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Late Payment Fee - Do you have a working system?
Thread poster: KorTranz

KorTranz  Identity Verified
Local time: 19:54
English to Korean
+ ...
Sep 1, 2006

I have a constant struggle with a company not paying me for 6 months. I translated about 30,000 words. She keeps on promising me that I will get paid. I never charged any company a late payment fee before. I think I am pretty patient regarding this issue. I can live with 30 day over due payments (~60 days after the invoice). But should I think about including a condition for late payments in my invoice? Do you have a working system? What is the resonable rate for late payments (1%??)? I love these translation agencies that pay on time! But once in a while, some agencies just forget to pay. Don't our credits go bad if we miss our payments?? I feel like living at the bottom of the food chain when these issues come up.

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Niina Lahokoski  Identity Verified
Finland
Local time: 05:54
Member (2008)
English to Finnish
+ ...
I haven't tried Sep 1, 2006

I think a late payment fee wouldn't work with non-payers, but it might help with those agencies that regularly pay late.

Anyway, 1% is way too little, at least for a yearly fee.

In Finland the late payment fee is generally around 10% per year (for phone bill, insurance etc., I don't know about translation, though). So if you have a bill of USD 100 that is one month late, you will have to pay 0.83 cents extra. If the payment is 6 months late, the fee will be 5 dollars.


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Astrid Elke Witte  Identity Verified
Germany
Local time: 04:54
Member (2002)
German to English
+ ...
Apparently the reverse works best Sep 1, 2006

I have not tried it yet, but I have heard that the best trick, in general, is to give a discount for prompt payment (e.g. for payment with 10 days).

Once an invoice is 6 months overdue, I think it is a serious matter and high time to chase it up through the official channels, whatever they may be in your country.

Astrid


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KorTranz  Identity Verified
Local time: 19:54
English to Korean
+ ...
TOPIC STARTER
Good idea Sep 1, 2006

give a discount for prompt payment


Thanks, Astrid. This may work well for companies that are bound to pay slow. I may try this sometime. There is one company that pays always but is late always. I have given up getting paid early by this company, but I will try to give them a discount if payment is made on time. But I wish they could pay us on time as they want the projects to be done on time.


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Debi Vaught
Local time: 04:54
Swedish to English
+ ...
Discount, yes - but... Sep 2, 2006

The discount is given on the *next* invoice with that client.

I had payment issues with several clients when I first started my business. But I tried a different approach.

Repeat, big-money clients love getting 5% off. Payment within 10 days is suddenly not a problem. Always before it was "we do invoices once a month and if our accountant is out of the office that day, everything rolls to the following month" - a real response from one company!

I put a discount on the third invoice that month because the second one just happened to fall within 3 days of their payment date - and marked it as "discount for prompt payment of invoice XXXX". From that date onward, I was paid the same week they got the invoice (except Fridays) and by passing on that information to other clients I was able to build a bit, as well.


This method will not work with everybody. But it works great for my larger clients and even with some of my smallest.



callie


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Melina Kajander
Finland
English to Finnish
My 2 cents... Sep 18, 2006

Don't know how working it eventually is (as I haven't had serious late payment issues while using it), but I have started to include a clause in my invoices (for more or less "irregular" clients, not those who I know will pay like clockwork) a while ago:

"Payment Terms: max. 30 days from the date of invoice.
Bank of England base rate + 8% interest is automatically due thereafter."

I think prevention is better than cure.

As for giving discount for prompt payment, I don't really like the idea, as it would seem to give the idea that prompt payment is not the expected, normal thing to do... (And I for one wouldn't like to send that kind of message around.)


[Edited at 2006-09-18 20:55]


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