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Is it normal to wait 60 days for payment to be processed?
Auteur du fil: Jennifer Norman
Michael Newton  Identity Verified
États-Unis
Local time: 12:44
Membre (2003)
japonais vers anglais
+ ...
60 day pay period Nov 16, 2016

Some agencies, upon receiving payment from the end-client, will park the funds in an interest-bearing account for 30, 60 or 90 days and then pay the translator. If you don't mind being a cash cow for the agency, by all means accept.

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Max Deryagin  Identity Verified
Russie
Local time: 21:44
Membre (2013)
anglais vers russe
- Nov 16, 2016

Annamaria Amik wrote:

Max Deryagin wrote:

Tom in London wrote:

I work with an Italian agency in Milan that pays after 100 (one hundred) days without being reminded and another in Rome that pays after 90 days and usually needs a reminder. But they do pay. I'm not happy about this but so long as I have an income stream from a range of different clients, I don't lose any sleep about these two, although I dream of the day when I will be so well supplied with other clients that I can tell them both to get lost.


Well, I'll have you know that both of these break the EU law, unless they pay you the corresponding interest (8.05% yearly for Italy). As mandated by the Late Payments Directive 2011/7/EU, the payment period for businesses must not exceed 60 days from the date of safe invoice receipt.


Max, this is a bit inaccurate. 60 days is the general rule, but not the only one:

"It should therefore remain possible for the parties to expressly agree on payment periods longer than 60 calendar days, provided, however, that such extension is not grossly unfair to the creditor." (Article 13 of the Preamble of the Late Payments Directive)
Member States shall ensure that the period for payment fixed in the contract does not exceed 60 calendar days, unless otherwise expressly agreed in the contract and provided it is not grossly unfair to the creditor within the meaning of Article 7. (Art. 3(5))

That said, I think we can say a freelancer actually depends on any particular invoice for subsistence (unlike businesses, in most cases), so an extension beyond 60 days may be deemed "grossly unfair" to the creditor.


Ah, yes, thanks for the correction.


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Tom in London
Royaume-Uni
Local time: 17:44
Membre (2008)
italien vers anglais
All know Nov 16, 2016

Max Deryagin wrote:

.... I'll have you know that both of these break the EU law, unless they pay you the corresponding interest (8.05% yearly for Italy). As mandated by the Late Payments Directive 2011/7/EU, the payment period for businesses must not exceed 60 days from the date of safe invoice receipt.


I'm sure we all know that, Max.


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Kirsten Bodart  Identity Verified
Royaume-Uni
Local time: 18:44
néerlandais vers anglais
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Well Nov 16, 2016

I once received payment terms from an agency's end client by mistake and the new invoicing rules for the agency demanded that they invoice 45 days after job completion, I think it was. To be processed in I think another 30 days. And from where I was sittting, there didn't seem to be any option of renogatiating this. It was along the lines of 'we hereby notify you of our new invoice processing system. Deal with it.'

Of course it depends on the end client themselves and some will pay the day after they receive their translation, but with what I assume to be a growing group of businesses who act like the anonymous one above (which was not a really minor one at all, I can tell you that), it is no surprise to me that agencies need to extend their terms, by hook or by crook.

That said, in Germany some still abide by the ridiculous 14 days, or even worse 'without delay'.


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Sheila Wilson  Identity Verified
Espagne
Local time: 17:44
Membre (2007)
anglais
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Do your invoices reflect the terms of your clients? Nov 16, 2016

I'm wondering how you all deal with this. My invoices reflect my own terms, not my client's. They are all for 30 days month end. As I prefer to invoice on the last working day of the month in most cases (to streamline the admin), this can mean that the payment term for jobs received early in the month is anything up to 60 days. But that's my choice. If an agency client needs more time to pay than that then I'd be wondering why. If they don't have the cash to pay within 30 days month end then I'd query whether they'd have it at 60 days, or 90... Not a good prospect, IMHO.

Do you start every day by checking which invoices were due that day? And which need to be chased because they're n days overdue? I just have a couple of set days in the month for those checks. It sounds a real time-guzzler to do it any other way.


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José Henrique Lamensdorf  Identity Verified
Brésil
Local time: 13:44
anglais vers portugais
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The cash cow Nov 16, 2016

Michael Newton wrote:

Some agencies, upon receiving payment from the end-client, will park the funds in an interest-bearing account for 30, 60 or 90 days and then pay the translator. If you don't mind being a cash cow for the agency, by all means accept.


Have you ever thought about why so many people who don't know squat about translation set up a translation agency?

The reason is that, if played right, it is possible to develop a relatively wealthy business without any significant investment. One computer, Internet access, and a web site will suffice to get started. They can get labor from a cohort of unemployed, underemployed or retired bilingual people worldwide, whose expected compensation is uncertain, hence manipulatable. Then they can add a colossal markup/profit to reach average "retail" prices.

One key element in this game is cash flow, since there is barely any capital. They sell these people's work charging up-front, or COD at worst, and then pay them in 30, 60, 90 or more days... with the money from the NEXT job! This allows them to lead a somewhat ritzy lifestyle from merely pushing computer files back and forth between end-clients and translators.

Visually, it's like charging toll from those who cross a bridge, and pocketing the money, while translators are what is holding the bridge up. As they have both hands busy holding the bridge up, they can't be paid right away.

The assumption that keeps this business model going is that demand for translation will be always increasing. If it ever goes down, the money from the next job won't be there, and they'll have no means to pay translators. They'll eventually get blacklisted, and might have to restart under a new name, unless they can still find new patsies who are so desperate for a gig that they skip the background check on who they are doing business with.

Of course, not so many translation agencies operate under this model; there are professional ones too. However as similar practices will enable a professional agency to significantly reduce the capital required for accelerated growth, they join in. This becomes obvious in entire countries, where the standard market practice is to pay translators (at least) 60 days later. Typical examples are the European peninsulæ, Italia and Iberia.

European islands use it to leverage their business. I had the chance to discuss it over the phone with the sulky CEO of one of the largest translation agencies headquartered in the UK. He told me that to get more and more clients, he offered translation services to end-clients with payment terms of 90, 120, or more days. He didn't mention it, but his attitude implied that he saw nothing wrong in using his translators' (and not the agency's own) money to fuel his marketing act.

In many countries, interest on loans only becomes visible when the amount involved is really huge. Not in Brazil, where I live, and where it is usually in the 15~20% per MONTH range. So I keep my translation cost and the financial costs separate. This means that clients accepting shorter payment terms will get significant discounts from me on the total cost... equivalent to what it would take years of accrued interest in their country.

My guideline is that while I strive to offer the best possible value as a professional translator, I don't mind at all being branded as the worst financial services provider around. Not my turf!


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Philippe Etienne  Identity Verified
Espagne
Local time: 18:44
Membre
anglais vers français
longer payment terms= increased risk Nov 16, 2016

and increased risk=increased premium, insurance companies would say.

I used to have a returning agency customer who assigned me a lot of work every month, and then they went bankrupt out of the blue (post-9/11), after more than one year of continued business.
But I was still a rookie. Had they had a better term than their 60-day "end-of-month" policy, I likely wouldn't have lost as much as 3700 euros of invoices. I didn't get any money back from the liquidation 5 years later.

So extended payment terms may not make much difference, except when it does. I learned my lesson.

Philippe

[small edits]

[Edited at 2016-11-16 10:28 GMT]


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Tom in London
Royaume-Uni
Local time: 17:44
Membre (2008)
italien vers anglais
Agreed Nov 16, 2016

I agree with the above. Put more briefly:

Say:

I have 100 translators on my books and I owe them a total of €100,000.

I put that €100,000 in a Deposit account for 3 months and then make you wait a few days more before I pay you.

The interest pays my rent and expenses! (and of course, they are also tax-deductible)

I hate working with agencies like that, but what can you do?

-------------

And here is a message for those agencies (yes, I know you read these forums):

One of these days I am going to tell you to **** off.


- if anyone wants to know which are these 2 agencies, ask me in private

[Edited at 2016-11-16 10:28 GMT]


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Tony Keily  Identity Verified
Local time: 18:44
italien vers anglais
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Payments in Italy Nov 16, 2016

I can echo what Tom is saying here about Italy.

My Italian agencies generally pay about 70 days after the end of the month of invoice. Some of this may be a throwback to the years when the inflation rate ran into double figures, so paying three months late was quite profitable. I have some sympathy for them, since it almost certainly takes even longer for them to collect on their own invoices: specially in recent years the real problem in the service sector here has been collecting, rather than a drop-off in volumes of work.

On the other hand, I've dropped or deprioritised a number of slow-paying agencies, so in theory they should suffer competition-wise if they don't improve their practices and if others do likewise. In theory!


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Teresa Borges
Portugal
Local time: 17:44
Membre (2007)
anglais vers portugais
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Payment terms Nov 16, 2016

It depends on the agreed payment terms! I have one very dear long-standing customer who for over 20 years has been paying like clockwork the day after receiving my invoice, most of the others pay at 30 days, one or two at 60 days and of course I had occasionally to chase payment (two non-payment cases solved some years ago after my lawyer's intervention). I must say though that I’ve been noticing that most clients in Europe are paying faster than before: could it be a positive effect from the EU Late Payment Directive?

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Tom in London
Royaume-Uni
Local time: 17:44
Membre (2008)
italien vers anglais
Alas Nov 16, 2016

Teresa Borges wrote:

It depends on the agreed payment terms! I have one very dear long-standing customer who for over 20 years has been paying like clockwork the day after receiving my invoice, most of the others pay at 30 days, one or two at 60 days and of course I had occasionally to chase payment (two non-payment cases solved some years ago after my lawyer's intervention). I must say though that I’ve been noticing that most clients in Europe are paying faster than before: could it be a positive effect from the EU Late Payment Directive?


Alas, the way in which the EU Late Payment Directive has been incorporated into Italian Law means that it can be ignored.


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MaggieW  Identity Verified
France
Local time: 18:44
Membre (2015)
français vers anglais
+ ...
Reliable is more important than fast, for me Nov 16, 2016

I'm wondering how you all deal with this (...)
Do you start every day by checking which invoices were due that day? And which need to be chased because they're n days overdue? I just have a couple of set days in the month for those checks. It sounds a real time-guzzler to do it any other way.

I use a free online invoicing tool. When I set up a new client account I specify the payment period, then each time I generate an invoice for that client, the tool automatically calculates the date when payment is due. If the invoice is not marked as paid when that date arrives, it's automatically flagged up as overdue. So there is no manual checking to do and it takes less than a minute to log on, bring up a list of outstanding invoices and see which, if any, are flagged as overdue.

I really don't mind if the client's preferred terms are 60 days or on receipt. The important thing for me is that they keep to those terms, so that (a) I can manage my own cashflow an (b) I don't have the hassle of chasing.

[Edited at 2016-11-16 12:38 GMT]


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Tom in London
Royaume-Uni
Local time: 17:44
Membre (2008)
italien vers anglais
Not me Nov 16, 2016

MaggieW wrote:

I'm wondering how you all deal with this (...)
Do you start every day by checking which invoices were due that day? And which need to be chased because they're n days overdue? I just have a couple of set days in the month for those checks. It sounds a real time-guzzler to do it any other way.

I use a free online invoicing tool. When I set up a new client account I specify the payment period, then each time I generate an invoice for that client, the tool automatically calculates the date when payment is due. If the invoice is not marked as paid when that date arrives, it's automatically flagged up as overdue. So there is no manual checking to do and it takes less than a minute to log on, bring up a list of outstanding invoices and see which, if any, are flagged as overdue.

I really don't mind if the client's preferred terms are 60 days or on receipt. The important thing for me is that they keep to those terms, so that (a) I can manage my own cashflow an (b) I don't have the hassle of chasing.

[Edited at 2016-11-16 12:38 GMT]


I don't find it satisfactory at all.

I deeply resent the fact that a number of agencies, instead of paying me promptly for work well done and delivered on time, are withholding payment and retaining the money for three months, presumably in a high-interest bank account, as a way of funding their own business. I find that completely disgraceful.

[Edited at 2016-11-16 12:43 GMT]


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Georgie Scott  Identity Verified
France
Local time: 18:44
Membre (2009)
français vers anglais
+ ...
Not unusual Nov 16, 2016

Tom in London wrote:


And here is a message for those agencies (yes, I know you read these forums):

One of these days I am going to tell you to **** off.




I work for a few agencies with 60-day end-of-month payment terms, 10 years later I have got into the rhythm. The only advantage is that if I have a really quiet month I have two months to try and pick up work that will be paid before I run into difficulties with rent, etc.

It can be tricky, however, when you have a policy of not completing more than one project for a new client before being paid.

And obviously huge agencies with high turnover are simply earning interest on the money earned from your work. But such is life. Sociopaths vs the rest of the world.


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Mirko Mainardi  Identity Verified
Italie
Local time: 18:44
Membre
anglais vers italien
+ ...
End-Clients vs. Agencies Nov 16, 2016

Sheila Wilson wrote:

I'm wondering how you all deal with this. My invoices reflect my own terms, not my client's. They are all for 30 days month end.


Lucky you... But does this apply to end-clients AND agencies? And, did all of your prospective clients just accept your terms, changing theirs?

In my case, ALL of the agencies I've dealt with so far seemed to have their own terms and very few of them were willing to discuss/amend the provisions their lawyers had so carefully craft(y)ed. I recently "lost" (actually "regretfully decided to lose") two new clients after they had accepted my rates and all, because I didn't agree with some of the clauses set in those infamous NDAs/SLAs of theirs and they were apparently unwilling to discuss/change/omit them. Unfortunately, even some end-clients behave like that...


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