| Pages in topic: [1 2] > | 60+ days after invoicing Thread poster: Erik ERIKSEN
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Erik ERIKSEN 
Denmark
Local time: 11:46
Member (2005)
English to Danish
+ ...
Dear Colleagues, am I the only one wondering why (a few) clients require up to, or exceeding, 60 days to remit payments. EU Directives provide for 30 days!
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Because we're 3rd in line.
Agency has to wait for end-client to pay them, we have to wait for agency to pay us.
| | | | | Because they can | Jan 16, 2017 |
I suppose it's because they can. Apparently, some translators are prepared to accept long payment terms. I'm not, myself. It's best to get everything concerning payment agreed in writing before accepting a job. A few will try to delay payment, even then. In my experience, most clients keep to the agreed terms.
| | | | Erik ERIKSEN
Denmark
Local time: 11:46
Member (2005)
English to Danish
+ ...
TOPIC STARTER
Most agencies will receive payment after 30 days and should be able to pay after 30 days. One big company used the financial crisis to go from 45 days to 60 days. As far as I'm concerned that crisis is history.
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Erik ERIKSEN
Denmark
Local time: 11:46
Member (2005)
English to Danish
+ ...
TOPIC STARTER
Jenny Forbes wrote:
I suppose it's because they can. Apparently, some translators are prepared to accept long payment terms. I'm not, myself. It's best to get everything concerning payment agreed in writing before accepting a job. A few will try to delay payment, even then. In my experience, most clients keep to the agreed terms.
| | | | Tom in London
United Kingdom
Local time: 10:46
Member (2008)
Italian to English
olbec wrote:
Dear Colleagues, am I the only one wondering why (a few) clients require up to, or exceeding, 60 days to remit payments. EU Directives provide for 30 days!
60 days is nothing. I have one client that pays at 90+10= 100 days!
My theory is this:
Imagine you are a translation agency with (say) 100 translators on your books, who invoice you for a monthly average of (say) €1,000. That makes €100K you need to pay out each month.
If, instead of paying out you put that €100K into a 2-month deposit account at a monthly interest rate of 2,50% gross, or net 1,86% including bank charges (which is the best I can find today on an Italian comparison website) you will get a net return of € 299.04.
If you keep that money invested for 3 months, the return is still more. And of course my amount of €100K is only notional.
As for EU Directives, don't make me laugh. I don't know about other countries but in Italy, where most of my clients are, the EU Late Payment Directive was incorporated into Italian Law in such a way as to make it voluntary !!!
[Edited at 2017-01-16 10:30 GMT]
| | | | Tom in London
United Kingdom
Local time: 10:46
Member (2008)
Italian to English
DJHartmann wrote:
Because we're 3rd in line.
Agency has to wait for end-client to pay them, we have to wait for agency to pay us.
That is illegal.
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DJHartmann wrote:
Because we're 3rd in line.
Agency has to wait for end-client to pay them, we have to wait for agency to pay us.
No. That's not the way it works.
It's not a sustainable business model, and you're taking a big risk working with anyone who tries it on like that.
As for reputable agencies pushing for 60 days, I just don't get it. The trivial gain in Tom's example would be more than offset by the loss of supplier goodwill.
I deliver promptly and I expect to be paid promptly, and none of my customers has ever had a problem with that.
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Tom in London wrote:
60 days is nothing. I have one client that pays at 90+10= 100 days!
I cannot have those clients simply because I do not accept those terms, I am not a bank.
No. That's not the way it works.
It's not a sustainable business model, and you're taking a big risk working with anyone who tries it on like that.
As for reputable agencies pushing for 60 days, I just don't get it. The trivial gain in Tom's example would be more than offset by the loss of supplier goodwill.
Exactly!
I suppose it's because they can. Apparently, some translators are prepared to accept long payment terms. I'm not, myself
And exactly
Many (ironic) thanks to those who are destroying the business by accepting 90-120.
| | | | Thayenga
Germany
Local time: 11:46
Member (2009)
English to German
+ ...
| Yes, because they can | Jan 16, 2017 |
As Jenny has stated, some agencies - who practice this - might use this money that they owe the translators to generate interest to increase their profits. I'm sure if a client pays late, the agency charges a fee. Yet they don't accept late payment fees when they're paying late or have long payment terms.
It can work differently. A couple of years ago when I started working with an Asian agency, they insisted that I accepted their payment terms of 60+ days because that was the "norm... See more As Jenny has stated, some agencies - who practice this - might use this money that they owe the translators to generate interest to increase their profits. I'm sure if a client pays late, the agency charges a fee. Yet they don't accept late payment fees when they're paying late or have long payment terms.
It can work differently. A couple of years ago when I started working with an Asian agency, they insisted that I accepted their payment terms of 60+ days because that was the "normal time" translators would wait for their payments in Asia. (I wouldn't know.) When I refused to wait 60 days to receive the payment for jobs I was expected to deliver within a couple of days, the payment terms suddenly changed to... 30 days. ▲ Collapse
| | | | Erik ERIKSEN
Denmark
Local time: 11:46
Member (2005)
English to Danish
+ ...
TOPIC STARTER | Certain clients | Jan 16, 2017 |
But what can you do, if the SLA reads 60 days and you don't want to lose the contract!
| | | | | Some clients pay when their clients pay | Jan 16, 2017 |
olbec wrote:
Dear Colleagues, am I the only one wondering why (a few) clients require up to, or exceeding, 60 days to remit payments. EU Directives provide for 30 days!
Forget about the EU Directive, according to the directive the client and vendor may agree on a different payment term, so you can't use the Directive to corner the agency. Now, the agency stipulating a different payment term unilaterally (and they all do, right?) is another matter. I suppose no translator will insist on a shorter payment term for fear of losing the client.
Many agencies have longer payment terms agreed with their end clients because they handle larger volumes for the end client, for many languages, so in some way it makes sense that they allow 60 days. Like other colleagues here, I don't really agree with that, but that's what I've seen.
What you can do/try is increase your rates to compensate for this interest-free "loan" and give a discount if the client pays early, e.g. in 30 days.
[Edited at 2017-01-16 12:29 GMT]
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Thayenga
Germany
Local time: 11:46
Member (2009)
English to German
+ ...
olbec wrote:
But what can you do, if the SLA reads 60 days and you don't want to lose the contract!
Well, in this case you'd have to accept those 60 days, or try to re-negotiate. I suppose that it also depends on the field(s) you're working in and on how "badly" the agency needs someone to do the job.
In my case, it did take a few emails, but it was worth it, and they didn't try to change payment terms.
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Thayenga wrote:
When I refused to wait 60 days to receive the payment for jobs I was expected to deliver within a couple of days, the payment terms suddenly changed to... 30 days.
This happens very often, we have to negotiate.
| | | | Erik Freitag
Germany
Local time: 11:46
Member (2006)
Dutch to German
+ ...
| I doubt that that is the main reason | Jan 16, 2017 |
Thayenga wrote:
As Jenny has stated, some agencies - who practice this - might use this money that they owe the translators to generate interest to increase their profits.
I strongly doubt that this is the case very often. Instead, I suspect that most of these agencies suffer from a very limited liquidity: They simply don't have the money to pay their translators before their client pays them. Banks may be hesitant to lend the agency any money, and if they do, they charge a considerable amount of interest. Why bother when translators are willing to lend the agency the money for no interest at all? Makes sense to me (kind of).
What imho doesn't make sense is to let them get away with it. I make sure that the small number of clients whom I grant extended payment terms pay for it, and that they can see on the invoice how much they're paying for it. I charge them a lot more than a bank would charge them, and I even charge them a lot more than my bank would charge me for overdrawing my account. If they still insist borrowing the money from me instead of from a bank, so be it - at least I make some extra money that way.
The case could be made that if a bank isn't prepared to lend them any money, why would I? Sometimes I take that risk and cover it by, as I said, charging more than a bank would.
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