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[English] Sound Design: the Financial Part

Financial knowledge of the sound design business is extremely important in order to really pursue a career.

Today there are a variety of university institutions that have careers related to sound design and audio engineering. Although most curricula focus on the technical and practical part of the career, they rarely address sound design as a business that can be economically profitable.

Financial knowledge of the sound design business is extremely important in order to really pursue a career.

In this article I would like to address some aspects related to the financial and organizational part.

There are three main ways of working and/or hiring.

Self-employed/Freelance

You could say that most sound designers handle themselves this way. Being freelance means that you have to find your own clients and that you are in charge of both the financial and the organizational part of the work.

In these cases, it is necessary to have your own equipment and adequate working space.

This form of contracting means that the projects are paid for by means of agreements established by the parties involved. It usually happens that an advance is requested and that payment is completed once the work has been carried out.

It should be borne in mind that in this case, money management is extremely important, since the expenses incurred in carrying out the work (hiring of third parties and/or required equipment) will be at your own expense. Therefore, it is very important to make a budget as detailed as possible, taking into account all the needs that may arise.

As a freelancer, you must pay close attention to the taxes you have to pay, make sure you keep accounts that allow you to pay them on time, which will ensure job stability and simplify the relationship with customers or potential customers.

Depending on the form of contracting, we must be aware of the contracting requirements that vary according to the country or the company. Therefore, it is necessary to know in advance the different tax forms for each case.

It is also important to have different forms of payment, bank transfer, deposit, payment systems via Internet, money transfers, etc., and mainly, to have very clear what cost each service has for both who receives the money and for who deposits or makes the transaction. In these cases, depending on the amount, the percentage of the service cost will vary, and it also depends on the sending and receiving countries. This is not exact, everything always depends on variables so we must always be very attentive.

In view of the above, it is necessary to clarify the form of payment with the contracting party from the outset. Since it is often assumed that the most practical form is bank transfer (mainly if one is in Europe), despite this, this form has a higher cost in Latin America. For this reason, it is of vital importance that before submitting a proposal, you study the best possibility of receiving payment for the work.

At the same time, as an independent professional, a form of invoicing must be developed that is useful for both the payment of taxes and for the client, so an accountant must be consulted to ensure that the corresponding taxes and the appropriate form of invoicing are being taken into account.

In addition, it is important to organize the different jobs. It is almost always the case that several orders arise at the same time, and meeting delivery times is extremely important, so the organization itself will be key to carrying out each of the projects and succeeding.

Independent Contractor for Study

In this case, although one remains independent and bears all the fiscal responsibility of a freelance wok, the point is that one does not go out looking for clients.

In these cases it is the studio that hires the sound designer independently for their own project.

This type of relationship usually occurs once one has worked for that company and is a satisfied client, who takes the sound designer into consideration for subsequent work on the studio’s various projects.

In this case the handling of the communication is essential, since on a fluid dialogue, the hiring for new works will depend.

Payment methods are usually staggered:

  • For sound design made.
  • Billing for working hours.

A budget is usually presented, which as the project progresses, usually changes according to the development of the project and the needs.

In these cases the budget must contain both working hours and specific technical requirements. Since it is likely that many of those working hours will not be for editing or recording (i.e. in the studio) but will be used for production meetings.

For this it is necessary to take into account transfers and per diems, which can be included in the budget to be presented or taken into consideration for the internal budget.

In my experience it is important to make two budgets, one that is presented to the company and another for us, internal, with the breakdown of expenses. This helps us to control the expenses in a precisely detailed way.

If you work for the same company, it is easier to know how projects are organized (how many production meetings are required, how many changes are usually made and as there are always changes, this must be taken into consideration, how delivery times change, you will know the team and their ways of working) all this will have a cost that must be taken into account when making the budget.

Although this type of contract is based on the knowledge of the parties and on trust, it is extremely necessary to make a contract or require an advance that contemplates half of the fees + the total cost of production.

It must be taken into account that many independent projects are left behind (mainly in their forms of financing) and if one does not at least cover the costs of production, one is likely to lose money.

It is extremely important to make clear the delivery dates, the amount of possible changes that are within the budget and the forms of payment always in writing.

Employed Personnel

This position is increasingly rare to find but not impossible. The big companies -mainly video games- require stable personnel for a financial and legal advice or secret, of their new releases. With a stable staff they ensure that there are no leaks in the market as contracts usually stipulate this type of aspect.

In these cases an audio professional can be paid monthly or charged by project or working hour. The company is in charge of the accounting part of the payments and the invoicing procedures. The company withholds taxes from each payment and provides you with a tax return at the end of the year.

Although this type of work is usually the most stable, it often happens (and we rarely talk about this) that as a professional one cannot work in parallel on independent projects, either because the contract stipulates that one works only for the company’s products or because times do not allow room for others to be done independently.

On the other hand, most companies require their workers to move and be close to the production or project site, which may vary depending on the progress of the project or new projects. As hired personnel, they must generally be available to the company.

Hiring in this style has benefits and advantages that other forms of work do not. In turn, in these cases the studio and/or workplace, along with all the necessary equipment, is provided by the contractor.

The Ideal vs. Reality

These are the ideal working frameworks, the truth is that it does not always happen or is possible to work in these ways.

However, being clear, as a worker, about how to best organize to get the most out of the work is always an advantage in our favor.


Author: Sol Rezza
Editor | Corrector: Franco Falistoco
@ 2020

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