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Why does it take so long to get paid?
Thread poster: Evi Prokopi
Evi Prokopi  Identity Verified
Local time: 14:29
English to Greek
+ ...
Oct 16, 2008

Hi, all!

I've been wondering about this recently. Why do translation agencies need 30, 45, or even 60 days to pay freelancers? Is it bound to the time they are paid by their clients?

Cheers,

Evi


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 09:29
English to Portuguese
+ ...
Several reasons Oct 16, 2008

In my humble opinion...

If everything is done properly, a good, really professional translation agency should pay within something between a few hours and a maximum of 14 days for "loose jobs". Exceptions are: a) when the end client has a constant flow of work with that agency, and it would be a waste of time doing the whole process at every job closed; and b) when the project is too large, to the point of some steps of the cycle below being significantly extended.

As I see it, the longest case should work this way:
1. Translator delivers job. If there is separate proofreading, prrofreader delivers it, but it is deemed "finished".
2. PM receives job, and examines it to the extent possible, considering s/he's not always familiar with either one or both languages involved. If there are any issues, PM solves them with translator/proofreader. This should take 3 days max.
3. PM sends the job to the end client with an invoice. There must be someone ready, expecting it there, otherwise there wouldn't be a deadline. This person examines the job thoroughly, approves it, and authorizes payment. Let's giv'em 4 days for it.
4. Let's assume that processing takes 3 days for the money to be available at the translation agency.
5. And let's assume that it takes the agency another 3 days to sort out all received monies and payables, and pay the translator.
6. Considering time zones, the translator may get the money only on the next day.

So it adds up to 14 days, giving ample time for each one to play their part. The short case is when the agency is small and the translator is well-known there. The translator e-mails the finished job to the agency owner, and a few minutes later gets a confirmation message ending with "your payment is already on PayPal".


I don't believe any translation agency - again, except for accounts in permanent activity - delivers the job without getting paid immediately, or within just a few days. This would be different from most service-providing trades around the world.

So why do they need so much time to pay the translator? I see a few possibilities...

1. Cash flow problems. They are not making enough profit for the agency owner to afford his or her lifestyle. So they receive COD, pay in 30 or 60 days, and in the meantime there is plenty of cash available. But they must keep these jobs coming, otherwise one day they'll go broke. And sometimes they really do! Just browse the Blue Board.

2. Reoutsourcing. There are 2 or more agencies in a succession between the end-client and the translator, which extends the cycle. Maybe one or more of these are in the cash flow situation above, which is enough to overextend the cycle.

3. Intention to flee. A fly-by-nite translation agency gets a large, usually urrrrgent job from a friend, hires a translator, gets the job done, delivers, gets paid COD, and then has 60 days to unplug their impressive web site, erase their tracks completely, and vanish forever, long before the translator realizes s/he's been played for a sucker.


So I've made it a strict policy of just saying "no" to any job offer with payment beyond 30 days. Even if none of the three above possibilities is true, that's twice as much as the time needed for doing everything by the book.

There are many really great, professional translation agencies around. Unfortunately, there are also many small-time operators just after a quick buck.


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Juan Jacob  Identity Verified
Mexico
Local time: 06:29
French to Spanish
+ ...
All bulls***. Oct 16, 2008

Invoices, proofreaders, deadlines, stock market, gas prices, war in Irak, administration, whatever.
You work, you get paid, that's it.
As José Henrique says, no more than 15 days.
Otherwise, pure speculation on your work.
Some pennies more in their bank account.
Agencies system.
Not good.
Speculation... sounds familiar, doesn't it?
Just see what's going on in Wall Street. That's just it... wrong capitalist system.


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DIShirai
Japan
Local time: 20:29
Japanese to English
accounts work Oct 16, 2008

Hi,

I'm new on this site and to posting and while Mr Lamensdorf made a full answer, I was reminded of when I used to work for an accounts department for a large corporation in the UK. It didnt matter if a company's invoice was large or small, payments were all processed in the same way and all were sent out on the same cheque run day each month. A whole chain of command and checking of work received to satisfaction etc could add an extra week or so onto the process. This often meant that payments were sent 30 - 45 days (or more) after receipt of invoice. What with dealing with millions of pounds and hundreds of different companies, it was impractical to make payments any quicker for individuals.

I am sure most agencies are on a much smaller scale but it might provide some balance, as even though I had to deal with many people who disliked the delay in payment, we were a reputable company.

In my opinion, as long as a company is honest and reliable then I don't see the harm in getting paid over 30 days.



[Edited at 2008-10-16 02:47]


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Gillian Searl  Identity Verified
United Kingdom
Local time: 12:29
Member (2004)
German to English
The is the worst disadvantage of being a freelancer Oct 16, 2008

and the bugbear of my life. I have just instigated an additonal email reminder 15 days before the invoice is due in the hope to speed things up. Here's the text - you might find it of use.

_____________________________________________________________
Over recent months it has become clear that some of my customers are
paying invoices more slowly. As a result I have large sums that are
overdue. In turn this produces cash flow problems – the situation
appears to be getting worse.
EU Directive 2000/35/EC
(http://ec.europa.eu/enterprise/regulation/late_payments/index.htm) states a 30 day payment term as both normal and reasonable
throughout Europe. Interest is to be charged on late payments. I
produce good quality translations to meet your tight deadlines. I
would therefore request that you respect the 30 day payment terms
shown on the invoice.
You will find below a list of invoices that are due for payment and
the dates on which they are due. Please confirm by email the date on which payments will be made. If there is a problem with the invoice or
you have not received it please inform me as soon as possible.
Best regards,


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Williamson  Identity Verified
United Kingdom
Local time: 12:29
Flemish to English
+ ...
Cash-flow problems. Oct 16, 2008

Mostly cash-flow problems: An example from my past : A Brussels agency wins the translation of a construction specification, outsources it to a number of translators, but does not have the resources to pay those translators.
Translations are returned and checked. Remarks and corrections are made.
Sometimes a dispute arises between agency and translator, because the reviewer uses other words as those found in official documents.
As José Lamensdorf says that takes about 15 days.
If a that point the agency has to pay their translators, they would not have any money left on their bank-account or be in the red.
15 days have passed. They deliver to their customer and send an invoice. This customer pays after say 30 days. They pay their translators.
However, if things go wrong with their customer and they have to chase their money, translators have to wait too and 45 days may become 60 or in case of countries with a slow payment mentality like Italy 90 or more.
If as an agency, you do not have enough of your own money (not from credit) to finance a major project of say about €25000 don't be in the business of being a go-between. By chance an Italian agency sent a payment with their bank-statement. On that bank-statement was €12,500. Translators are no credit institutions.


[Edited at 2008-10-16 07:30]


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Evi Prokopi  Identity Verified
Local time: 14:29
English to Greek
+ ...
TOPIC STARTER
So... Oct 16, 2008

So basically one of the reasons may be that their initial client doesn't pay them fast enough? I work with some agencies outside the EU and even though it takes them long to pay me (it was agreed in advance) they always pay me as agreed.

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Ralf Lemster  Identity Verified
Germany
Local time: 13:29
English to German
+ ...
Lack of capital Oct 16, 2008

Hi Evi,

So basically one of the reasons may be that their initial client doesn't pay them fast enough?

That's only part of the issue (more importantly, that part should be none of your business) - what exacerbates the situation is often a lack of capital which forces intermediaries to wait for incoming payments.

Best regards,
Ralf


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xxxMarc P  Identity Verified
Local time: 13:29
German to English
+ ...
Lack of capital Oct 16, 2008

Ralf Lemster wrote:

...what exacerbates the situation is often a lack of capital which forces intermediaries to wait for incoming payments.


Sub-prime customers...?

Marc


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Nicole Schnell  Identity Verified
United States
Local time: 04:29
English to German
+ ...
Gambling Oct 16, 2008

Is what I call this.

We don't have contracts with the agency's client, but with the agency alone.

Any delay is a breach of contract.


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Ralf Lemster  Identity Verified
Germany
Local time: 13:29
English to German
+ ...
Definitely sub-prime Oct 16, 2008

Marc P wrote:

Ralf Lemster wrote:

...what exacerbates the situation is often a lack of capital which forces intermediaries to wait for incoming payments.


Sub-prime customers...?

Marc

...except that they still have access to cheap funding (in the guise of 30/60/90+ days' terms).

Best, Ralf


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 09:29
English to Portuguese
+ ...
A solution? Oct 16, 2008

Ralf Lemster wrote:
...except that they still have access to cheap funding (in the guise of 30/60/90+ days' terms).


So is it possible to assume that if every single translator in the world unwaveringly turned down each and every job offer with payment beyond, say, 20 days for at least half a year we might have the whole translation market cleansed from predators, leeches and other such species?


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Erzsébet Czopyk  Identity Verified
Hungary
Local time: 13:29
Member (2006)
Russian to Hungarian
+ ...
could not agree more... Oct 17, 2008

José Henrique Lamensdorf wrote:
In my humble opinion...
If everything is done properly, a good, really professional translation agency should pay within something between a few hours and a maximum of 14 days for "loose jobs". Exceptions are: a) when the end client has a constant flow of work with that agency, and it would be a waste of time doing the whole process at every job closed; and b) when the project is too large, to the point of some steps of the cycle below being significantly extended.
***
I don't believe any translation agency - again, except for accounts in permanent activity - delivers the job without getting paid immediately, or within just a few days. This would be different from most service-providing trades around the world.

In my NOT humble opinion...
If everything is done properly, a good, really professional translation agency should pay within 1 to 14 days.
Other exceptions:
a) framework agreement with the translator (1 collected invoice per month, issued 22th and paid until last day of the month on a regular basis (and it would be a waste of time doing the whole process at every job closed).
b) when the project is too large, with significantly extended payment (anyway, as an agency owner, I can declare, the company has to have separate funds to finance these projects).
c) I just have a translator who sent me back by post our order form signed with remark: my Moneybookers account *****. Where is the invoice??? I cannot pay without that.



[Módosítva: 2008-10-17 00:59]


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Evi Prokopi  Identity Verified
Local time: 14:29
English to Greek
+ ...
TOPIC STARTER
I thought... Oct 17, 2008

Thank you for your participation!

To be frank, I thought that it had to do with the time they get paid by their clients. But it seems -If I understand well- that the agencies get paid as soon as they deliver the translations to their clients.


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Ralf Lemster  Identity Verified
Germany
Local time: 13:29
English to German
+ ...
Theoretically... Oct 17, 2008

Hi José Henrique,
So is it possible to assume that if every single translator in the world unwaveringly turned down each and every job offer with payment beyond, say, 20 days for at least half a year we might have the whole translation market cleansed from predators, leeches and other such species?

I wouldn't go that far, but it would certainly have a cleaning effect.

Best, Ralf


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