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Is it normal to wait 60 days for payment to be processed?
Auteur du fil: Jennifer Norman

José Henrique Lamensdorf  Identity Verified
Brésil
Local time: 11:00
anglais vers portugais
+ ...
My geography is different Nov 30, 2016

Tom in London wrote:

Chris S wrote:

....I wouldn't accept this from a Northern European customer. No experience of Southern Europe, I'm afraid....


Is all of France in Southern Europe or Northern Europe, or is it half and half, and if so, where's the split?


From across the Atlantic, I see abusively extended payment terms as a peninsular effect, occurring mostly in Italia and Iberia. Perhaps it has to do with the I...ia structure of the names.


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Tom in London
Royaume-Uni
Local time: 15:00
Membre (2008)
italien vers anglais
Lyon? Nov 30, 2016

So do people start being dishonest somewhere south of Clermont-Ferrand?

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Robert Rietvelt  Identity Verified
Local time: 16:00
Membre (2006)
espagnol vers néerlandais
+ ...
Didn't read the whole forum, but.... Nov 30, 2016

.... 60 days waiting for your payment is of course idiotic, but unfortunately also normal. I start making noise after 2 months!

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Chris S  Identity Verified
Royaume-Uni
Membre (2011)
suédois vers anglais
+ ...
The big divide Dec 1, 2016

Tom in London wrote:

Chris S wrote:

....I wouldn't accept this from a Northern European customer. No experience of Southern Europe, I'm afraid....


Is all of France in Southern Europe or Northern Europe, or is it half and half, and if so, where's the split?


Halfway down Belgium I would guess...


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Hewhotranslates
Local time: 07:00
anglais vers allemand
+ ...
Even 30 days is ridiculous May 4

Why do you accept this trap that can ruin a small business? I stoppped doing this years ago, and it still annoys me to see translators accept this scam serving as examples.

Do you consider yourself a professional or a student?
Do you need the money or do you do this as a hobby? Why don't you make sure you are treated like a professional? 30 days, 45 days or more is an old hat in this day and age. Just because others do it, you risk being ruined?

It's the 21st century, Internet! Hello?! We are Internet-based service providers, usually not even knowing our clients. How can you grant them such loans??? A bank runs credit checks if it loans you $50.

Do you download the latest MS Office Suite and tell Microsoft you will pay in 45 days? Do you tell Amazon you'll pay them in 30 days? Even your hairdresser is a better business person.
Why do you grant the same company a 30-day loan that wouldn't do anything without being paid in advance?

It's time to start going with the times. Act like a professional. Those large agencies have the big clients and are successful at YOUR expense. They have the cash flow and you don't because they don't pay you until they are paid. Stop doing it.
If a company can't afford buying your services (meaning paying in advance, or at least 50% and the remainder right upon delivery) and need your loan, then maybe their business model isn't working, and maybe you should be the one to serve those big clients directly. It's as simple as that.
Start acting like a professional entrepreneur, and you'll have the cash flow.


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Tom in London
Royaume-Uni
Local time: 15:00
Membre (2008)
italien vers anglais
How does that work? May 5

Hewhotranslates wrote:

Start acting like a professional entrepreneur, and you'll have the cash flow.


You mean a professional generates cashflow by refusing jobs from all agencies that pay after 60 - 90 days ?

Wow! I thought that refusing jobs means I don't get any work and it goes to others instead. Tell me how to become a professional!


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Maria Teresa Pozzi  Identity Verified
Local time: 16:00
Membre (2006)
allemand vers italien
+ ...
In Italy May 5

for example it's absolutely normal and not only in the translation business.

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Tom in London
Royaume-Uni
Local time: 15:00
Membre (2008)
italien vers anglais
COrrect May 5

Maria Teresa Pozzi wrote:

for example it's absolutely normal and not only in the translation business.


Correct. Nobody likes it, but unless we all simultaneously agree to boycott those agencies, we will never be able to stop them earning bank interest on the monies they should be paying to us.

A new agreement I recently signed with a well-known Italian agency clearly specifies that payment will be 90 days from the end of the month in which my invoice is issued.

I don't like that one little bit, but it's either "swallow the toad" (ingoiare il rospo) or not work.


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writeaway  Identity Verified

Local time: 16:00
Partial member (2003)
français vers anglais
+ ...
Halfway down? I wish... May 5

Chris S wrote:


Halfway down Belgium I would guess...


Nope, the wait starts right at the Belgian border.....


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Cristiana Coblis  Identity Verified
Roumanie
Local time: 17:00
Membre (2004)
anglais vers roumain
+ ...
Negotiation May 5

As a general rule, I cannot accept 60 days at the moment due to how taxes are calculated and paid this year in my country.
In any case, I only accepted 60 days in very special circumstances and had only one Spanish client paying at 60 days before this fiscal regime change. I had to drop them. Most of my clients pay at 30 days with a couple at 45 days at the moment (French clients). Some excellent clients pay much sooner, sometimes on delivery, sometimes within a few days.
In several cases, I had to negotiate or renegotiate payment terms, due to how taxes are paid here and found that clients are very understanding of this. Sometimes, simply asking nicely for better terms works.


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Tom in London
Royaume-Uni
Local time: 15:00
Membre (2008)
italien vers anglais
Here too, maybe May 5

Cristiana Coblis wrote:

As a general rule, I cannot accept 60 days at the moment due to how taxes are calculated and paid this year in my country.
In any case, I only accepted 60 days in very special circumstances and had only one Spanish client paying at 60 days before this fiscal regime change. I had to drop them. Most of my clients pay at 30 days with a couple at 45 days at the moment (French clients). Some excellent clients pay much sooner, sometimes on delivery, sometimes within a few days.
In several cases, I had to negotiate or renegotiate payment terms, due to how taxes are paid here and found that clients are very understanding of this. Sometimes, simply asking nicely for better terms works.


Here in the UK it is likely, in the foreseeable future, that a similar 3-monthly tax payment system will be introduced. At that point I will have to tell my slow-paying clients that I can no longer work for them.


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Jan Truper
Allemagne
Local time: 16:00
Membre (2016)
anglais vers allemand
+ ...
discount for faster payment May 5

As far as the original question of this thread is concerned, I do not consider 60 days normal; my first-tier and second-tier agency clients pay within 30 or 45 days.
(I classify clients with longer payment terms as third-tier clients.)

Interestingly, in the Plunet system of an agency I work for, during invoice generation I now get to pick:
- payment within 45 days after end of month, or
- payment within a couple of business days **for a 2 % discount on the invoice**


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Mirko Mainardi  Identity Verified
Italie
Local time: 16:00
Membre
anglais vers italien
+ ...
Like rates, terms & conditions, NDAs, etc... May 5

Tom in London wrote:

Maria Teresa Pozzi wrote:

for example it's absolutely normal and not only in the translation business.


Correct. Nobody likes it, but unless we all simultaneously agree to boycott those agencies, we will never be able to stop them earning bank interest on the monies they should be paying to us.


And that's why we're basically sc****d (as a professional category). Many outsourcers are apparently so enlightened as to go about their business with an "offer you can't refuse" attitude, dictating rates, payment terms, deadlines, liability clauses, tools to use, etc. etc. and they get away with it because they're in a position of strength and know they'll always find someone willing to bend the knee.

In the specific case of payments, even the EU felt the need to say something:


The entire European economy is negatively affected by late payment. To protect European businesses, particularly SMEs, against late payment, the EU adopted Directive 2011/7/EU on combating late payment in commercial transactions in February 2011.
...
- Public authorities have to pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days.
- Enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and provided it is not grossly unfair.
- Automatic entitlement to interest for late payment and €40 minimum as compensation for recovery costs.
- Statutory interest of at least 8% above the European Central Bank’s reference rate.
- EU countries may continue maintaining or bringing into force laws and regulations which are more favourable to the creditor than the provisions of the Directive.

http://ec.europa.eu/growth/smes/support/late-payment_en


I don't like that one little bit, but it's either "swallow the toad" (ingoiare il rospo) or not work.


Or keep looking for other (more reasonable and fair) clients...


A couple months ago I was approached by an Italian agency, and their payment term was 90 days end of month + 10 days on top of that (for "processing" or some such nonsense), which basically meant 100-120+ days from invoice. And that was coupled with absurd and totally biased clauses about liability (vs. them and their clients), quality checks, etc.

When I told the VM I would have never signed such an agreement, she came back to me saying that was "the standard contract" they had devised together with a trade association(!), that basically no one of their vendors had ever disputed its contents and asked me what parts I found unacceptable. I took the time to write a lengthy and very specific reply about it and never heard from them again.

P.S. Surprisingly enough, while still low (€0.07), their rates weren't as bad as those usually "proposed" by so many other "work donors".


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José Henrique Lamensdorf  Identity Verified
Brésil
Local time: 11:00
anglais vers portugais
+ ...
I push it further from my side May 5

Jan Truper wrote:

Interestingly, in the Plunet system of an agency I work for, during invoice generation I now get to pick:
- payment within 45 days after end of month, or
- payment within a couple of business days **for a 2 % discount on the invoice**


When asked about my rates, I tell prospects that I keep translation costs and financial costs separate. As a professional translator, my intent is to offer the best cost/benefit ratio in translation I can, in order to be more competitive. However as a complete amateur in financial services, I don't mind to be branded as the worst money lender around.

One of the major values in my business proposal is transparency. No point in delving into it now. However I strive to give my clients all the info they need to make an educated decision.

So I offer three basic rates:
a) Standard: for payment via PayPal within two weeks.
b) Sensible: 10% discount for payment via bank transfer or P2P (e.g. Western Union, Moneygram) within two weeks - client saves on PayPal fees deducted on my side (6.5% fee + 3.5% lower-than-market exchg. rate)
c) Smart: 6.6% discount for payment within 2 business days - client saves on hefty Brazilian interest rates (~18% per month).

Some great clients greatly enhance their profits with the 16.6% discount I give them for paying in 2 business days via P2P. I wouldn't know, but even if they had to get a loan - possibly at 0.25%~0.50% per month - that would be a decision quite favorable to their bottom line.

So that Plunet-using client agency could leverage their attitude a lot further in some countries.

Yet this is an acid test too. Clients who opt out of these discounts are showing their hand: they are under capitalized, and their credit rating is not good enough to secure a local loan.

This reminds me of a joke from the Russian or Jewish (?) folklore:
John Doevinsky moved from Minsk to Pinsk. Upon arrival, he asked a bystander to lend some money.
The man replied, "Hey, I don't know you! What makes you think I'd lend you money?"
Somewhat nonplussed, John commented, "This is puzzling... In Minsk - where I came from - nobody would lend me money because everybody KNEW me. Now here, in Pinsk, you won't lend me money because you DON'T know me! How does anyone get a loan in this country?"


The point here is that I don't know the agency demanding an extended payment term. Why should I lend them money?

Clients who demand payment terms beyond 30 days (actually any time beyond the minimum it takes to check the job delivered and process payment) merely expose their rationale: "I simply don't have the money I owe him. Since this bomb is gonna blow up on me anyway, the later it does, the better!"

That's why they strive to push the payment term as far into the future as they can. If they manage to make that money in the meantime, no matter how, they'll pay, in order to stay in business a bit longer. Some rely on "new patsies" (= translators) to stay in business, agencies that collect a long series of WWA=1s on their Blue Board, get banned from posting jobs on Proz, but still cling to staying in business. We've all seen them around.


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Sheila Wilson  Identity Verified
Espagne
Local time: 15:00
Membre (2007)
anglais
+ ...
B2B or B2C? There's a big difference May 5

Hewhotranslates wrote:
Do you download the latest MS Office Suite and tell Microsoft you will pay in 45 days? Do you tell Amazon you'll pay them in 30 days? Even your hairdresser is a better business person.
Why do you grant the same company a 30-day loan that wouldn't do anything without being paid in advance?

If I had a regular business account with Microsoft, I would expect to be offered the chance to pay 30 days on account. When I have my washing machine or my TV repaired, I have to pay immediately; but when I had my computer repaired - as a business expense - I asked for and received an invoice after it had been fixed. I didn't make him wait 30 days, but I could have done so. Likewise, I now have a really good client base - after 20 years of weeding out the rubbish clients - and almost all of them pay within 10-15 days even though my terms state 30 days month end. Private individuals normally have to pay me in advance, at least for 50%.

If a company can't afford buying your services (meaning paying in advance, or at least 50% and the remainder right upon delivery) and need your loan, then maybe their business model isn't working, and maybe you should be the one to serve those big clients directly. It's as simple as that.

If a company is holding out because they don't have the funds to pay you, they will generally try to stall matters well beyond the payment due date. I totally agree that the wisest thing to do is drop them. Every invoice you send them carries an undue risk of non-payment.

Start acting like a professional entrepreneur, and you'll have the cash flow.

On the contrary, I think it's most important for a professional entrepreneur - in our situation normally a very small player working "from home" - to act as though they are well aware that B2B transactions are different from the transactions you enter into as a consumer, with different terms.


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