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Are we becoming interest-free lenders? How far can payment terms go?
Iniziatore argomento: Gabriella Vento

Gabriella Vento  Identity Verified
Stati Uniti
Local time: 13:11
Membro (2015)
Da Ungherese a Inglese
+ ...
Jul 13

I know that outsourcers have overhead expenses.
I am aware, that - in case of large projects - clients need some time to make sure there are no errors in translation. Nevertheless, it is hard to understand how could reputable, ethical translation agencies hold back payments for a lot longer, than the reasonable waiting time.
First it went 30 days from 15 net for larger projects. Then it become 45. Now we are facing 60 days payment terms, and slowly, but surely it has been extended to any size of jobs. So we submit the work for deadline, issue the invoice and wait for 60 days for the compensation, while the companies are using our money - interest free.
Dear colleagues, don't you think this is unethical?
I would suggest 30 days, as the absolute maximum for payment term.

[Edited at 2018-07-13 14:31 GMT]

[Edited at 2018-07-13 14:43 GMT]


Josephine Cassar
Morano El-Kholy
 

Josephine Cassar  Identity Verified
Local time: 22:11
Membro (2012)
Da Italiano a Inglese
+ ...
The other problem is Jul 13

The other problem is that we are unsure we really are, in the end, going to get paid and waste such time and energy chasing agencies for payment. It is no use being told 'But we always paid you'. There is always a first time. I find it most unfair.

[Edited at 2018-07-13 14:51 GMT]


Morano El-Kholy
 

Teresa Borges
Portogallo
Local time: 21:11
Membro (2007)
Da Inglese a Portoghese
+ ...
@Gabriella Jul 13

I do agree with you, 30 days should be the absolute maximum, but the reality is quite different. I must say first of all that I have one very dear long-standing customer who for over 20 years has been paying like clockwork the day after receiving my invoice, some clients pay at 30 days, others at 45 days and one or two at 60 days. Of course I had occasionally to chase payment (two non-payment cases solved some years ago after my lawyer's intervention, two other cases solved with Proz staff intervention). Quite recently I’ve been having trouble with a British translation agency: what once was a well-oiled machine suddenly comes crashing down, no POs issued, no payment since March and the list of excuses has been so long that they could probably offer a course in creative writing…

Gabriella Vento
 

Gabriella Vento  Identity Verified
Stati Uniti
Local time: 13:11
Membro (2015)
Da Ungherese a Inglese
+ ...
AVVIO ARGOMENTO
Blue Board is very helpful tool to prevent most payment issues Jul 13

Josephine Cassar wrote:

The other problem is that we are unsure we really are, in the end, going to get paid and waste such time and energy chasing agencies for payment. It is no use being told 'But we always paid you'. There is always a first time. I find it most unfair.

[Edited at 2018-07-13 14:51 GMT]


I had outsourcers, like that as well, one of them still owes me after 13 jobs they have payed in time previously. There are risks involved here, like with most other kind of businesses. Nevertheless, most non-payers can be identified with a Blue Board check. If the rating is low I request payment in advance, or in "milestones", in some cases it is even accepted.


 

The Misha
Local time: 16:11
Da Russo a Inglese
+ ...
They can only go as far as you let them Jul 13

If you don't like the terms, don't accept them. Find a different client. Or find something better to do. You are the business owner here. You get to decide.

Whoever it was who first said that your are only a victim the first time, then you are a volunteer...


Sheila Wilson
Yvonne Gallagher
Angie Garbarino
Christine Andersen
Stefano Papaleo
 

Josephine Cassar  Identity Verified
Local time: 22:11
Membro (2012)
Da Italiano a Inglese
+ ...
Well, well Jul 13

@ Gabriela: Sometimes you have to take the BB with a pinch of salt, not always mind you but just sometimes. The company concerned would not have contacted me again if I had not done well so it was a question of lowering rates 'to be competitive'. Only less experienced translators will accept and they'll have a huge job proofreading their work instead of just going over and approving it.

 

Sheila Wilson  Identity Verified
Spagna
Local time: 21:11
Membro (2007)
Inglese
+ ...
It's up to us Jul 13

If you accept 60 days they aren't likely to pay sooner. So if 60 days is unacceptable you need to either negotiate a better deal or refuse to work with them. I know it isn't always practicable to refuse, but you have to realise the message you're giving them every time you grudgingly accept. I personally have had some good relationships with clients who have had 45-day terms, but each time I've gone against my better judgement and collaborated on the basis of 60 days, the client has STILL needed reminders. It's bad enough havng to chase after 30 days; after 60 it's a very unfunny joke.

Nikki Scott-Despaigne
Angus Stewart
neilmac
Iris Schmerda
Giray Türkmen
José Henrique Lamensdorf
Angie Garbarino
 

Nikki Scott-Despaigne  Identity Verified
Local time: 22:11
Da Francese a Inglese
60 days is also risky Jul 13

Rich or poor, 60 days is too long to wait. I no longer accept that sort of deadline for payment, although it is still very common in France. If a client has cash-flow problems of goes out of business, it means you might only know it two months down the line. It's no for me, in spite of having had a couple of very reliable clients who pay at 60 days, rotten rates but reliable nonetheless. It's just too darned long to wait.

[Edited at 2018-07-13 20:45 GMT]


Vera Schoen
Iris Schmerda
Gabriella Vento
Angie Garbarino
Yvonne Gallagher
 

Kay-Viktor Stegemann
Germania
Local time: 22:11
Membro (2016)
Da Inglese a Tedesco
Risk accumulation Jul 13

I think the main problem with long payment terms is the accumulation of risk. Let's say you have a regular customer like an agency where you write an invoice every month with all the work you did. Now, when the payment terms are 60 days (or when they are 45 days and the customer does not keep them), this means that when you write the March invoice, the January invoice is still not paid. You have three invoices outstanding at the same time!
This is an unhealthy accumulation of risk. You are a creditor to the customer and there is always a certain risk that your debtor defaults. At some point you would have to decline further work for this customer until the next due invoice was paid, so that too much risk concentration is avoided. This is also not in the best interest of the customer. For "regulars" like in this scenario, a 30 days payment term is ideal for business continuity and trust: one invoice is created while the previous one is paid at about the same time. A natural rhythm, in a wayicon_smile.gif

Edit: Nikki beat me by 5 minutes on this thought ...

[Edited at 2018-07-13 20:51 GMT]


Gabriella Vento
Iris Schmerda
Vera Schoen
Nikki Scott-Despaigne
José Henrique Lamensdorf
Angie Garbarino
conejo
 

Gabriella Vento  Identity Verified
Stati Uniti
Local time: 13:11
Membro (2015)
Da Ungherese a Inglese
+ ...
AVVIO ARGOMENTO
30 days Jul 13

Thank you for all your responses.
Non-payment issues are more likely with companies with extensive payment terms, I can totally agree that.
Also, Blue Book rating is not the only thing to pay attention to. The reviews (whole story or just a one-line praise) the average rating given to other outsourcers by the translator, who is giving extremely good or bad review, also the reply from the the outsourcer (or the lack of it).
As a conclusion I suggest, as a general principle 30 days, as an acceptable maximum for payment term. I also suggest to include this into the professional guidelines for translation companies.


 

neilmac  Identity Verified
Spagna
Local time: 22:11
Da Spagnolo a Inglese
+ ...
Wishful thinking Jul 14

After having worked for decades with Spanish companies, and seeing how some of them really had to struggle to make payments, especially the smaller ones, I have become resigned to occasionally having to wait for even longer than 90 or 120 days for payment. Before getting into full-time translation, I was working in TEFL. When working on government or EU sponsored courses, the hourly rate was occasionally 4 or 5 times higher (or more) than you would normally get working for academies or doing private classes, but the snag was that sometimes we had to wait for over a year to get paid. There was nothing we could do about this; it was a case of like it or lump it. Eventually, many of the people running these courses were prosecuted for fraud and corruption, and in fact some of the cases are still lumbering on after almost a decade.

Here's one that's still going on, but that is just the tip of the iceberg:
https://valenciaplaza.com/el-juez-procesa-a-cierval-y-a-la-cec-por-el-fraude-en-los-cursos-de-formacion

Etc...
http://www.publico.es/politica/ccoo-denuncia-presunto-fraude-cursos.html


Over time, I have come to regard the due date on my invoices as a sort of wishful thinking. This way, when the clients do eventually pay up, it's almost like winning the lottery, and cause for celebration. One of my long-standing clients, a small market research business, recently paid me 50% of a bill issued in January after a five-month wait. A couple of weeks ago they approached me for a new project and I mentioned the outstanding half of that invoice (not to mention another couple of smaller bills outstanding since March or April), and I think they've now managed to pay the other half of the January one. I know they'll pay me eventually. I other hand, I have other clients who do settle their bills more promptly, and thanks to them I can continue to work with the bad payers without getting my knickers in a twist.

[Edited at 2018-07-14 09:57 GMT]

[Edited at 2018-07-14 09:59 GMT]


Edward Potter
 

Edward Potter  Identity Verified
Spagna
Local time: 22:11
Membro (2003)
Da Spagnolo a Inglese
+ ...
Depends on the situation Jul 14

There is sort of an art to this. If the customer checks out well, but pays after 60 days, you might want to just live with them.

If the customer is reliable but is known to pay late, you can just raise your rates to reflect the lost interest you would have had on the money. I would prefer this method over tacking on a late fee to the bill.

In the end, you don't have to do business with anyone you don't want to.


Nikki Scott-Despaigne
neilmac
 

neilmac  Identity Verified
Spagna
Local time: 22:11
Da Spagnolo a Inglese
+ ...
Late payment update Jul 15

Yay! My late payer client has paid the 50% outstanding since January! "Tonight we eat food, not fingernails"...icon_smile.gif

 

Gabriella Vento  Identity Verified
Stati Uniti
Local time: 13:11
Membro (2015)
Da Ungherese a Inglese
+ ...
AVVIO ARGOMENTO
The primary criteria of a customer Jul 15

Edward Potter wrote:

There is sort of an art to this. If the customer checks out well, but pays after 60 days, you might want to just live with them.

If the customer is reliable but is known to pay late, you can just raise your rates to reflect the lost interest you would have had on the money. I would prefer this method over tacking on a late fee to the bill.

In the end, you don't have to do business with anyone you don't want to.


Edward,
In my opinion the primary criterium of a client's appreciation in any business relationship is the payment in time. Not sure, how can a client "check out well" if pays late. (of course there are special circumstances between companies, when one party helps out the other by agreeing on payment at a later date, but freelancers are usually not in the position to lend this way to translation agencies.)
Raising rates works only in an environment with no competition. Do you know a place like that?
Well, we certainly can and do choose our clients when the demand is larger, than the supply of available translators in a given time period. For the rest of the time we compete for jobs and don't have this luxury.


[Edited at 2018-07-16 11:35 GMT]


 

Christine Andersen  Identity Verified
Danimarca
Local time: 22:11
Membro (2003)
Da Danese a Inglese
+ ...
30 days is max. in northern Europe Jul 16

I work with clients in Scandinavia and the UK most of the time, sometimes from Germany. One very good client from Spain always pays within 30 days, and I would not accept longer terms.

In practice clients often get more time, because I issue all my invoices at the end of the month, so work done early in the month is invoiced some time after the job was delivered. But my terms are 30 days from the invoice date, and I send a reminder immediately after that if I have not been paid.

I think that is plenty of time for an agency to find the money. They should know where it is coming from before they even place the order - otherwise they are technically insolvent and should not be trading at all.

In fact if the job is large, or the translator is working for a new client, some colleagues advise asking for part payment up front, i.e. before they even start work! I ask for payment by instalments on the rare occasions when a job lasts more than a month.

I think it gives the impression of a 'pocket-money job', not a profession, if payment is delayed too long. How many other professions wait for months to be paid? If translators want to be taken seriously and not regarded as amateurs and housewives who make their living from other day jobs, they have to charge and invoice accordingly. (And deliver accordingly, but it seems that most are quite good at that!)

What are translators supposed to live on while waiting for payment? Leave money-lending to the banks!


Jennifer Forbes
Gabriella Vento
Yvonne Gallagher
conejo
 
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