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Had to wait 3 months for payment. How can I calculate surcharge for late payment?
Thread poster: Jay Kim

Jay Kim  Identity Verified
South Korea
Local time: 03:23
English to Korean
+ ...
Jul 6, 2007

Hi all,


I took over re-translation and typeface recommendation for Korean web page translated from English text back on 4/13. I delivered whole new Korean translation and typeface recommendation to outsourcer same day. Total word count was 425 and I was supposed to quote 425 x $0.15 = $63.75. Terms of payment was 1 day after delivery but my outcourcer did not pay me with various excuses. I had to wait almost 3 months till today. Today I found that client's site was posting new Korean text done by me.

I am going to contact outcourcer and send him my quote. Though I like to know how I can calculate surcharge for late payment. Outsourcer was suppossed to pay me way back on 4/14 according to his job post. Outsourcer is in US and I like to know what would be norm practice for late payment in US. Any input will be much thanked.


Cheers,


Jay


[Edited at 2007-07-07 01:56]

[Edited at 2007-07-07 01:58]


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Buck
Netherlands
Local time: 19:53
Dutch to English
Good luck Jul 6, 2007

Hi. I don't know about other countries, but in the Netherlands, the standard term for payment is 30 days (though, this does in some instances run to 60). If they haven't paid you yet, I don't think they will pay any charge for tardy payment unless you take legal action. I never accept jobs from outside Europe, no matter how much they are offering. Did your invoice mention anything about late fees?

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Yvette Neisser Moreno  Identity Verified
United States
Local time: 13:53
Spanish to English
+ ...
Agree with Buck Jul 6, 2007

The standard in the US is also 30 days, as far as I know. Sometimes it's slightly over 30 days, but most companies do pay after about a month, though prodding is sometimes necessary. I have a clause on my standard invoice stating that I will charge a 10% late fee if payment is not received within 30 days of invoice. If 28-30 days pass with no payment, I usually send an email or call the client to remind them and inquire about the status. Then I will submit a "2nd invoice" which includes the fee for the actual work done, plus the late fee.

However, if your client did not agree to this beforehand, it may be a bit late to collect a late fee. Still, you should ask for it, and make clear to the client that in the future you will not work for them unless they can promise prompt payment. It would also be helpful to fellow translators if you did a Blue Board entry for this outsourcer.

Good luck,
Yvette


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Astrid Elke Witte  Identity Verified
Germany
Local time: 19:53
Member (2002)
German to English
+ ...
To give you an idea... Jul 6, 2007

I don't know about your country or the USA, but here in Germany we charge, at the moment, 5% above bank base rate by way of late payment interest (e.g. from the 31st day). At the moment that amounts to 8.19% per annum.

Astrid


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Samuel Murray  Identity Verified
Netherlands
Local time: 19:53
Member (2006)
English to Afrikaans
+ ...
Two sides to your coin Jul 6, 2007

Jay Kim wrote:
Terms of payment was 1 day after delivery but my outcourcer did not pay me with various excuses. I had to wait almost 3 months till today.


The norm is payment after 30 days, but that norm is irrelevant if the payment terms were payment 1 day after delivery, as you had said. On day 2, payment was late, regardless of the "industry norm" of 30, 45, 60, 90, or 99 days.

So, on the one hand, you're in the right. However, it may be very difficult to enforce any sort of late payment penalty.

How much to charge for late payment in the US, I don't know, but it would be normal in ZA to charge that which any retailer, franchise or bank would charge for delayed payment, which for ZA can be between 15% and 25% per year.

In your case, the total fee including 25% penalty for 3 months could therefore be:

$63.75 * 1.07 = $68.22

The amount "extra" is so little that I wonder if it would be worth your while making a fuss about it.


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MDI-IDM
United States
Local time: 18:53
Spanish to English
+ ...
What does your contract/invoice say? Jul 6, 2007

From my experience, late payment surcharges are almost impossible to collect unless the date of payment is specifically stated in writing, in the service contract, job order or payment order, along with a rate of interest applied to payments made after the due date.

In North America, the only client I ever had that voluntarily paid a surcharge because payment took longer than the contractually agreed period (30 days) was the Translation Bureau of the Government of Canada. Other government and non-government clients have taken up to 7 months to pay (some with the excuse that a third party was involved, others with none at all). Some take the position that "you should be happy that you're getting paid at all."

On the other hand, no matter how large an organization is, there is no good reason why they should make you wait longer than agreed for a payment. Your best defence is to get a written agreement on the payment date and late payment surcharges before you accept a job, and to contact the person who signed that agreement if it is not respected.


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Martin Wenzel
Germany
Local time: 19:53
English to German
+ ...
Translation agencies often couldn't give a toss... Jul 7, 2007

From my experience, many translation agencies are only kind when they are trying to find a translator, and once they have placed the translation or should I say once they have it back and it's alright, they basically couldn't give a toss...I am not saying all, but many.

My most recent experience is this: A habitual late-paying agency kept ignoring my email correspondence, so in the end I got so fed up having to write reminders that I decided to use a lawyer.

The day I got my lawyer involved, surprise, surprise, (No surprise, I knew that would happen) I got my payment.

The late fees and lawyer's costs, they happily ignored [I knew that would happen...].

Are we taking them to court, my lawyer asked? No,we aren't
for a mere xxx Euros [They knew that would happen...].

However, my lawyer friend found a couple of nice ways to hassle them [I didn't ask him to do so, but he "took the law into his own hands"].

Never mind, I don't intend to work for them again...

The money-grabbers will be the losers in the end, I hope, [but I don't know if this will ever happen...]


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Vito Smolej
Germany
Local time: 19:53
Member (2004)
English to Slovenian
+ ...
a similar case that ended in court Jul 7, 2007

Years ago I moved into a newly built flat. A band of burglars kept cleaned the block, among others my flat as well - it's easy nobody knows anybody, people forget even to lock their doors etc. It was not much, maybe 300 US$ of today´s money, but I got the police involved and when they got the hoodlums, the court called me in to testify.

After the state and the defense were finished with questions, the judge asked me if I had anything to add. I told the audience I expect the money to be paid back with interest.

I think I made the day for everybody in that room that morning - the loudest laugh I got from the accused.

Of course I never saw any money, neither the stolen 300 nor any interest. In a way the stories are identical: I bothered about the interest, assuming I will get my 300$ back - well, the justice is on MY side.

On a second thought I realized I was lucky I did not get knifed or hit on the head for those 300 bucks. Could just as well happen. We're all the time so close to that rim between normal and abnormal - without noticing it.

[Edited at 2007-07-07 08:38]


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Lawyer-Linguist  Identity Verified
Portugal
Local time: 18:53
Dutch to English
+ ...
No need to wonder ... Jul 7, 2007

Samuel Murray wrote:


In your case, the total fee including 25% penalty for 3 months could therefore be:

$63.75 * 1.07 = $68.22

The amount "extra" is so little that I wonder if it would be worth your while making a fuss about it.



You're right Samuel: de minimis non curat lex - the law does not concern itself with trivialities. On these type of figures, it's a waste of time and effort.

But am I missing something Jay?

You say: "I was supposed to quote..." or "am going to contact outsoucer and send a quote ..."

You are supposed to quote before the job is done and when that's accepted and the job is done you send an invoice.

If you haven't invoiced yet, I fail to see any question of "late payment" or the basis for a surcharge here. The outsourcer seems to be waiting for you to invoice.

Payment terms start running from date of invoice not date of delivery.

From what you've said - but obviously subject to any other information that may clear this point up - outsourcer isn't in breach.


[Edited at 2007-07-07 12:00]


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Samuel Murray  Identity Verified
Netherlands
Local time: 19:53
Member (2006)
English to Afrikaans
+ ...
What is an invoice? Jul 7, 2007

Lawyer-Linguist wrote:
Payment terms start running from date of invoice not date of delivery.


That is an interesting statement, LL. You make it sound like an invoice is a document with a fixed place in a transaction paper trail. But surely an invoice is merely a reminder to the client that the client owes money?

After all, the deal is made (the transaction takes place) when an agreement is reached. That is the contract (whether written or oral), and from the point when the contract is signed or the agreement is reached, both parties have a certain amount of time to deliver their side of the deal. The translator has to deliver the job, the client has to deliver money. Surely the invoice is strictly speaking not even necessary in such an arrangement.

The purchase order is also unnecessary, if the client had at any time said to the translator "I accept your terms" (or, technically more correct, "I offer that which you had indicated you are likely to accept"). The PO is simply a formalisation of the offer.

In fact, only once had a client ever insisted that I confirm the PO in some formalised way -- most clients seem to think that after the PO is issued, the deal is "in place". But legally speaking the PO can't be the binding document -- it can either be the offer (which the translator then accepts) or it can be a confirmation of the deal (which the translator had already accepted).

The same goes for the invoice, surely. It is simply a reminder to the client that the translator had delivered his part and that the client's part is still outstanding.

Therefore, is would not be unreasonable to expect payment, calculated from the date of delivery (or even the date of the purchase order, or the date of acceptance of the quote).

What do you say? I'm not the laywer...


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Lawyer-Linguist  Identity Verified
Portugal
Local time: 18:53
Dutch to English
+ ...
Feedback Jul 8, 2007

Samuel Murray wrote:

You make it sound like an invoice is a document with a fixed place in a transaction paper trail.



That's because it is - it's a very integral part of an audit trail.

It goes far wider than being a mere reminder to someone to pay up, it lists the services that have been provided, the price etc and as your bill it has particular significance from a legal, tax and accounting perspective.

Think of a restaurant, you take a client out for a meal, finish it but you don't pay without receiving the bill, even though you know you've got to pay. It's not just a reminder to you. It's a record of exactly what you consumed, which you can check for accuracy and use together with the receipt to claim as an entertainment expense (for example).

Likewise the translation client needs your invoice as one of the supporting documents to claim the expense in his books.

So, assuming of course that we aren't referring to a situation where money is passing under the table undeclared - when paperwork does tend to be on the scarce side, granted - legislation in a particular country will normally make an invoice (or its legal equivalent) a requirement before money can legally pass from A to B and be reflected in the respective accounts of the service provider and customer.

It goes beyond the direct translator-client relationship - because unlike a PO which can take varous forms (formal PO, mere e-mail, even a telephonic go-ahead if you're inclined to accept that), a third party, the taxman, is especially interested in invoices.

If the restaurant doesn't give me a bill, I won't pay. No different for our clients.











[Edited at 2007-07-08 15:56]


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Laurent Boudias  Identity Verified
Local time: 13:53
English to French
+ ...
question Jul 9, 2007

So what could prevent a client to claim that they never received the invoice? Obviously if the invoice was sent after the translated document.

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Lawyer-Linguist  Identity Verified
Portugal
Local time: 18:53
Dutch to English
+ ...
Nothing Jul 9, 2007

They can claim what they want. Same as they can claim a translation sucks or any other of a host of strategic ploys to avoid payment. Doesn't affect the status of an invoice in the payment process though.

That's why if you don't get an acknowledgement of receipt after asking for one by e-mail, you'd be well-adivsed to send one immediately by both ordinary and registered post.

Most legal systems provide for presumptions that something sent by registered post is deemed received after xxx number of days (i.e. even if the debtor never collects it), so you could then prove to court you did send one and for the purposes of your claim that it was "received".


[Edited at 2007-07-09 16:35]


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Samuel Murray  Identity Verified
Netherlands
Local time: 19:53
Member (2006)
English to Afrikaans
+ ...
I still wonder... Jul 9, 2007

Laurent Boudias wrote:
So what could prevent a client to claim that they never received the invoice?


Even if what LL says in http://www.proz.com/post/610961 holds true (and I'm not 100% about that), surely it would be possible to date payment after a certain date even if that date is not the date of the invoice.

I'm not an expert at law in my own country, but I'm confident that if the date of payment is stated in the contract (with or without an invoice being issued), it should be possible legally to claim late payment from that date, and not from the date of the invoice.

A client may say "I didn't receive the invoice", but what do you think would a client do if a translator had said "I didn't receive the PO" or "you had neglected to send a written go-ahead" as an excuse for not delivering on a job? All hell would break loose, I'd imagine.


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Lawyer-Linguist  Identity Verified
Portugal
Local time: 18:53
Dutch to English
+ ...
But that's the point .... (my capitalisation) Jul 10, 2007



I'm not an expert at law in my own country, but I'm confident that *IF* the date of payment is stated in the contract (with or without an invoice being issued), it should be possible legally to claim late payment from that date, and not from the date of the invoice.



Of course it's possible - you are free to contract however and whatever you want within the law (including to move away from the general rule that terms relating to payment/interest are made with reference to date of invoice), but you're moving the goalposts.

From what Jay says - and the observations I've made to date are based on that, not other "what ifs" - he had no written contract stating payment was due 24 hours after delivery. It's his word against the outsourcers.

In the absence of evidence, general rules kick in, and a court will look at the norm for the industry in question, which certainly isn't 24 hours.

If he doesn't invoice and get the ball rolling, he'll have nothing to work on. He needs to invoice if he hasn't already done so.

If he had invoiced, stating the payment terms were 24 hours, outsourcer would have a hard time disputing that now and interest would have started to run.

He didn't though and it will look highly suspect to a court, on a balance of probabilities and with nothing else to go on if its challenged, why someone would allege 24 hours but wait three months to even issue an invoice.

I'm not disputing what Jay says, I'm saying he doesn't seem to have issued an invoice and that's to his detriment.


A client may say "I didn't receive the invoice", but what do you think would a client do if a translator had said "I didn't receive the PO" or "you had neglected to send a written go-ahead" as an excuse for not delivering on a job? All hell would break loose, I'd imagine.


You mean all hell doesn't break loose if you're not paid on time?

I'm on top of my debtors immediately if the money isn't in my account on due date - no hell breaks loose but they know it will if it's not sorted out very quickly. And no, I haven't lost clients by running a tight ship.

And FWIW, a translator would be squarely within his/her right to insist on a written PO before starting. It wouldn't be an excuse, it would be stating a fact if he/she hadn't already confirmed they were going to work otherwise.

If he/she had confirmed already there wouldn't be much point, would there?

Fact is invoices do sometimes genuinely go missing. That's why it's so important to insist on ack. of receipts and to send by ordinary and registered post if you struggle to get an acknowledgement.

[Edited at 2007-07-10 12:18]


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