How to avoid excessively long payment terms?
מפרסם התגובה: Paul Dixon

Paul Dixon  Identity Verified
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Jul 29

I would like to know how to avoid excessively long payment terms, and what I can do about them.

I did a job a couple of months ago and they said the terms of payment were 60 days which I accepted. It was a long job, and now they are saying it is 60 days after invoice, which works out at 150 days as from the start of work. What can I do? In the dire crisis caused by covid we all need money quickly, and not whenever the client feels like paying. It is already more than 60 days from st
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I would like to know how to avoid excessively long payment terms, and what I can do about them.

I did a job a couple of months ago and they said the terms of payment were 60 days which I accepted. It was a long job, and now they are saying it is 60 days after invoice, which works out at 150 days as from the start of work. What can I do? In the dire crisis caused by covid we all need money quickly, and not whenever the client feels like paying. It is already more than 60 days from start of work, but the agency won't budge.

Has anyone else had this problem?
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Dylan Jan Hartmann  Identity Verified
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Call and talk to them about it Jul 29

Best advice for anyone in a dire situation is to get the PM or agency's number and talk to someone about your situation.

Often these rules are flexible when you can talk to them explaining your current crisis.

I just delivered a 220,000 word translation project and the agency's terms were 'PO available once client confirms receipt of completed job'. After translating that much work, the following proofreading/QC tasks are scheduled for months. I talked to the language l
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Best advice for anyone in a dire situation is to get the PM or agency's number and talk to someone about your situation.

Often these rules are flexible when you can talk to them explaining your current crisis.

I just delivered a 220,000 word translation project and the agency's terms were 'PO available once client confirms receipt of completed job'. After translating that much work, the following proofreading/QC tasks are scheduled for months. I talked to the language lead explaining that I'd already have to wait 60 days, like you mentioned, and they allowed me to invoice after submitting my last file.

People can sometimes be kind. Sorry if you don't find someone who is helpful.
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Teresa Borges
 

Paul Dixon  Identity Verified
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Excuse Jul 29

Their excuse is they have no money as they are paying the translators before the client pays them.

 

Dylan Jan Hartmann  Identity Verified
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Sounds like they're in the same situation as you Jul 29

Unfortunately, they are probably trying to chase down unpaid invoices just like you are.

Hoping the best for you and that everything works out.

DJH


 

Chris S  Identity Verified
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60 days is 60 days Jul 29

Paul Dixon wrote:

I would like to know how to avoid excessively long payment terms, and what I can do about them.

I did a job a couple of months ago and they said the terms of payment were 60 days which I accepted. It was a long job, and now they are saying it is 60 days after invoice, which works out at 150 days as from the start of work. What can I do? In the dire crisis caused by covid we all need money quickly, and not whenever the client feels like paying. It is already more than 60 days from start of work, but the agency won't budge.

Has anyone else had this problem?


Paul, you agreed to 60 days and it’s not 60 days yet...

In this business, it’s standard for payment to be XX days from the submission of invoice, or from the end of that month, not from when the work started or finished.

Another time, agree on 30🤷‍♂️


Ian Keith Jones Williams
Teresa Borges
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Samuel Murray  Identity Verified
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@Paul Jul 29

Paul Dixon wrote:
I did a job a couple of months ago and they said the terms of payment were 60 days, which I accepted. It was a long job, and now they are saying it is 60 days after invoice, which works out at 150 days as from the start of work. ... It is already more than 60 days from start of work, but the agency won't budge. ... Their excuse is they have no money as they are paying the translators before the client pays them.


Well, foremost, this is a communication problem. I think a lot of translators get complacent when discussing terms with clients and are too willing to assume that the client means that same thing that they mean, particularly when it comes to payment terms: too often will a translator accept it when an agency says "we pay after X number of days" without asking "number of days after *what*". After the start of the job, after the end of the job, after the invoice was received, after the end of the month after any of these events, after the third-party accountant's day at the office after any of these events... any of these things can make a payment term of e.g. 30 days stretch into months and months.

(In a non-pandemic year, this doesn't really matter for many translators who invoice regularly, because they get a steady stream of income regardless of whether the payments come 30, 60, 120, or 240 days after the job.)

The safest option for translators may be "X number of days after the start of the job" (e.g. 45 days), since a job's initial deadline can sometimes be moved if the nature or size of the job changes. I'm not sure how successful you'll be at convincing clients to pay like that, though. Clients' payment terms are generally not flexible -- it forms part of their usual business administration, and they have processes that they always follow.

What's more, the accountant may not consider a PM's agreement to deviate from their normal practice to be binding on the accountant. In other words, even if the PM seems willing and agrees to your preferred terms, the agency head or accounts department may not consider it unethical to not count themselves bound to that. After all, PMs who get commission on the number of jobs they arrange, or on how quickly they arrange it, are more likely to promise more than they are authorised to agree to, in the belief that what matters most is that all parties are happy with the outcome at the start of the project. Sales reps are known to have the same blindspot.

There are translators who believe that "good" agencies always have sufficient cash flow to pay their translators long before the clients pay the agencies, but it is my impression that only very large or very niche agencies can afford that, so don't bank on it. Other translators are convinced that "good" agencies should only accept clients who pay in advance, but in the current competitive climate I would not be surprised if a large number of clients are allowed to pay after a week or two only.

In your particular case, the job seems to have stretched over longer than a month (and certainly longer than 2 weeks), so you should have negotiated that a portion of the money be paid after one month's work at least.

Chris S wrote:
Paul Dixon wrote:
Now they are saying [the payment terms are] after invoice, which works out at 150 days as from the start of work.

In this business, it’s standard for payment to be XX days from the submission of invoice, or from the end of that month, not from when the work started or finished.


I agree with Chris that it is often the case that e.g. "30 days" means "30 days after you submitted the invoice" or "30 days after the end of the month in which you submitted the invoice".

I have never encountered a case in which "30 days" meant "30 days after the start of the contract". In a number of cases, it does mean "30 days after issue of the purchase order", but in many such cases the purchase order is issued long after the start of the job or even after the job has been completed.

Are you saying, Paul, that in your translation jobs the payment terms usually relate to the start of the job?


[Edited at 2020-07-29 07:11 GMT]


 

Tom in London
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I hate having to think up a title every time I post in a forum Jul 29

You specify the terms, not them. Include the payment terms on your invoice.

Maria Pia Giuseppina Nuzzolese
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Teresa Borges
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@Paul Jul 29

Answering your question: How do I avoid long term payments? First of all, by not accepting them, my payment terms are 30 days after the end of the month in which I submitted the invoice. There’s an exception that proves the rule: I have been working with a very regular customer since 2011 who has been paying like clockwork at 60 days. For regular customers my invoices are issued at the end of the month, but for new clients the invoice is always sent with the translation. When a project is rath... See more
Answering your question: How do I avoid long term payments? First of all, by not accepting them, my payment terms are 30 days after the end of the month in which I submitted the invoice. There’s an exception that proves the rule: I have been working with a very regular customer since 2011 who has been paying like clockwork at 60 days. For regular customers my invoices are issued at the end of the month, but for new clients the invoice is always sent with the translation. When a project is rather long and I’m working with a first time client I either require a down payment (in general, 25%) or the project is split in several units and each one has its own invoice. As an extra precaution I rarely accept a long project from a first-time client, unless it’s a well-known international organization. This strategy has worked fine for me: I haven’t had a single non-payment issue for a few years…Collapse


Philip Lees
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Sarah Lewis-Morgan  Identity Verified
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It's a bit late on this occasion... Jul 29

... but, if I take on a long job that means I am tied up potentially for weeks with no option to take on other work, I try to negotiate part payment with the client, and in return offer part delivery. If you are doing the work for an agency, they in turn could negotiate part payment against part delivery with their client so they have the money to pay you.

Chris S
 

Sheila Wilson  Identity Verified
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If you accept them, you accept them Jul 29

Paul Dixon wrote:
I did a job a couple of months ago and they said the terms of payment were 60 days which I accepted. It was a long job, and now they are saying it is 60 days after invoice, which works out at 150 days as from the start of work.

Payment terms start with the issuing of the invoice as that's the contractual document. Some agencies will tell you the time starts later, but they're lying. OTOH, the supplier has no right to ask the clock to start ticking before the invoice has been issued. If it's a sufficiently long job (e.g. a book), you should negotiate interim invoices/payments. These are points of contractual commercial law that apply everywhere in the world I know of.

My own terms are "30 days month end" as I, like many others, prefer to reduce the admin overhead by producing monthly invoices for regular clients. In that case, we're voluntarily adding on 0-30 days post-delivery to the payment term. I find it's a worthwhile concession for several reasons:
-- You only have to produce one invoice per month for each client (one of my clients usually has 15-45 entries on their multi-page monthly invoice).
-- You get to spend the last working day of the month doing the most satisfying job, so it's a great way to close the month (or give yourself a stern lecture!). You can also get into a rhythm for an hour or so. I find that avoids many of the mistakes I'd make if I dashed off an invoice in the moments before delivering a job.
-- All payments are due by the first of the month, so there's no need to chase different payments on different days. If your file (paper or electronic) of unpaid invoices isn't empty when you add new ones, you know you have work to do. Maybe the first reminders will all go out on the 5th, the second ones on the 12th, etc.
-- Receiving an invoice on the last working day of the month can be a wake-up call for clients: "Oh, here's September's invoice; did I remember to pay the August one?"
The only real negative I've found is that a lot of invoices sent on 31/12 seem to go into a black hole. I've sorted that problem by always taking leave then, so that I invoice around 20/12 .

Some will say that with regular work coming in, the payment term is irrelevant -- you're getting paid regularly anyway -- but I don't agree.
-- Firstly, 60-day clients are most likely relying on getting their client's payment at 0-30 days before paying their supplier. That's a very risky way to run any business. An agency should have sufficient reserves to pay their suppliers on time, even if their client never pays them. On the rare occasion that I've accepted, the 60-day client is quite likely to need a reminder, or even two -- 60 becomes 65, 70, 75...
-- Secondly, if/when serious cash-flow problems arise, they already owe you a huge amount of money before you get any idea. By the time the payment for a job done on Day 1 is due, you've already maybe worked for them on Day 2 through Day 60. Even after that, you have to give them a few days grace, then send a few reminders... Maybe by Day 75, you're worried enough to start investigating, and to think about not doing any more work for them until you've been paid. If the worst comes to the worst, you stand to lose every cent of what's owed to you for those entire 75 days of work. I've personally had two clients (in 23 years of freelancing) go bankrupt and I never saw a cent in either case -- suppliers like us are right at the bottom of the pile .

What can I do?

This time, all you can do is wait. Next time just say no, unless you're happy with your decision to say yes.


Katrin Braams
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Samuel Murray  Identity Verified
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@Sheila Jul 29

Sheila Wilson wrote:
Payment terms start with the issuing of the invoice as that's the contractual document.


The contract begins not with the invoice but when both parties agree that the translator should do the job. In fact, I don't even think one can call an invoice a "contractual document". The invoice is not a contract -- it is simply a statutory notice confirming the payment details. That payment terms are usually assumed to relate to the invoice date is simply a convention.

Some agencies will tell you the time starts later, but they're lying.


The payment terms can be worded in any way -- if both client and translator agree (or if the client says/proposes and the translator accepts) that the payment term starts e.g. at the end of the month following the invoice date, then that is perfectly all right.

The supplier has no right to ask the clock to start ticking before the invoice has been issued.


I disagree. The parties can define the event that starts the period until the payment date in any way they like (barring legal restrictions, e.g. in some jurisdictions you are restricted by the timing of the tax year).


Chris S
 

Sheila Wilson  Identity Verified
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@ Samuel Jul 29

Samuel Murray wrote:

Sheila Wilson wrote:
Payment terms start with the issuing of the invoice as that's the contractual document.


The contract begins not with the invoice but when both parties agree that the translator should do the job. In fact, I don't even think one can call an invoice a "contractual document". The invoice is not a contract -- it is simply a statutory notice confirming the payment details. That payment terms are usually assumed to relate to the invoice date is simply a convention.

Yes, I agree with most of that -- my wording was too loose. But I don't think your last statement can be correct. The invoice date is used by the courts to determine when payment should have been received, how much interest is due, etc. No other date is ever used unless specifically agreed to by both parties in advance.

Some agencies will tell you the time starts later, but they're lying.


The payment terms can be worded in any way -- if both client and translator agree (or if the client says/proposes and the translator accepts) that the payment term starts e.g. at the end of the month following the invoice date, then that is perfectly all right.

Yes, as I've now said above. I was thinking of the situation we far more often come across, where an agency will say that the clock only starts ticking when they -- and their client, in some cases -- say so.

The supplier has no right to ask the clock to start ticking before the invoice has been issued.


I disagree. The parties can define the event that starts the period until the payment date in any way they like (barring legal restrictions, e.g. in some jurisdictions you are restricted by the timing of the tax year).

But I didn't say they couldn't; I certainly didn't mean to imply that, anyway. I meant that the supplier can't just impose, unilaterally, a payment period that starts running down before invoicing. In other words, you can't deliver a translation on 15th May, then send the invoice -- with terms of 30 days -- on 30th May and insist on payment being received by 15th June. Unless both parties have already agreed to that happening, in which case that agreement should be reflected in the invoice.


 

Samuel Murray  Identity Verified
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@Sheila Jul 29

Sheila Wilson wrote:
Samuel Murray wrote:
That payment terms are usually assumed to relate to the invoice date is simply a convention.

The invoice date is used by the courts to determine when payment should have been received, how much interest is due, etc.


Yes, here is an example from the UK (it relates to late payment interest but I assume we can use it for this discussion's purposes):
https://www.gov.uk/late-commercial-payments-interest-debt-recovery
"If you do not agree a payment date, the law says the payment is late 30 days after either the customer gets the invoice or you deliver the goods or provide the service (if this is later)"


 

Nikki Scott-Despaigne  Identity Verified
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Rules and regs in different countries Aug 1

Paul Dixon wrote:

Their excuse is they have no money as they are paying the translators before the client pays them.



Different rules apply in different countries. However, there are some basics that many countries seem to have in common.

Whatever payment terms have been agreed, it should always be clear when time starts to run. By that I mean that if you have a 60-day payment term, you need to be sure whether the 60 days start:
- from the day the purchase order is issued
- from the day you deliver the work
- from the day you submit your invoice
- from the day the invoice is received
- from the last day of the month in which the invoice was received
- from the first day of the month after you submitted your invoice (or in which it was received)
- from the last day of the month after you submitted your invoice (or in which it was received)

I have never seen time starting to run at any point before delivery. More often than not it runs from the end or the start of a particular month.

You also need to establish what terms are actually legal. Many agencies in France still work to payment conditions that have not been in force since 2014.

I got so sick of clients imposing ridiculous terms that I started accepting work from those willing to pay upon presentation of my invoice. I always send my invoice with the work. I allow 10 days for the funds to be received. If not recevied within that time, I send a reminder with a strict payment deadline. If the money does not come in, I then send a formal demand to pay within a few days, failing which I will pursue. And I do pursue if they don't pay. Since adopting principles of this sort, I have had no problem with payments.

I can always agree to lengthier terms but if I do so, then I ask for and obtain partial payment in advance (30% of 50%, depending on the amount, the risk, the value, etc). For a good client, it's no problem. For a crap client, it can be a problem. If so, it's a potential red flag for you. Even very nice people can find themselves not having enough money to pay you. That should not come into the equation. You have done the work, you should be paid on time. However, if things do become awkward, then request a signficiant amount now and the rest one month from now, for example. Its too late to change the terms now but if your client values your work, he may be prepared to make an effort.

Warning sign!!!
Your client says he cannot pay you until his client has paid him. That is my most hated excuse. I get that it may be a reality for your client. But if your client could not afford to pay you in the first place, he should not have solicited your services.

What can you do about it?
Remind your client that you have a contract with him. He is the one who agreed to pay you.
Your client has another contract with the end client. You are not party to that agreement. You are not concerned by that agreement and cannot be expected to take it into account. After all, you did not sign that contract!
So, remind your client of his contractual undertaking with you and insist he pays.

In the future?
- Make sure payment terms and conditions are established more clearly.
- Consider asking for part payment in advance.
- Determine policy for reminders and action that you will undertake if the situation turns sour.


Christel Zipfel
 

Enrique Bjarne Strand Ferrer
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Discount Aug 1

Paul Dixon wrote:

60 days after invoice, which works out at 150 days as from the start of work. What can I do?


I the situation is dire, you could offer them a small discount for early payment.
An alternative is to get some sort of (trade) credit or other financing from your bank.


But, the main point is that this is actually your problem. You agreed to the terms.



[Edited at 2020-08-01 08:55 GMT]


 


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