100 profit. Then I bang £20 of that away in the "tax account" for the end of year tax bill.
    I don't know if what I'm doing is right or wrong, or morally right or wrong, but the money keeps flowing and my accountant doesn't have any issues with it, so that's what I do.

    ALWAYS put a markup on though, otherwise people start taking the mick.

    And, use Stationery Direct for your printing. Damon is a good guy and to be honest, he does the best deals going on your standard stuff (business cards, letterheads, flyers etc.)
     
    NCRPads.co.uk likes this.
  8. floriographic

    floriographic Member

    Thanks Tony, that was really helpful. I've been missing a trick not putting a mark up on printing because i was worried about making it too expensive and losing work. Had a couple of jobs lately though where i've had to spend ages dealing with nightmare printers so i'm definitely going to do so from now on!

    Speaking of contracts, did you write yours yourself? Have you had it looked over by anyone? I have some T&Cs that i put together myself but i wonder how legally accurate or enforceable they are and feel like i should probably get them checked by a professional.

    I actually had a chat with Damon recently, have used them for a few business card jobs after seeing the offers on here and have been pleased so far!
     
  9. Tony Hardy

    Tony Hardy Guest

    Florio. Replying on my phone so excuse the shortness/accuracy.

    My latest job was for a fully qualified barrister. Turns out we hit it off quite well, as friends as well as client/provider, so he took a look over the contract I have. While he says "don't take his word as gospel, as he's not currently practicing" he made two or three amends and got it back to me. So I'd say my contract is fairly watertight.

    More than happy to share if you like?
     
  10. floriographic

    floriographic Member

    Hey Tony, that would be great if you don't mind.. i can compare it to what i've got then.
     

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