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Agency payment policies: 30 or 60 days following invoice date. Why?
Thread poster: Simon Bruni

Simon Bruni  Identity Verified
United Kingdom
Local time: 20:09
Member (2009)
Spanish to English
May 27, 2006

Dear colleagues,

Spanish translation agencies, as far as I can tell following 9 months of busy freelancing in Spain, often have the following payment policy:

Translators must issue one invoice at the end of the month for all work completed during that month, and payment will be made 30 days (or 60 days in many cases) from invoice date.

My questions are:

1) Is this common practice in other countries?
2) Why do agencies do this?
3) What is their justification for setting these parameters?

This is a straightforward question and not an attempt to criticise agencies, but it seems an unusual practice to me that a client, in any market sector, should stipulate when their service provider will receive payment. I am further confounded because many of the agencies I have worked for pay upon receiving the invoice, which raises the question of why the others are incapable or unwilling to do so. I’m not saying they don’t have justifiable reasons, I simply don’t know what they are.

Thanks in advance for your input,

Simon


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John Walsh  Identity Verified
Italy
Local time: 21:09
Member (2004)
Italian to English
30 days is good May 27, 2006

Simon Bruni wrote:
My questions are:

1) Is this common practice in other countries?
2) Why do agencies do this?
3) What is their justification for setting these parameters?

1) 30 days is good. Especially for countries like Spain and Italy.
2) They probably get paid late too.
3) same as above

This is a straightforward question and not an attempt to criticise agencies, but it seems an unusual practice to me that a client, in any market sector, should stipulate when their service provider will receive payment.
Simon

It's not unusual. Many clients have the power to stipulate when to pay. Many more simply ignore the term and pay when they want. Not only in this sector.


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Rosa Maria Duenas Rios  Identity Verified
Local time: 15:09
60 days is not common in the US and CAnada May 27, 2006

My clients pay when the job is completed, at the end of the (same) month, or 15 or 30 days after reception of the invoice.

I was once contacted by an agency in New York which indeed had a 60 days payment policy, I told them that was unacceptable to me; they said they could not change their policy, so I declined working for them.


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Daniel Bird  Identity Verified
United Kingdom
Local time: 20:09
German to English
Using payment terms as bargaining tools May 27, 2006

This is far from uncommon in industry; the purchasing dept at one of my recent employers negotiated a 7.5% price cut from all suppliers of a certain commodity by changing the terms to 30 days as against the previous 90 days terms. (It's like selling the family silver in that you can do it only once, but these are the wheezes that people come up with...)
As you point out, different clients have different policies - I especially like the ones who claim to have a 90 days policy but forget to tell their accounts department; the latter then pay 30 days as usual. Smiles all round.
The flipside of this discussion is of course that we as service providers can set the terms on those occasons when we have the upper bargaining hand. I can think of times in my career when immediate payment would have been of greater value than a higher rate paid later.
Invoicing once a month is theoretically good from client and translator's point of view; reduced handling and processing is quite efficient.
Just my view
Cheers
DB


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John Walsh  Identity Verified
Italy
Local time: 21:09
Member (2004)
Italian to English
yes May 27, 2006

Daniel Bird wrote:
I can think of times in my career when immediate payment would have been of greater value than a higher rate paid later.

DB

Me too. Now I'm not very fussy about it at all.


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Kevin Fulton
United States
Local time: 15:09
German to English
Accounting practices May 27, 2006


Translators must issue one invoice at the end of the month for all work completed during that month, and payment will be made 30 days (or 60 days in many cases) from invoice date.

My questions are:

1) Is this common practice in other countries?
2) Why do agencies do this?
3) What is their justification for setting these parameters?



Paying on a specific date each month is a common practice at agencies. In that way, a day can be set aside for the bookkeeper to issue payments. It also helps manage cash flow.

Whether payment is made after 30, 45 or 60 days is common, I might venture to say that this can vary from agency to agency. I suspect that most agencies in the US at least, pay 30 to 45 days after receipt of invoice. Some pay at the end of the month of the month following the submission of the invoice which can lead to a 60 day in receipt of payment if you've submitted at the beginning of the month.

Apart from my German clients who generally pay 30 days after receipt of my invoice, I cannot comment on European practices.


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Niina Lahokoski  Identity Verified
Finland
Local time: 22:09
Member (2008)
English to Finnish
+ ...
Agency payment policies May 27, 2006

I personally have payment terms of 30 days or 60 days (and that only with a few clients, I couldn't afford to wait all my payments for two months!).

AFAIK it's common in Finland and other northern countries to have 14 days policy or max. 30 days.


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Aliseo Japan  Identity Verified
Japan
Local time: 04:09
Member
Italian to Japanese
+ ...
Payment reliability vs Payment date May 28, 2006

Simon Bruni wrote:
1) Is this common practice in other countries?


I can speak for Japanese and Italian Agencies only.

It seems to me that the most common payment term in Japan is 60 days after end-of-month invoice. Some of them pay after 30 days but some after 90 days. Once you know and accept this, you can be (almost) sure that you will be paid on time (after 10 years in Japan I am glad to note that we haven't had a single payment problem!).

Although we don't work very much with Italian Agencies, according to our little experience their *theoretical* payment term is 60 days after end-of-month invoice. We used to work with one that proudly says "We will pay you 90 days after your monthly invoice (please allow for some additional "technical" days), but we assure you that we will be very punctual". In fact, they are very punctual and after the initial months of work with them money starts coming in very regularly. I am not justifying this, but sometimes I find myself thinking whether payment reliability is not more important than volatile payment promises.

KInd regards

Mario Cerutti
http://www.aliseo.com


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Jack Doughty  Identity Verified
United Kingdom
Local time: 20:09
Member (2000)
Russian to English
+ ...
Not the same everywhere May 28, 2006

Until the past week, I had never done any work for agencies in Russia or Ukraine. I have now worked for one in each of these countries. The Russian agency paid within eleven hours, and the Ukrainian one within two days.

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Maciej Pomorski  Identity Verified
Poland
Local time: 21:09
Member (2005)
German to Polish
+ ...
In Poland some agencies pay after 14 days, some after 1 month May 28, 2006

but I think that in the international translation business 30 days is a common term. I usually receive payments from German agencies after 30 days.

Only one of my clients pays 90 days after invoicing.
It's interesting that the term of payment was not mentioned when we negotiated the rates - If I knew this, I would ask a higher rate.
Our cooperation is OK in all other aspects, so I don''t complain.

But I think that the term of payment , as the rates, should be discussed with clients before starting cooperation, although we often forget about this.



[Edited at 2006-05-28 09:56]


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Catherine Bolton  Identity Verified
Local time: 21:09
Member (2002)
Italian to English
+ ...
I should consider moving... May 28, 2006



Most Italian agencies pay at 60 days, but quite a few have a 90-day payment policy. Obviously, I work with the latter as little as possible. But even the 60-day people actually end up paying at 75 days.
Catherine


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Dyran Altenburg  Identity Verified
United States
Local time: 15:09
English to Spanish
+ ...
Q & A May 28, 2006

Simon Bruni wrote:
1) Is this common practice in other countries?
2) Why do agencies do this?
3) What is their justification for setting these parameters?


1) No
2) Because providers let them
3) Experience tells them they can get away with it

The idea is to be in a position where providers not only set their own rates, but also set their own payment terms.

--
Dyran


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Dinny  Identity Verified
Greece
Local time: 22:09
Italian to Danish
+ ...
I agree with you, Dyran May 28, 2006

In no other business you can contact a provider of services, buy something, and TELL him when he can expect to be paid.

Providers set the terms. If clients can accept them, they might buy.

I do tranlations, I don't provide financing of the project. Otherwise I might as well work directly with the end clients instead of working with agencies.

That said, I still accept terms of 60 days from some of my "old" agencies, but I am about to make a clean-out and to concentrate on working with agencies that pay on delivery or at max. 30 days.

Unfortunately, it will be the 'newcomers' that have to accept the 60 or 90 days when they are still at the stage when any term will do as long as they will be able to get work.


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Vito Smolej
Germany
Local time: 21:09
Member (2004)
English to Slovenian
+ ...
Anybody giving discounts for early payments? May 29, 2006

with what success?

From my point of view, a rather theoretical question. Actually more watchful for discounting (having to write off) for late or "the-hell-will-first-freeze-over" payments.

smo


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Cristina Golab  Identity Verified
United States
Local time: 15:09
English to Spanish
+ ...
However, the client has to pay right away Jun 1, 2006

It is funny, but some years ago, I had to get my college credentials translated by a specific agency. As a client I had to pay the agency at the moment of sending the original documents. I am pretty sure the translator got his money 30 or 60 days later.

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