Our customer of a large translation project can not pay in advance
Thread poster: Fredrik Pettersson

Fredrik Pettersson  Identity Verified
Hong Kong
Member (2009)
English to Swedish
+ ...
Nov 10, 2009

We have just received our first major translation project (100,000 words) to be translated from English into Chinese. The problem is that the customer has clearly stipulated in their Transmittal note that they pay 30 days after receiving the finished translation. This is written in bold characters.

Our translation agency has just started and we can't take such a big risk that in the end, the customer will not pay us.

Furthermore, when I search the internet I can not find any information about this medical company from UK.

On their Transmittal note, it says "Trade register number: pending". What does this mean?

It seems like a very serious company with sub-branch in Belgium, but above two circumstances makes me hesitate a little.

Most grateful for any advice about how to handle this. Shall we require advance payment 50 % (as we have stipulated on our website)? Or shall we trust that this is a reliable company that will pay us?
How can we check this UK-based company?


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Erik Freitag  Identity Verified
Germany
Local time: 02:11
Member (2006)
Dutch to German
+ ...
What's the problem, cash flow management or risk management? Nov 10, 2009

Fredrik Pettersson wrote:

Our translation agency has just started and we can't take such a big risk that in the end, the customer will not pay us.



After reading your question, I'm not quite sure what your problem is. Is it risk management or cash flow management?

If it is risk management: You should of course check your customer. Being unable to find them in the phone book or in the internet is a serious warning sign. Without further information, I would not accept jobs from such a company.

If your problem is cash flow management: I'm wondering what payment terms you are planning to negociate with your translators? Are you planning to pay them in advance? In other words: Maybe your agency isn't ready to take the plunge yet if it can't handle this kind of payment terms.

HTH,
best regards,
Erik




[Bearbeitet am 2009-11-10 16:34 GMT]


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Tom in London
United Kingdom
Local time: 01:11
Member (2008)
Italian to English
I would be cautious Nov 10, 2009

Fredrik Pettersson wrote:

We have just received our first major translation project (100,000 words) to be translated from English into Chinese. The problem is that the customer has clearly stipulated in their Transmittal note that they pay 30 days after receiving the finished translation. This is written in bold characters.

Our translation agency has just started and we can't take such a big risk that in the end, the customer will not pay us.

Furthermore, when I search the internet I can not find any information about this medical company from UK.

On their Transmittal note, it says "Trade register number: pending". What does this mean?

It seems like a very serious company with sub-branch in Belgium, but above two circumstances makes me hesitate a little.

Most grateful for any advice about how to handle this. Shall we require advance payment 50 % (as we have stipulated on our website)? Or shall we trust that this is a reliable company that will pay us?
How can we check this UK-based company?


Hmmm. You've never worked with these people before and can't find out any information about them. They are talking about a really big job - your first job for them.

Those being the circumstances, I would insist on agreeing a payment plan as a precondition of you accepting the job - say 33.3% in advance, 33.3% halfway through the job, and the remaining 33.3% on completion. For big jobs that will take a long time, that is normal business practice and perfectly reasonable.

It enables you to start work in a reasonably peaceful state of mind, and it gives them a guarantee that you only expect to be paid in full on completion of the work.

One thing you should NOT do is accept financial risk on behalf of the other party. Their financial situation is not your problem.

If they refuse to negotiate a payment plan, I would politely decline the work. The risk would be too great and it would be all on your side.

[Edited at 2009-11-10 17:04 GMT]


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 02:11
Member (2005)
English to Spanish
+ ...
Better safe than sorry Nov 10, 2009

Fredrik Pettersson wrote:
Most grateful for any advice about how to handle this. Shall we require advance payment 50 % (as we have stipulated on our website)? Or shall we trust that this is a reliable company that will pay us?

Personally I would not take the risk in case not being paid could your company in serious trouble. This could be the case of you don't do the translation yourselves in-house but via freelancers you will have to pay even if you are not paid.

If you are unsure about the existence of this company, just express your concerns to the company itself and let them prove that they are a legitimate company, explaining that unfortunately there is a certain degree of uncertainty in the market at present. The first people you should ask is your potential customer and not us!


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Terry Richards
France
Local time: 02:11
French to English
+ ...
Do they have escrow in China? Nov 10, 2009

If so, that might be a solution. The money is held by a trusted 3rd party (often a bank) so that you know it is there and the customer knows that they will receive the work before the money is paid.

Terry.


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 22:11
English to Portuguese
+ ...
No way! Nov 10, 2009

If you can't properly ascertain their credit, and they cannot pay for part of the service up front, it's not worth the risk.

It might be worth reminding this client that translation is not a commodity, so if they eventually don't pay, you won't be able to sell it as "used" or "refurbished" to someone else.

Demand at least 20% up front, and offer partial deliveries up to what's been paid already. Keep them aware that any failure or delay in payment for the next batch will cause the work to halt immediately, with the corresponding extension of the final deadline.

On the other hand, play it wide open with your translators. Tell them exactly what the situation is, and keep them posted on the developments.

There are two extreme types of agencies. One is a stone wall between translator and end-client. For all matters, the agency is the translator's only client. On the other end, the agency and the translator are a team to serve the end-client's needs. I could list a few PMs in this world of the second type, for whom I've walked the extra mile more often than they could believe.

In such high-risk situations, it's safer to have the translators on your side, as the client is suspected to be the one trying to rip you (all) off. In other situations, it's the PM's choice.


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Tom in London
United Kingdom
Local time: 01:11
Member (2008)
Italian to English
yes... Nov 10, 2009

José Henrique Lamensdorf wrote:

.... it's safer to have the translators on your side....


Yes, especially because you're going to need the translators for other future projects.


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Laurent KRAULAND  Identity Verified
France
Local time: 02:11
French to German
+ ...
With Tom and José... Nov 10, 2009

nothing to add.

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Charlie Bavington  Identity Verified
Local time: 01:11
French to English
Ah, trust, trust, trust.... Nov 10, 2009

Fredrik Pettersson wrote:
Shall we require advance payment 50 % (as we have stipulated on our website)? Or shall we trust that this is a reliable company that will pay us?
How can we check this UK-based company?


If your customer had read the threads I have been reading on this very website over the last 2 weeks or so, there is no way on earth they will be sending money in advance to China (and judging from his comments on one of those threads, I doubt very much that at least one of the people who has already posted on this thread would, either).

I know that Dun and Bradstreet offer a corporate credit rating service.
Failing that (or indeed in addition), you could try taking out credit insurance against the risk of non-payment.


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LegalTransform  Identity Verified
United States
Local time: 20:11
Member (2002)
Spanish to English
+ ...
Even if you charged the client the lowest possible amount... Nov 10, 2009

$20,000 is still too much of a risk. Ask for 50% ($10,000) up front, so that you can at least pay your translators if something goes wrong. Do you have any working capital or insurance?

Fredrik Pettersson wrote:

We have just received our first major translation project (100,000 words) to be translated from English into Chinese. The problem is that the customer has clearly stipulated in their Transmittal note that they pay 30 days after receiving the finished translation. This is written in bold characters.

Our translation agency has just started and we can't take such a big risk that in the end, the customer will not pay us.

Furthermore, when I search the internet I can not find any information about this medical company from UK.

On their Transmittal note, it says "Trade register number: pending". What does this mean?

It seems like a very serious company with sub-branch in Belgium, but above two circumstances makes me hesitate a little.

Most grateful for any advice about how to handle this. Shall we require advance payment 50 % (as we have stipulated on our website)? Or shall we trust that this is a reliable company that will pay us?
How can we check this UK-based company?


[Edited at 2009-11-10 22:46 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 01:11
Member (2007)
English
+ ...
Have you looked them up? Nov 10, 2009

They should be on file at Companies House if they are a limited company:
http://www.companieshouse.gov.uk//index.shtml

The reference on their documentation is probably the "National Trade Register" - that's optional but registration as a company is obligatory.


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Geraldine Oudin  Identity Verified
United Kingdom
Japanese to French
+ ...
They can't or they don't want to? Nov 11, 2009

In your message, you say "our customer cannot pay in advance". In which case I would say: run away. If they can't pay at least partly upfront, how can you know they will be able to pay you in the end?

Now if it is just a matter of payment policy, I would say: negociate. I always ask for 50% upfront with new customers. You could also ask for payment in instalments every two weeks. As Tomas said, better safe than sorry.

Don't act desperate, or they will exploit you even more. If they don't accept your offer, fine: there are plenty of other customers out there who will, you don't need them (even if you think you do).

Good luck!


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DZiW
Ukraine
English to Russian
+ ...
any compromise? Nov 11, 2009

Well, I would look at it like this:
1) Our customer
2) of a large translation project
3) can not pay
4) in advance

Rethink priorities and negotiation range, so
(a) either decline such an offer (safer but *may* ruin potential market)
(b) negotiate mutual concessions (requires more input)

Shortly, is what you could get worth what you are going to spend?


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