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Payment after the client is paid
Thread poster: Burrell

Burrell  Identity Verified
United Kingdom
Local time: 16:03
Member (2004)
English to Latvian
+ ...
Jan 12, 2007

I had this really "nice" correspondence with a client yesterday. I let myself to cool down before posting it here so I am not venting any more ... just about.

I did quite a large job involving travelling for an agency in the beginning of December. Invoiced them on December 13, clearly stated in the invoice payment in 30 days. Yesterday I sent a message to the client asking him to be punctual with the payment. I have only had a few clients who pay right on time and this was a large payment that I was rather dependent on. OK, I know, you are not supposed to chase payment before time, but so far it has always paid off - clients suddenly realise you actually need your money and not only because it is a passing fancy but means of living.
My email was very friendly and polite. I appologised for bringing the subject up in advance. And here is what I got back

"This project had 17 langauges, and "X" pay us 30-45 days after receiving our invoice (which reached them on 2nd Jan). Now imagine a company who paid all their suppliers 30 days after the date of their invoices, that business would turn into a lending organisation with an interest rate of -5% and would end up bankrupt within days. Now, would you rather have customers who remain in business and paid you (reasonably compared to 99% of businesses in the UK) or bankrupt customers, ie no customers?"

After spending 5 minutes trying to locate my jaw I sent another email expressing my dissapointment and requesting the payment date. Here is what I got back:

"The situation was made as clear & "exact" as possible in the previous email (ie, the assumption is we will pay you as soon as the client pays us, which is expected to be around 2 - 17 Feb). Almost everyone state 30 days as their payment terms, however, experienced businesses in the UK realise this is not the case in practice, especially when you have had 14 days holiday due to Christmas. This is reflected in our Terms & Conidtions. For example we have known customers who pay in 90+ days, but we don't harrang them unless they intend not to pay. In over 14 years, this is the first time we experience a translator chasing their payment so vigorously, 19 working days after the day of their assignment"

I suppose the person does not have good communication skills but for me it sounds plain rude. Or am I too sensitive?

I know I should have stressed my terms before doing the job but I got this job after a colleague could not take it plus the end client is terribly respectable, huuuuge company so I know I will be paid in the end. I suppose I would not even mind that much if I was told the same in a more polite manner (even thought my bank manager would not have agreed with my reasoning). But this... Am I naive? Yes, I am venting after all.

[Edited at 2007-01-12 10:52]

[Edited at 2007-01-12 21:35]


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Anne Marie B
Canada
Local time: 11:03
English to French
Do not take it too personally Jan 12, 2007

I think this is a case of bad business manners or the person addressing you this mail has had a bad day. It unfortunately happens. There is a professional way of expressing oneself that he should have used. Do not let your emotions get in the way, you risk loosing a client. Just take note of this and decide next time, if you are willing to do business again with them. If you have the luxury of making such a choice, you are lucky.

Once you are calm about this situation, I would maybe send the person a note explaining that you were depending on this payment and that you were not being difficult about it. Money matters are always so touchy and the person may have an employee status that makes it difficult for him to understand your situation as a freelancer.

Good luck!


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Yolande Haneder  Identity Verified
Local time: 17:03
German to French
+ ...
My comment about it: Jan 12, 2007

"This project had 17 langauges, and xxxx pay us 30-45 days after receiving our invoice (which reached them on 2nd Jan). Now imagine a company who paid all their suppliers 30 days after the date of their invoices, that business would turn into a lending organisation with an interest rate of -5% and would end up bankrupt within days. Now, would you rather have customers who remain in business and paid you (reasonably compared to 99% of businesses in the UK) or bankrupt customers, ie no customers?"

1.The problem of the interest rate is none of your problem. If they expected from the beginning a shortage of money, they should have contacted their bank and calculate their price INCLUDING the cost of lending money.

A poor cost calculation is not an excuse.

2. You sent your invoice on December the 13th, they sent theirs on Jan. 2nd. Problem was expected beforehand.

3. They deserve to go bankrupt if they take jobs that they can not pay for. What is about risk calculation on top of cost calculation.
What do they think their margin is for???



[Edited at 2007-01-13 06:55]


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Giovanni Guarnieri MITI, MIL  Identity Verified
United Kingdom
Local time: 16:03
Member (2004)
English to Italian
As a business they should know better... Jan 12, 2007

they should have enough capital to pay on time... if they don't, they shouldn't be in business. As simple as that.

Giovanni


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Charlie Bavington  Identity Verified
Local time: 16:03
French to English
Not rude, exactly Jan 12, 2007

My contribution

1. It's not rude. The comment about bankrupt clients is a little sarcastic, but the rest of it is simply firmly worded. I don't think they are going to change their position, or, if you persist and get your way, I would imagine they won't work with you again.

2. I pretty much agree with everyone else making comments supporting you. Altho' we haven't seen their terms & conditions, as a rule of thumb, the agency paying you should not be dependent on the agency itself getting paid. Your contract is with the agency. By their logic, if they don't get paid until July, neither will you, and that can't be right. As Yolande said, that is what the margin is for. Christmas is irrelevent.

3. Conversely, you too are a business. To be so reliant on one payment being paid exactly on the due date sounds a little like bad cash-flow management to me. In the same way that the agency should be able to absorb the need to pay you a few days before they themselves get paid, you too should have a large enough float to be able to deal with late payment or (heaven forbid!) non payment. What would you do if this agency suddenly went into liquidation this afternoon?


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Steffen Walter  Identity Verified
Germany
Local time: 17:03
Member (2002)
English to German
+ ...
"Lending organisation" Jan 12, 2007

Burrell wrote:
"... Now imagine a company who paid all their suppliers 30 days after the date of their invoices, that business would turn into a lending organisation with an interest rate of -5% and would end up bankrupt within days..."


In addition to all the comments above, which I support, let me just point out that the agency, in their effort not to become a "lending organisation", as they put it, is shifting this risk to you - you yourself are lending money/extending credit to them (and so far at no interest). Their argument is thus not justifiable.

But I'm sure you were aware of that already.

Steffen


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xxxMarc P  Identity Verified
Local time: 17:03
German to English
+ ...
Naive? Jan 12, 2007

Burrell wrote:

"This project had 17 langauges, and [the end customer] pay us 30-45 days after receiving our invoice (which reached them on 2nd Jan). Now imagine a company who paid all their suppliers 30 days after the date of their invoices, that business would turn into a lending organisation with an interest rate of -5% and would end up bankrupt within days. Now, would you rather have customers who remain in business and paid you (reasonably compared to 99% of businesses in the UK) or bankrupt customers, ie no customers?"


I don't know whether you are naive, but your customer is certainly betting very heavily that you are. This is nothing short of a blunt admission by the company that it has a cashflow problem, is seriously undercapitalized and may even be on the verge of bankruptcy.

Getting upset is understandable - who enjoys being told that they should be happy to have nearly bankrupt customers, because they wouldn't have any customers at all otherwise. But this candid admission by your customer puts you in a VERY strong negotiating position. You might, for instance, inform your customer that in view of the grave doubts concerning his solvency raised by this correspondence, you will in future be willing to offer your existing rate only if payment is made in advance. As an alternative, you could offer to extend credit to your customer by formally extending your payment deadline from 30 to 60 days. In this case, however, your customer must accept a rise in your existing rate. I suggest 20%. If your customer objects, you can point out that you are absorbing the cost of providing credit, in terms not only of interest but also by insuring yourself against a bad credit risk. Needless to say, if the 60-day payment deadline isn't observed in future, you won't be accepting any more jobs.

Marc

[Edited at 2007-01-15 10:25]


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Cecilia Di Vita  Identity Verified
United Kingdom
Local time: 16:03
English to Italian
+ ...
I agree Jan 12, 2007

Giovanni Guarnieri MITI, MIL wrote:

they should have enough capital to pay on time... if they don't, they shouldn't be in business. As simple as that.

Giovanni


I definitely agree with Giovanni. If they don't have enough capital in order to pay their suppliers (because that's what we are, "simple" suppliers) on time, regardless of when they receive their money from this or that client, they should simply stop doing business as a company.

Or maybe next time you go to the supermarket, you can refuse to pay and explain the cashier that you're still witing the payment from that agency...

Do they really think we live in a world which is not the one where they live?

I'm quite astonished...

Cecilia


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Burrell  Identity Verified
United Kingdom
Local time: 16:03
Member (2004)
English to Latvian
+ ...
TOPIC STARTER
Thank you! Jan 12, 2007

I know there is not much I can do and most probably I will find myself in similar situation again in future as this practice seems to be widespread unfortunately. However luckily this was a one off job and I am in no way worried about upseting the customer - I will get my money (which I will because otherwise I will contact the end client and inform them that they have no right to use my work as it has not been paid for) and will not touch this client ever again. I know work is work but I cannot work with somebody who has so little respect for people they work with.



[Edited at 2007-01-15 10:08]


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Kevin Fulton
United States
Local time: 11:03
German to English
Don't send a reminder prior to due date Jan 12, 2007



I did quite a large job involving travelling for an agency in the beginning of December. Invoiced them on December 13, clearly stated in the invoice payment in 30 days. Yesterday I sent a message to the client asking him to be punctual with the payment.


I agree with the other messages that you have a relationship with the agency, not the end client, and that the agency has an obligation to you independent of their payment terms with the end client. The tone of the agency's response to you was quite out of line and unprofessional.

And I certainly sympathize with your being dependent upon receiving timely payment.

However, I think sending a reminder prior to the due date is an indication that you're a small-time player. This is tantamount to placing a "kick me" sign on your back. I think that even a company that pays its vendors on time would feel a little insulted by such a reminder.


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Lucinda  Identity Verified
Local time: 12:03
Member (2002)
Dutch to English
+ ...
Asking for payment before due date. Jan 12, 2007

Hi Burrell,

I am sorry for what you went through. This is what I think:

1. I agree with Charlie. The tone is on the sarcastic side, but I also don't think that it is rude.

2. I don't think that you should have asked for the payment before its due date. That just doesn't sound like good business to me. After its due date (i.e. after your stated 30 days) that is another story. I would then send them reminders regularly.

3. I would have asked for the travel expenses to have been provided up front as you had to pay those out of pocket.

4. This being a large project, rather huge from what I gather, I would have sent up a 'milestone' plan. - payment divided up in segments after significant parts.

Well, it is too late now and this certainly was not a pleasant learning experience. I hope that this doesn't happen to you again.

Good luck!
Lucinda


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Balttext  Identity Verified
Latvia
Local time: 18:03
English to Latvian
+ ...
Learning experience... Jan 12, 2007

... guess that's what it is.

And just to be on the safe side in future we have to agree with every new client before taking up a job on all terms - delivery deadlines, formats, and most importantly payment terms. Just to force the client to make a statement regarding payment policy (preferably in writing - an e-mail will do).

So if you say that you will have your invoice sent to them after the job and it will have to be settled within 30 days, and they say OK to that. That's it then for any further discussions afterwards. However, if they make it clear that they will pay you only after (if) their client has paid them, the choice (and risk) is all yours.

As for the tone used, I agree with what was said, the person is clever enough to be sarcastic rather than rude, but the tone is also quite cynical - it's a "pure" buying/selling business for them apparently. Although their approach is widespread, this does not mean we have to tolerate that.

There is just 1 thing the agency representative has forgotten - the word is "ethics"...

I hope everything goes fine after all.


Uldis


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