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Help with proposal for payment terms for a very large project
Thread poster: Rebeca Martín Lorenzo

Rebeca Martín Lorenzo  Identity Verified
Spain
Local time: 04:14
Member (2014)
English to Spanish
+ ...
Mar 15, 2014

Dear colleagues,

I would very much appreciate your advice on this. I should reply to an agency's proposal for payment terms on Monday or Tuesday at the latest. These are the facts:

I have been offered an EN-ES translation project of over 100.000 words - approx. 447 standard pages of 1500 characters without spaces in total, consisting of 2 units of 223 pages approx. each - by an agency for which I have never worked before.
I have done some research and found several reports of very late payments, including 8 out of 13 in the Blue Board, although most of them date from 2004-2005, and one from 2008.
3 people reported payment on time, though.


In the course of the selection procedure and negotiations, we agreed on a certain rate per standard page of 1500 characters at the end of January.
As a final step in their selection procedure, I (and other candidates) did an unpaid sample translation for the end client. Two sample translations received positive feedback from the client, including mine.

They now would like to assign the job to me if I agree to a reduced rate i.e. the same price I quoted for one page of 1500 characters, but for each page of 1800 characters instead.

I have replied that I stick to the rate as previously agreed, and I suggested that in any case we should agree on certain terms of payment, including perhaps an advance payment and then partial payments upon partial deliveries, considering the high volume of the project and the fact that I have never worked for them before.

They have made the following proposal for payment terms (insisting, however, that "in turn" I reduce my rate to some extent):

10% advance payment for each unit.

30% payment within 15 days after I deliver the first part of each unit.

60% payment within 15 days after I delivery the second part of each unit.

They add that they need a Single Invoice for the job, that they will issue one Purchase Order for the whole job and they suggest I send them pro forma invoices for each partial payment.

What do you think? Do you find these terms of payment reasonable?
I was thinking that 45% payment within 15 days from each partial delivery would be fairer.
Besides, I'd rather issue actual invoices as opposed to pro forma invoices, and receive separate Purchase Orders for each part of the job.

Many thanks in advance for your opinions and suggestions!

Rebeca


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Elene P.  Identity Verified
Georgia
Local time: 06:14
Member (2007)
Georgian to English
+ ...
too risky Mar 15, 2014

Too many negotiations, I would not risk my time
In the end if you take this one (with reduced payment) you won't be able to take others with normal rate..
+ all negotiations regarding the late payment (if it happens)
will take a lot of nerves and time
not worth of all that money

IMHO - to take big projects only from the old clients


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Sheila Wilson  Identity Verified
Spain
Local time: 03:14
Member (2007)
English
+ ...
Why do they need you for this? Mar 15, 2014

New translators should always be given small and/or non-urgent tasks first, with tried and tested ones being preferred. That has to be the best way. So, why not now? Do none of their regulars want the job? Or do they all want higher rates? Does this agency have no regulars, perhaps?

Unless there is some good reason, e.g. some specific knowledge that's needed, I'd agree that this sounds very likely to deteriorate into a nightmare.

Did they know your rate before testing? If so, why are they wasting your time?


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Bernhard Sulzer  Identity Verified
United States
Local time: 22:14
English to German
+ ...
On your terms only Mar 15, 2014

Rebeca Martín Lorenzo wrote:

I have been offered an EN-ES translation project of over 100.000 words - approx. 447 standard pages of 1500 characters without spaces in total, consisting of 2 units of 223 pages approx. each -


Hi Rebeca,
The amount of characters without spaces in your first posting in this thread is 1944, with spaces it is 2384. The word count is 419.
If we take an average of 400 words for 1800 characters and a total page count of 447, the total word count is 178,800.
My first question is this: how much time have you been given to do this or how much time was agreed on?
In any case, if you were to translate 3000 words per day, 5 times a week (= 15,000 words per week), it would take you 11.92 weeks (appr. 3 months) to do. If you have other jobs to do, it will take you much longer.
If this is the only job for three months and you depend on a steady stream of income from the client, you would have to ask for payments that secure that income. In addition, such large projects always have to be paid in installments, you can't wait and hope they will pay after you completed the project. That would be way too risky, especially here, because of ...


Rebeca Martín Lorenzo wrote:
... several reports of very late payments, including 8 out of 13 in the Blue Board, although most of them date from 2004-2005, and one from 2008.
3 people reported payment on time, though.


If that is the case, I personally would ask for 50% up front. I doubt they will agree to that.
As an alternative, You could agree on delivering a certain amount of work per month, with 50% of the first month's work due up front, and the remainder of the amount due for the first month's work and 50% of the next month's work immediately following the delivery of first month's work.
This would have to be agreed upon in writing by the client.
If the client fails to make these payments, you reserve your right to discontinue and ask for any money still due to you for work that you already provided.

Rebeca Martín Lorenzo wrote:
They have made the following proposal for payment terms (insisting, however, that "in turn" I reduce my rate to some extent):

10% advance payment for each unit.
30% payment within 15 days after I deliver the first part of each unit.
60% payment within 15 days after I delivery the second part of each unit.


I would assume that you already quoted a rather low rate for the whole project, which I believe is somewhere between EUR 0.06 and 0.10/source word. That's very low and you can be sure that the client charges the end client at least 3 if not 4 times that amount. If the rate is considerably higher, I would suggest a discount of 2.5% for the payment scheme I outlined above, only applicable and deductible from the last payment, if it is received within 3 business days after completion.

Rebeca Martín Lorenzo wrote:
They add that they need a Single Invoice for the job, that they will issue one Purchase Order for the whole job and they suggest I send them pro forma invoices for each partial payment.


As long as you have a signed contract with them that includes the payment plan, that's fine. If they default on any payment, all bets are off and you have a right to stop the work without any penalties to you but they instead will owe you money for whatever you have done up to that point. There should also be a clause in the contract adding a penalty for them because you will have lost out on other clients/work and now have to go looking for new work.

Rebeca Martín Lorenzo wrote:
What do you think? Do you find these terms of payment reasonable?
I was thinking that 45% payment within 15 days from each partial delivery would be fairer.
Besides, I'd rather issue actual invoices as opposed to pro forma invoices, and receive separate Purchase Orders for each part of the job.


The terms need to be reasonable to you and they don't seem to be. If you are one of the two translators approved for the project by the end client, you are in the power seat and should state what you want to earn and when you want to get paid. If they can't accept that, don't do it. But I have to say that you should always state the terms you can live with, no matter what the project is. It's your business, your reputation, and your life.

I also must say I agree with Sheila - they don't sound like a company with a trusted group of translators but have burnt too many bridges by not paying on time and rely on new translators who have never worked for them. That usually means they are not professional, neither are there prices and they can't really be trusted, even if you put things in writing. I can't recommend doing such a big job for someone you have never worked with and if you do it, make sure you get paid for every little part you do right away BEFORE you start the next part.

HTH

B

[Edited at 2014-03-15 17:50 GMT]


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Rebeca Martín Lorenzo  Identity Verified
Spain
Local time: 04:14
Member (2014)
English to Spanish
+ ...
TOPIC STARTER
Thanks for your valuable comments + Some clarifications Mar 15, 2014

Sheila Wilson wrote:

New translators should always be given small and/or non-urgent tasks first, with tried and tested ones being preferred. That has to be the best way. So, why not now? Do none of their regulars want the job? Or do they all want higher rates? Does this agency have no regulars, perhaps?

Unless there is some good reason, e.g. some specific knowledge that's needed, I'd agree that this sounds very likely to deteriorate into a nightmare.

Did they know your rate before testing? If so, why are they wasting your time?



Dear Sheila,

They looked for someone with experience translating EU legal documents. As they are not based in Spain, it seems possible to me that they did not have a 'regular' in my language combination (EN-ES) with that experience.

And yes, they did know my rate (already revised at their request) when I translated the sample. So I share your point and am determined to stick to that agreed rate.


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Rebeca Martín Lorenzo  Identity Verified
Spain
Local time: 04:14
Member (2014)
English to Spanish
+ ...
TOPIC STARTER
In the absence of a contract, would a Purchase Order including payment terms suffice? Mar 15, 2014

Bernhard Sulzer wrote:

If we take an average of 400 words for 1800 characters and a total page count of 447, the total word count is 178,800.
My first question is this: how much time have you been given to do this or how much time was agreed on?


Hi Bernhard,
1500 characters without spaces in English equals 250-300 words, so I have taken an average of 275 words for my estimates.
On the basis of 275 words for page of 1500 char. and a total page count of 447, the total word count would be around 122,760.
In their last email they mention I would have approximately 7 weeks for each unit, so 14 weeks in total.

However, in January, before they knew the actual total count, they asked for my estimated daily output for this particular project and I gave them a "low" estimate, i.e. 1250 words per day, and they seemed happy with it - so in fact I will also need to discuss that 14 weeks timeframe.

I personally would ask for 50% up front. I doubt they will agree to that.
As an alternative, You could agree on delivering a certain amount of work per month, with 50% of the first month's work due up front, and the remainder of the amount due for the first month's work and 50% of the next month's work immediately following the delivery of first month's work.
This would have to be agreed upon in writing by the client.
If the client fails to make these payments, you reserve your right to discontinue and ask for any money still due to you for work that you already provided.


That is a very reasonable payment scheme, thanks! But wouldn't it be advisable to issue a proper invoice for each payment?

I would assume that you already quoted a rather low rate for the whole project, which I believe is somewhere between EUR 0.06 and 0.10/source word. That's very low and you can be sure that the client charges the end client at least 3 if not 4 times that amount.


You're right on my quoted rate (which maybe is low, but not really very low these days in my language combination, I'm afraid). So certainly I will not agree to any further reduction.

As long as you have a signed contract with them that includes the payment plan, that's fine.


They have not mentioned any contract, only an 'official' Purchase Order - If the PO included the payment terms, do you think it would suffice?

Thanks again for your time and for your insights, they are very helpful.


[Edited at 2014-03-15 21:38 GMT]


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Bernhard Sulzer  Identity Verified
United States
Local time: 22:14
English to German
+ ...
You need guarantees Mar 15, 2014

Rebeca Martín Lorenzo wrote:

That is a very reasonable payment scheme, thanks! But wouldn't it be advisable to issue a proper invoice for each payment?


Yes, just issue the invoices when you deliver the translations, incl. the new 50% down payments. But they will have to understand that the payment must be turned around before you can continue.

Bernhard Sulzer wrote:
As long as you have a signed contract with them that includes the payment plan, that's fine.

Rebeca Martín Lorenzo wrote:
They have not mentioned any contract, only an 'official' Purchase Order - If the PO included the payment terms, do you think it would suffice?


I issue my own order forms - they are contracts, signed by me and then co-signed by the purchaser. In addition, I then receive a PO.
If they list everything you ask for in their own PO, yes. Important is that the payments are being made in smaller units and on time.

Add on:
It must be put down somewhere that failure to pay will result in cancellation of the project.

B

[Edited at 2014-03-15 22:03 GMT]


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jyuan_us  Identity Verified
United States
Local time: 22:14
Member (2005)
English to Chinese
+ ...
Why didn't they use word count directly in the first place? Mar 16, 2014

Bernhard Sulzer wrote:

Rebeca Martín Lorenzo wrote:

I have been offered an EN-ES translation project of over 100.000 words - approx. 447 standard pages of 1500 characters without spaces in total, consisting of 2 units of 223 pages approx. each -


Hi Rebeca,
The amount of characters without spaces in your first posting in this thread is 1944, with spaces it is 2384. The word count is 419.
If we take an average of 400 words for 1800 characters and a total page count of 447, the total word count is 178,800.


B

[Edited at 2014-03-15 17:50 GMT]


This is a weird way of calculating the volume. Why didn't they use word count directly in the first place?


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Heinrich Pesch  Identity Verified
Finland
Local time: 05:14
Member (2003)
Finnish to German
+ ...
I would not trust them Mar 16, 2014

They probably only collect credentials from translators in order to compete for the project, if they get it they will probably split between the cheapest freelancers they have in their database.
Contacting relatively inexperienced freelancer with "big projects" is an old trick. You could get something for a low rate and run after payment a long time.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 04:14
Member (2005)
English to Spanish
+ ...
Too risky Mar 16, 2014

Rebeca Martín Lorenzo wrote:
I have been offered an EN-ES translation project of over 100.000 words - approx. 447 standard pages of 1500 characters without spaces in total, consisting of 2 units of 223 pages approx. each - by an agency for which I have never worked before.
I have done some research and found several reports of very late payments, including 8 out of 13 in the Blue Board, although most of them date from 2004-2005, and one from 2008.
3 people reported payment on time, though.

This job is very risky indeed. Let me explain why:

1. They ask for a very low rate, and keep asking for discounts in exchange for being paid a little amount in advance, which means that you are financing their business on top of working for a low rate.

2. They use a weird way of counting the volumes, and there is a risk that they change their mind about the method of counting on the fly. Counting a job is as simple as counting the words.

3. You have never worked for them before, which means that they are not using their usual English-Spanish translators. Being a very frequent language pair, and given that they have been in business for a decade, there must be some reason why they are not using the translators they have used in the past. Maybe other translators are busy, but it is also possible that their previous translators do not want to work for them again for some reason. A decade is more than enough for an agency to establish a solid cooperation with their translators.

4. You have hard evidence that in the past they did not honour their commitments with a number of people.

I know that the prospect of three months of steady work sounds lovely, but personally I would not do this job unless they paid your expected rate and each delivery in advance, i.e. they pay a third of the amount in advance and a month later you deliver that third of the work, and the same for the rest of the work.

They are surely aware of their Blueboard record, so you can refer to that as the reason why you need advance payments.


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Rebeca Martín Lorenzo  Identity Verified
Spain
Local time: 04:14
Member (2014)
English to Spanish
+ ...
TOPIC STARTER
Counts based on characters Mar 16, 2014

jyuan_us wrote:


Rebeca Martín Lorenzo wrote:

I have been offered an EN-ES translation project of over 100.000 words - approx. 447 standard pages of 1500 characters without spaces in total, consisting of 2 units of 223 pages approx. each -



B

[Edited at 2014-03-15 17:50 GMT]


This is a weird way of calculating the volume. Why didn't they use word count directly in the first place? [/quote]

Hi jyuan_us,

1500 characters without spaces is the EC Translation DG measure for one page (known as one "standard page"). This agency works, or at least has worked in the past, as contractor for EU institutions and in projects related to the EU. Not only they claim that in their website, but I have also checked it in my little research.
The job in fact relates to EU legislation (I have seen a sample myself). However, it is not that they are participating in a new tender - When I asked about it, they said that this particular project is ongoing into other languages already, but now they need someone for translation into Spanish.


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Samuel Murray  Identity Verified
Netherlands
Local time: 04:14
Member (2006)
English to Afrikaans
+ ...
Weird way of calculating volume Mar 16, 2014

jyuan_us wrote:
This is a weird way of calculating the volume. Why didn't they use word count directly in the first place?


Which method is weirder... per word or per character? Surely per word would be weirder, since not all words have the same length, but all characters do. Why then do you consider per-word to be less weird than per-character?


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Samuel Murray  Identity Verified
Netherlands
Local time: 04:14
Member (2006)
English to Afrikaans
+ ...
My comments Mar 16, 2014

Rebeca Martín Lorenzo wrote:
I have been offered an EN-ES translation project of over 100.000 words ... consisting of 2 units ...

[After a lengthy qualification process, they] now would like to assign the job to me if I agree to [give them a 20% discount]. ... They have made the following proposal for [advance] payment [in exchange for the reduced rate]:

* 10% advance payment for each unit.
* 30% payment within 15 days after I deliver the first part of each unit.
* 60% payment within 15 days after I delivery the second part of each unit.


Sounds fair to me. The assumption is that if you don't get the payment on time, you simply stop working on the project, inform them immediately that you've stopped working on their project and will now accept tasks from other clients, while you wait for them to pay the agreed amount. As soon as you receive the amount, you'll finish the other client's job as soon as possible and start working on their project again. This means that if they delay payment by e.g. 10 days, it may be that their project is delayed by 15 days, if you have to spend 5 days to finish a job from another client. If they understand all of this, then I think you've got a winner. You can't lose (well, to be true, you can lose... if they decide to cancel in mid-project and not pay you for the work that you haven't sent them yet).

They add that they need a Single Invoice for the job, that they will issue one Purchase Order for the whole job and they suggest I send them pro forma invoices for each partial payment.

Besides, I'd rather issue actual invoices as opposed to pro forma invoices, and receive separate Purchase Orders for each part of the job.


I have no idea what "pro rata invoices" are (I mean, I know what they are but I don't know how they work). Are you sure you can't work on the basis of pro rata invoicing? Why not? Or, if you can but you don't want to, can you tell us why (for those of us who don't know what the pros and cons of pro rata invoicing is)?

I was thinking that 45% payment within 15 days from each partial delivery would be fairer.


It certainly would be nicer. It depends on what you normally do. Most of my clients pay 30-90 days after invoicing, so for me the scheme proposed by the client sounds very reasonable, but perhaps you are used to shorter payment terms.


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Rebeca Martín Lorenzo  Identity Verified
Spain
Local time: 04:14
Member (2014)
English to Spanish
+ ...
TOPIC STARTER
Pro forma invoices Mar 17, 2014

Samuel Murray wrote:

I have no idea what "pro rata invoices" are (I mean, I know what they are but I don't know how they work). Are you sure you can't work on the basis of pro rata invoicing? Why not? Or, if you can but you don't want to, can you tell us why (for those of us who don't know what the pros and cons of pro rata invoicing is)?


Hi Samuel,
Apparently, pro forma invoices (+ eventually the ordinary invoice for the total amount) would be Ok for this large assignment as long as I have a signed service purchase contract including the agreed payment terms, not only a formal Purchase order.

I hope this answers your question. Thanks for your sharing your opinions.


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Giovanni Guarnieri MITI, MIL  Identity Verified
United Kingdom
Local time: 03:14
Member (2004)
English to Italian
I would never risk it... Mar 17, 2014

especially with an agency I never worked before, with reports of late payment and with such high volume. I would request advance payment for each "tranche" I was going to translate... i.e., start translating that specific tranche only after receiving payment for it. No money, no work...

[Edited at 2014-03-17 13:13 GMT]


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