Late payment fee
Thread poster: peiling

peiling  Identity Verified
Germany
Local time: 10:53
Chinese to English
+ ...
Apr 24, 2007

I saw that an agency imposes 20% surcharge for late delivery. Generally, what is the surcharge for late payment of an invoice? Thanks in advance.

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Harry Hermawan  Identity Verified
Indonesia
Local time: 15:53
Member (2005)
English to Indonesian
It applies? Apr 25, 2007

You mean if translators sent invoice then the payment (settlement) for that invoice is late?

I would doubt that this applies? A breakthrough if it does.

From: gloomy and cloudy Jakarta...


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peiling  Identity Verified
Germany
Local time: 10:53
Chinese to English
+ ...
TOPIC STARTER
Yes Apr 25, 2007

I mean if the payment on an invoice is late. I'm sure some translators charge that, although I'm not sure about a realistic surcharge, seeing that some agencies are charging up to 20% for late delivery of the work.

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Ritu Bhanot  Identity Verified
France
Local time: 10:53
Member (2006)
French to Hindi
+ ...
Late payment Fees Apr 25, 2007

Often, some businesses give small discounts for early payment so as to make people pay before time. And of course, it depends on your invoice. Sometimes, there is a clause at the bottom of the invoice stating a 5% (app.) penalty for late payment.

But then how do they implement it? No idea. You can take them to court (another line in some invoices mentions that all legal action can take place only in the jurisdiction of "x" area) but...

Not of much help, I guess... but just a matter of general practice.

Regards,

Ritu


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Fan Gao
Australia
Local time: 18:53
Member (2006)
English to Chinese
+ ...
One suggestion Apr 25, 2007

Hi Pei Ling,

I don't know if there is an industry standard, I think it comes down to a personal decision you have to make and set out in your own terms and conditions when you first start working with an agency or direct client.

In my experience some clients pay early and some pay late. Some late payers give us regular work so I let it slide. Even though I haven't felt the need to enforce any late payment terms to date, I think it is a feasible thing to do and something you could try.

Let's say you start with a new client. You advise them of your late payment terms up front. Once the due date comes and passes without payment, you could just calculate and add the charge to their next invoice which, if they want to work with you again, they'll agree to. That would save you paperwork and sending invoices for jobs and invoices for overdue charges.

Let us know how you get on and what method you find successful.

Good luck and best wishes,
Mark


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Christel Zipfel  Identity Verified
Italy
Member (2004)
Italian to German
+ ...
Look for EU directive 2000/35 Apr 25, 2007

It should have been implemented in all European countries since then.

Personally, I have included a sentence on my invoice form saying that late payment fees shall be charged if payment is overdue (more than 30 days after invoice). So far, I never had to apply them, though. There are last payment fee counters on the Internet (otherwise, the calculation would be extremely difficult, I guess...)

Be sure to point out, before accepting a P.O., that your payment terms are 30 days, and ask your customer to agree to this.

P.S. Sorry, if your customer is not in Europe, this of course does not apply to him.

Kind regards.

[Bearbeitet am 2007-04-25 11:24]


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N.M. Eklund  Identity Verified
France
Local time: 10:53
Member (2005)
French to English
+ ...
Charging fee is different from collecting Apr 25, 2007

Unfortunately, for small sums, you can charge late fees all you want, but you'll need a big thug named Vinnie to help you collect.
For larger sums, you can have even bigger thugs like collection agencies do the dirty work...though they'll cost more than Vinnie. ;D

Also, I recently calculated the late fees due (EU rules) on an average amount after being 5 months overdue, and it was 3 EUROS! So I didn't even bother wasting time on sending out a new invoice and just bugged the accountant till I got paid.

However, if you don't pay your social contributions on time, the penalty is 10%. I wonder how to officially apply that kind of rule to our invoices?


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peiling  Identity Verified
Germany
Local time: 10:53
Chinese to English
+ ...
TOPIC STARTER
Thank you all. Apr 25, 2007

Ritu - Yeah I do have such a clause but it's less than 5%.
Mark - That's a very good suggestion, re: including late payment fee in the next invoice, though who knows when the next project would be.
Christel - Thanks very much for the pointer. The EU directives states 7.0% daily fee... I wonder if anyone is implementing that?
N.M. Eklund - Yeah I agree it's not the same as collecting... but we have to start somewhere.


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Christel Zipfel  Identity Verified
Italy
Member (2004)
Italian to German
+ ...
It's not daily, of course! Apr 25, 2007

Pei Ling Haußecker wrote:


Christel - Thanks very much for the pointer. The EU directives states 7.0% daily fee... I wonder if anyone is implementing that?


It's (at least) 7% more than the legal interest, but on an annual base...


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peiling  Identity Verified
Germany
Local time: 10:53
Chinese to English
+ ...
TOPIC STARTER
Of course, that'd have made more sense. Apr 25, 2007

http://ec.europa.eu/enterprise/regulation/late_payments/index.htm
"Penalty interest due for late payments should be calculated on a daily basis (simple interest)."
and the rate is "the European Central Bank’s main refinancing rate plus 7 percentage points."

Thanks, Christel.

Christel Zipfel wrote:
It's (at least) 7% more than the legal interest, but on an annual base...


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