How do I get a client to pay very early?
Thread poster: Thomas Johansson

Thomas Johansson  Identity Verified
Peru
Local time: 01:22
Member (2005)
English to Swedish
+ ...
Apr 26, 2010

I just finished a quite big job a few days ago. The total invoice is for about 3,500 euro.

As it is, I would prefer to somehow receive the payment within the next 10 days or so. How can I get my client to pay that quickly? (Should I offer a discount? If so, how much?)

My client is a UK translation agency and the end client is a quite big Swedish company. There may possibly be a middleman between the translation agency and the end client.

Thank you,

Thomas

[Edited at 2010-04-26 22:17 GMT]


 

Neil Coffey  Identity Verified
United Kingdom
Local time: 06:22
French to English
+ ...
You didn't agree this beforehand...? Apr 26, 2010

Thomas Johansson wrote:
I just finished a quite big job a few days ago. The total invoice is for about 3,500 euro.

As it is, I would prefer to somehow receive the payment within the next 10 days or so.


This may not help you, but usually you should agree to the payment terms as part of agreeing to do the translation in the first place. So if you haven't agreed anything particular, then the agency will probably want to apply whatever its standard payment terms are (which will probably be between 30 days and "don't hold your breath", depending on the agency).

Offering a discount for immediate payment might work, but in truth serious agencies will be more concerned about protecting their long-term cash flow than saving a few euros in the short term.


 

Mats Wiman  Identity Verified
Sweden
Local time: 07:22
Member (2000)
German to Swedish
+ ...

MODERATOR
2-3% Apr 26, 2010

From my German expeience:

Payment in 8 days = 3% so called cash discount
Payment in 10 days= 2%

For what it's worthicon_smile.gif


 

Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 07:22
Member (2005)
English to Spanish
+ ...
Too late Apr 27, 2010

I agree with Neil. It is very late to discuss this with the customer now. You should have agreed a partial advance payment upon delivery or before starting the job.

Since customers generally prefer to pay as late as possible, I think it will be hard to convince them to pay now. One option is to follow Mats advice and offer them a discount, although I feel that 3% will not be enough and you will have to lose more if you really need the money now.

Good luck!


 

Michael Wetzel  Identity Verified
Germany
Local time: 07:22
German to English
prompt payment discount Apr 27, 2010

Dear Thomas,
If you haven't already sent your invoice, you can include a note on it detailing a discount for prompt payment. You ought to also call the agency and get in touch with bookkeeping or whoever makes payment decisions; otherwise, no one will ever notice it on the invoice.

For a basic definition and typical terms, see Wikipedia (en) "discounts and allowances" and the sub-heading "1.1.1. Prompt payment discount".

I have no idea how typical this is in the UK. You might want to do a google regional search to see what kinds of businesses use this and under what terms.

Hope that helps,
Michael

P.S.: If you try this, please post the results. I would be interested to hear if it works.


 

Thomas Johansson  Identity Verified
Peru
Local time: 01:22
Member (2005)
English to Swedish
+ ...
TOPIC STARTER
Thank you! Apr 27, 2010

Mats Wiman wrote:

From my German expeience:

Payment in 8 days = 3% so called cash discount
Payment in 10 days= 2%

For what it's worthicon_smile.gif


I'll go for the 3%. It may be worth the difference between a midsommar with matjessill and nypotatis in summery Skåne or another chilly June in Buenos Aires.

Thomas


 

Dr. Andrew Frankland  Identity Verified
Spain
Local time: 07:22
Member (2007)
English
+ ...
Payment at 30 days according to UK company law Apr 27, 2010

I can't remember the exact legislation, but as far as I remember all invoices submitted to UK companies have to be paid at 30 days otherwise interest becomes due and debt-recovery fees can be charged.

See:

http://www.payontime.co.uk/legislation/late_payment_eu.html

Hope this helps,

Andy


 

Angela Dickson  Identity Verified
United Kingdom
Local time: 06:22
French to English
+ ...
Invoices do not have to be paid at 30 days Apr 27, 2010

Dr. Andrew Frankland wrote:

I can't remember the exact legislation, but as far as I remember all invoices submitted to UK companies have to be paid at 30 days otherwise interest becomes due and debt-recovery fees can be charged.

See:

http://www.payontime.co.uk/legislation/late_payment_eu.html

Hope this helps,

Andy


The page you link to has a link to an explanation of the EU Directive in question, which contains the following line:

"The Directive does not harmonise payment periods, but creates a statutory right to interest 30 days after the date of the invoice, unless another payment period has been negotiated in the contract." (my bold text)

http://ec.europa.eu/enterprise/policies/single-market-goods/fighting-late-payments/index_en.htm

I often see it said here that there is a statutory 30-day payment limit in the EU/UK, but this is just not true. It depends on what you negotiated with the company at the outset.

For Thomas: it might be worth offering 2-3% off in return for immediate payment, but it would have been better to do this when negotiating terms before the job started.


 

Krzysztof Kajetanowicz (X)  Identity Verified
Poland
Local time: 07:22
English to Polish
+ ...
benefit vs. cost Apr 27, 2010

What would be the normal payment deadline? If a 3% discount is needed to speed things up by, say, a month, that's equivalent to borrowing for a month at a rate of 3% a month. Or, an effective rate of 42.6% per annum. I'm sure there's a cheaper way of borrowing EUR 3,500.

 

Annett Hieber  Identity Verified
Germany
Local time: 07:22
English to German
It's not worth trying that now - Apr 27, 2010

in my opinion. It makes you appear unprofessional and might damage your reputation. That's not worth it.

You should have negotiated the payment terms b e f o r e accepting the order. That's how it is done. In view of such a large order, you could have tried to negotiate a step-by-step payment, for example. Perhaps one third upon delivery, two thirds after 30 days. Or offering a discount for payment within 10 days.

Annett


 

Thomas Johansson  Identity Verified
Peru
Local time: 01:22
Member (2005)
English to Swedish
+ ...
TOPIC STARTER
What I did Apr 27, 2010

Michael Wetzel wrote:
If you haven't already sent your invoice, you can include a note on it detailing a discount for prompt payment. You ought to also call the agency and get in touch with bookkeeping or whoever makes payment decisions; otherwise, no one will ever notice it on the invoice.


On the invoice, under the total due, I included a note within parentheses saying:
"XXX euro if paid no later than May 6, 2010"

Also, in my email to the client, to which I attached the invoice, I mentioned very briefly that there was a "3% discount for quick payment".

That's it, now I'll just see what happens. I doubt it will lead to anything, but I think I can reasonably do this much at least. I'll post a note here if it works.

Thank you, everyone, for your feedback.

Thomas


 

Michael Wetzel  Identity Verified
Germany
Local time: 07:22
German to English
but 30 day if no other agreement Apr 28, 2010

@ Andrew and Angela
Thanks for the info and the clarification:

If no other agreement was met by both parties, the payment deadline IS 30 days in many EU and many other European countries.

That is probably not relevant here or in any other work with professional agencies, but it is very often the case with direct clients and is a useful fact cited with a good explanation its legal sources.

The extremely high interest rate is also interesting 7+%!


 

Krzysztof Kajetanowicz (X)  Identity Verified
Poland
Local time: 07:22
English to Polish
+ ...
as a matter of fact Apr 28, 2010

Out here the deadline is 30 days maximum, regardless of what the parties have agreed to. Even between businesses! This was put into effect after wholesalers and producers had complained about supermarket chains enforcing very long payment deadlines. As with any restriction on the freedom of agreement, this is obviously a dead letter. Customers demand longer deadlines on a take-it-or-leave-it basis. The law is only actually put to work after a business has gone bust and the receiver claims penalty interest for payment in excess of 30 days from the business's customers.

 

Bryan Crumpler  Identity Verified
United States
Local time: 01:22
Dutch to English
+ ...
EPIs Apr 28, 2010

I've offered early payment incentives for clients for a number of years now and no fish have ever bitten the bait, and the discounts were much higher than than 2 and 3%... so I don't think things like that work.

Try asking for a retainer next time or negotiating a payment schedule.

Example:

Retainer: 20%
On-delivery: 30%
30 days net: the remaining 50%

Other options:

Depending on your relationship with your local bank, they might be willing to give you a loan using the invoice as collateral or might be willing to factor it (i.e. buy your invoice and take on the risk based on the credit-worthiness of the agency/end-client). If you factor it, you'll have your $$ within 24 hours, but factoring is generally for businesses with high turnover and a lot of invoicing and not so much a personal relationship with their customers.

't is up to you!


 


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