Sloppy Bookkeeping: The Uniphoto Experience

Posted on 12/18/2007 by Jim Pickerell | Printable Version | Comments (0)

Commentary

Given recent questions concerning Photolibrary/Indexstock bookkeeping issues, it's worth exploring some problems that can arise when a agency like Indexstock keeps sloppy books.

In 1989, a group of photographers suspected Uniphoto, a Washington, D.C. agency, of not paying photographers in full. Regular payments to top producers had become less frequent. Photographers only got paid when they called and specifically asked for a statement. A few major suppliers banded together and forced the owners to make records available in order to reconcile royalty payments with gross revenue received. I was charged with supervising this effort.

The first thing we did was look at gross revenue the agency received the previous quarter, and compare that with gross royalties paid. The agency was taking in about $250,000 a quarter and the combined total they were paying out to all their photographers was less than $50,000, even though photographers were supposed to be getting 50% commissions.

There were unreliable computer records that didn't always match paper invoices. Upon examining the paper records, we found invoices missing for over $50,000 in cash receipts. In some cases, art directors who worked on the projects were gone and tracking images was impossible. Some of the invoices had descriptions of usage like "five images for brochure at  $250 each." There was no itemization of images ownership. Thus, it seems unlikely any photographer received a royalty. Record keeping was often sloppy, descriptions were poor, a photographer's name was missing. As a result, gross revenue from these invoices went into the agency's pocket.

The sales staff earned commissions based on the gross invoices sent out in a month, regardless of when they were paid. Thus, once the invoice was out the door, there was little incentive to follow up and make sure photographers were paid.

I had two people working two months on this project. They examined 12 months of paper invoice records. A quarter was ending when we finished our examination. We determined that Uniphoto had sales of about $250,000 in the quarter and would owe the photographers about $125,000. The company had $25,000 in the bank and owed  employees about $20,000 for the two-week period about to end.

I asked the CEO how he managed to get by without paying anybody. He said, "Everybody thinks it was just a bad quarter for them. If they call, then I pay them about what they got the previous quarter (regardless of what they are really owed) and that keeps them happy." Take note: the agency was doing lots of marketing, and the CEO was driving a Porsche so it looked successful. Every photographer thought it was just his/her images that weren't selling.

At this point, photographers forced the sale of Uniphoto to Pictor. Based on the one-year records we developed, Pictor offered a plan to repay in monthly installments over a two-year period.. No one determined what hadn't been paid for the previous years. Pictor met their obligation and then, it is believed, paid photographers as badly as Uniphoto. Pictor later went into bankruptcy and was absorbed by ImageState, which has been absorbed by Heritage Partners.

So Why This Story Now?

I have no images with IndexStock or Photolibrary, but based on conversations with photographers and information publicly available, I think a lot of what happened at Uniphoto was also happening at the old IndexStock before Photolibrary took over. Photolibrary has a big mess to straighten out, but it is my impression the owners are honest, ethical and doing as good a job as anyone could expect.


Copyright © 2007 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

Comments

Be the first to comment below.

Post Comment

You must log in to post comments.

Stay Connected

Sign up to receive our FREE weekly email listing new stories posted.

Follow Us

Free Stuff

Recent Stories – Summer 2016
If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
Read More
Corbis Acquisition by VCG/Getty Images
This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
Read More
Finding The Right Image
Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
Read More
Where Is The Stock Photo Industry Headed?
For new readers, or those who may have missed some of what I have written over the last few months, the following are a list of stories worth looking at to get a sense of where the industry is headed.
Read More
Photography As A Career
It’s that time of year when high school seniors are waiting for college acceptance letters and thinking about future careers. If you know someone who is thinking about photography as a career you mig...
Read More
2014 Stories You May Have Missed
For many the end of the year is a time to review past experiences and consider whether it makes sense to chart a new course in the year ahead. Stock photography has changed dramatically for professio...
Read More
More Stories In 2014 You May Have Missed
Every so often I put together a list of the most important stories we’ve published in the recent past. If you are engaged in the business of stock photography the links below are to stories that we’v...
Read More
Getty: A Three Month Review
In all the excitement about 35 million FREE images it is worth looking back at some of things that have been happening at Getty Images in the last three months. After watching revenue decline for the...
Read More
State Of Stock Photo Industry: 2013
If you’re looking for an overview of the state of the stock photo industry as of October 2013 the stories listed below are a good place to start. Regular readers of Selling-Stock will have seen all t...
Read More
Education Market Shifts To Digital
If supplying pictures for educational use is a significant part of your business plan you need to be aware of how the market is trending toward digital delivery and how that is likely to affect the p...
Read More

More from Free Stuff