Posted by: patenttranslator | March 19, 2016

What Are the Rules for Paying Translators’ Invoices?

Just like there is no such thing as “the going rate” for translation, because “the going rate” depends on how much or how little a client, (or an agency, which is not really the same thing as a client when you think about it), needs you and how much or little you are willing to accept for your work, at least in the United States there are really no official rules when it comes to how long translators should wait for payment of their invoices.

In the real world (non-translating world), payment is made before or when a service or a product is purchased, or immediately after a service has been provided. When you go to a shop and buy a teddy bear for your favorite niece, you have to pay before they’ll let you take the teddy bear with you, either with cash or a credit card. Otherwise you would be considered a thief and they could call the police on you. The same is true about air-conditioning and dishwasher repair people: you have to pay them when the problem has been fixed.

Prepayment or Payment When Service Is Rendered

This is true in the translating world as well, but unfortunately, on a much smaller scale.

I sometimes ask new clients to prepay for a translation, but only if it is an individual who has found me through my website and whose credit worthiness simply cannot be ascertained, for example a patent agent who has a professional practice, but who only has a modest website and works as a sole proprietor rather than for a patent law firm, or an individual who wants me to translate a personal document.

Should such a customer refuse to pay in advance, it would be a pretty clear sign to me that I don’t want this work because the chances that I may not be paid are high. I think it’s interesting that prepayment has never been refused to me so far in these cases. I do not demand prepayment from translation agencies because I do not consider them clients; they do not behave as clients normally do, and very few would be likely to agree to prepayment.

It sure is nice to get money before we even start working. If the cost of the translation is only a few hundred dollars, I usually ask for prepayment in full. If it is more than a thousand dollars or several thousand dollars, I usually ask for a down payment of 50% and the remainder “upon delivery of translation”. You can structure the procedure in such a way that once the translation is finished, you send an e-mail to the client informing him that the translation will be e-mailed upon receipt of the remaining balance. All you need for that is a PayPal account.

This is a very safe method, but one should keep in mind that demanding prepayment is a double-edged sword. Customers don’t like it when they are asked to pay in advance, although most people do understand why it is necessary. So I generally do this only for customers who are private individuals and only the first time. If they come back with another order, I invoice them without asking for down payment because their credit worthiness has already been established as far as I am concerned.

Payment Within 30 Days Is Generally Considered a Prompt Payment

When I started working as a freelance translator in 1987 in San Francisco, I was working exclusively for translation agencies. (How time flies when you’re having fun!) The general rule back then was that an invoice would be paid by a translation agency within 30 days, although it often meant 30 days plus a few more, taking into account the time it takes to receive a check by mail.

I still believe in this rule. When I work as a translator for an agency, I always specify before I accept a job that my payment terms are 30 days net, and I start asking what happened to the payment after about 35 days.

When I get paid early, my heart is overflowing with love and gratitude and the agency goes on my list of preferred agencies.

If it takes considerably longer than 5 weeks, the agency goes on my list of non-preferred agencies, which means that unless I am really, really hungry, I am likely to tell them that I’m too busy next time, even if in reality I would be able to fit their job in if I tried a little harder.

When other translators work for me (and I am “the agency”), I usually pay them within a week or so if it is a small amount because I know that even a small amount will make their day, and it does not really cost me anything. Because I always specify that I pay within 30 days, I get very nervous if their invoice is close to 30 days old and I don’t have the money to pay them.

Fortunately, most translators now accept payment by credit card through PayPal, so I just pay with a credit card through PayPal and most of the time still get paid by the client before the credit card bill is due.

(So now you know that I am not a very fast payer, but neither am I a slow payer).

Some Direct Clients and Agencies Are Very Prompt Payers

Over the years I have worked for many translation agencies and many direct clients who have paid me very quickly, and I still work for several such direct clients and agencies. In fact, last month I received a check from a direct client for a translation from German ten days after I sent my translation and invoice, and today I received a check for something I translated from Japanese seven days ago. (My heart is overflowing with love and gratitude!)

I always quote two rates when I work for direct clients: a non-rush rate and a rush rate, which is 45% higher than the rate for regular turnaround (the rush turnaround time takes up to twice as long).

The wording “up to” is important. If I am not very busy and I manage to finish the translation within the “rush turnaround time”, I send the translation to the client within the rush turnaround deadline while charging the lower rate and some clients reciprocate by sending the payment early.

The arrangement with two prices is very suitable for patent translations for a number of reasons. First of all, when I provide two cost estimates to a client, usually a patent lawyer, my client runs both of my cost estimates by his client and unless the case is urgent, the client usually goes for the lower cost. Time is sometimes not that important when it comes to patent translation, for example when a law firm has several months to file a new patent application for which my translation is needed.

This means that I am making 45% less than I potentially could be making, but it also means that I can fit in other work if there suddenly is more work for me. It also means that if I deliver my translation sooner than expected, I am rightfully perceived as a good guy, which has its advantages, such as reciprocation by a client who decides to pay early.

However, I believe that this kind of arrangement is likely to work only for direct clients. I can only raise my cost by a cent or two if I accept a rush translation from a translation agency.

Some Translation Agencies and Even Direct Clients Take Forever to Pay (More than 45 or Even 60 Days)

In addition to lowering the rates that are often paid to translators now by at least 20% within the last decade or so, the corporate translation agency model has made it all but impossible for independent translators who are dependent on this agency model to make a living in other ways, such as through demeaning and often illegal “Non-Disclosure Agreements” designed to prevent competition from actual translators while turning them into indentured servants.

One of the ways “the translation industry” is also making it impossible for translators to survive is the fact that “the 30 days net rule” for payment of translators’ invoices, which used to be a standard for decades, has been for the most part eliminated in the corporate translation agency model.

I don’t work for this type of agency anymore, so I may be exaggerating the problem to some extent, but from what I read in translator discussion groups, especially on LinkedIn, the clause stating that, “the payment of invoices will be made by the 15th of each month 45 days after the end of the month” is becoming a standard part of contracts that corporate translation agencies are now asking translators to sign, as I wrote in my previous post.

Since translators are often also forced to submit only one summary invoice per month on a specified date, this means that they may have to wait significantly longer than two months to get paid for their work if they agree to these terms.

Not only is this an incredibly long period of time to go without pay, but this arrangement contains another major risk: it may be difficult for a translator who has not been paid for the work done during the last month to refuse to accept new “assignments” during the next month(s). Especially if these assignments are for the same project, saying “no” to them takes a lot of courage. The translator may be saying to herself: what if they replace me with another translator on this project? It is tempting and seemingly safer to accept new work. But saying “yes” is in a way even riskier because the translator may all of a sudden start worrying about not getting paid for a much larger amount.

Saying no by insisting on getting paid first before accepting a new translation is actually safer in this case because it limits our exposure to potential non-payment, but this is much easier to do if the payment term is 30 days, rather than “45 days after the end of the month”.

I have found that when it comes to payment of invoices, the general rule is that larger companies, both agencies and direct clients, usually take longer to pay than smaller entities. That is one reason why very small, small and medium-sized companies are my preferred clients.

In a company with a corporate structure, the translator can be referred to the accounting department, which can be just an answering machine. When accounting gets back to you, it may be just an e-mail stating that the invoice will be paid by such and such date and that’s the end of it. There is much more accountability in smaller companies, whether these are translation agencies or law firms, and I usually find the highest level of honesty and accountability when I work for an independent practitioner who is often the sole proprietor of the business, such as a patent agent or a medical doctor, because they feel personally responsible since they are the actual people who promised to pay on time.

Some Direct Clients Also Take a Long Time to Pay – But Generally Not As Long As Agencies

Unlike some translation agencies that are based on a corporate model, large patent law firms do not ask me to agree to unacceptable payment terms in writing. Instead, they simply sign my standard work order agreement specifying the condition that the payment of my invoice is due in 30 days net, but then they simply ignore it. In response to inquiries, their accounting department may finally get back to me with an e-mail saying that payment will be made by such and such date.

I can live with a longer waiting time if I work for a corporate direct client because I can charge such a client a higher rate than what I would be getting from an agency, and also because even corporate patent law firms that take a long time to pay usually still pay me within 45 days (not 60 or more days as may be the case with some translation agencies).

If it is a translation agency, I think it is best to pass on offers of work with punishing payment terms, not only because the rates are much lower, but because the risk of non-payment of a large amount from a broker are for obvious reasons much higher than when one is working for the actual client.

Over the last almost three decades, I have been “stiffed” by several translation agencies, based both here in the United States and abroad, but so far (knock on wood!) I have never been stiffed by a patent law firm.

 

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Responses

  1. I have been translating full-time for several years now. Most of my direct and agency clients pay within 30 to 45 days. However, one large agency client is a little different. I bill them at the end of the month, and they pay within 60 days. The twist is that they have a 10 business day “check” period on any deliveries. So any jobs that are submitted after the middle of a given month can’t be invoiced until the following month, which means that the payment cycle is really 90 days. Needless to say, I am rapidly reducing the amount of work I do for this firm.

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  2. “The twist is that they have a 10 business day “check” period on any deliveries. So any jobs that are submitted after the middle of a given month can’t be invoiced until the following month, which means that the payment cycle is really 90 days”.

    That’s pretty twisted all right.

    When I read advertisements of highly innovative translation enterprises proudly describing their brand new model as “a people-powered translation platform”, the image that is being formed in my mind is that of an ancient ship in which slaves are working the oars in the galleys deep in the bowels of the ship to push it forward.

    Since that too was a people-powered platform, the concept of “a people-powered platform” is in fact ancient rather than revolutionary as the translation industry’s propaganda would have us to believe.

    Liked by 1 person

  3. Yes, it’s wise to get payment in advance or on delivery for jobs for individuals, and people will generally expect that anyway. I’d recommend it too for any “company” you think looks a bit dicey – maybe they don’t give a specific address, only give a cell phone contact number, don’t have a website or one that looks a bit dodgy, aren’t in the company register, etc.

    For B2B, the whole commercial world relies to a large degree on goodwill and trust. Companies trust people will do what they say they’ll do, products and services will be good quality, charges will be fair, bills will be paid, etc. There is accepted or standard business practice for payment terms in every country – it might be 30 days, 45 days, by a set day of the month, etc. Freelancer translators are in business so should expect their business clients and agencies will pay their invoices within those accepted “normal” time frames.

    What does an agency trying to impose longer payment terms than standard accepted business practice tell you about that agency? Not a lot of goodwill there is there. And this to the very people who actually create the goods they sell, the people without whom they wouldn’t even have a business. Their accountants might think it’s smart to get translators to part fund their working capital, but from an overall business point of view it’s just plain dumb. Unless of course there was never any intention to operate with goodwill and trust in the first place. Could there be a stronger warning bell that this type of agency maybe can’t be trusted?

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  4. Hello. I work mostly with agencies, unfortunately, but with those which pay fair rates as agency goes. But I am starting to lose the motivation to do so because most payments are getting delayed or really only done after 60 days, and those agencies used to pay within a month or 45 days, which wasn’t ideal but at least I knew when the money was coming. I know, I should get direct clients, but it hasn’t been working, my language pairs have been quiet, I am seriously thinking about giving up, the ups and downs with my cash flow have been wearing me – and my accounts – out and I am sick and tired of chasing up people for small money. I truly love what I do but maybe I am not fit to survive in the “translation industry”.

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  5. I don’t know what to tell you, Daniella, except to hang in there.

    We are all in the same situation, courtesy of “the translation industry”.

    Liked by 1 person

  6. In the UK – and I think this actually applies throughout the EU – you are allowed to start charging interest on payments due once 30 days have passed. Whether you actually want to do this will of course depend on whether you want to risk alienating your client, but the option is there. I’ve had it suggested to me in the past that I might want to put two rate options on the invoice: one, the “standard” one, for payment within 30 days, and the other including interest for payment outside the 30 days. I’ve never tried it, though.

    I don’t *necessarily* mind if a client doesn’t pay within 30 days: it depends on their circumstances. I’m aware that some smaller concerns don’t actually have someone to deal with the bookkeeping and so on full-time, and consequently only do one payment run a month, in which case I’m fine with that. What I wouldn’t be so happy about would be if they used it as an excuse to delay payment further. Other, “smaller” agencies I’ve known have been faster to pay, and on the odd occasions where I’ve worked for individuals they’ve usually been pretty prompt to pay – as I usually am myself, although that tends to be because I’m concerned it may slip my mind if I leave it rather than anything else!

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  7. 1. Yes, we can try to charge interest, but as you say, it alienates the client, and then you have to figure out how to collect it from an alienated client, not an easy.

    2. If a company cannot setup a system to keep track of invoices and uses it as an excuse for payment once a month, what kind of company is it?

    Since I am doing it myself when I pay translators, I expect translation agencies to be able to do the same. If it is a big corporation, I can live with it, but only because I am charging a higher rate and it should still not be more than 45 days.

    I think it’s just an excuse for creating a system allowing these operations to extend the waiting time. Once you agree to that, they will figure out ways to extend the waiting time even further.

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