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Poll: Do you offer discounts for prompt payment?
Thread poster: ProZ.com Staff

ProZ.com Staff
Local time: 12:50
SITE STAFF
Jul 10, 2013

This forum topic is for the discussion of the poll question "Do you offer discounts for prompt payment?".

This poll was originally submitted by Leon Hunter. View the poll results »



 

Julian Holmes  Identity Verified
Japan
Local time: 04:50
Member (2011)
Japanese to English
No, never Jul 10, 2013

Why should I?

If I live up to my contractual obligations of returning quality translation, customers should honour their's and cough up the spondoolicks on time.

Why should customers be allowed to pay late? icon_confused.gif

On second thought, this poll does beg the question of what "prompt" means -- "on time" or "ahead of time."

Small edit

[Edited at 2013-07-10 13:18 GMT]


 

Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
Never Jul 10, 2013

But we do offer penalties for late payment

 

Tim Drayton  Identity Verified
Cyprus
Local time: 22:50
Turkish to English
+ ...
No Jul 10, 2013

No, but I offer a 10% discount for advance payments.

 

Gudrun Wolfrath  Identity Verified
Germany
Local time: 21:50
English to German
+ ...
No. Jul 10, 2013

Do I receive extra payment for prompt delivery? Certainly not.

 

Triston Goodwin  Identity Verified
United States
Local time: 13:50
Spanish to English
+ ...
Yes Jul 10, 2013

We offer a 5/10 net 30 deal, where the client receives a 5% discount if they pay the entire invoice within 10 days, otherwise the entire amount is due within 30 days. After 30 days, they get a 5% late fee, which jumps up to 10% after 15 days. An additional 10% is added every 15 days after that.

Typically we never have to go past the 5% late fee, but one scammer now owes me $15,000 thanks to late charges.


 

neilmac  Identity Verified
Spain
Local time: 21:50
Spanish to English
+ ...
Other Jul 10, 2013

Not usually, but I have offered discounts on a couple of occasions to speed things up. It worked both times.

 

Michael Harris  Identity Verified
Germany
Local time: 21:50
Member (2006)
German to English
Yes Jul 10, 2013

why not? It is usual here inGermany to offer 3% discount if the payment is made within 10 days. Better if the money is in my bank account than elsewhere.
It does not happen very often, but if the company suggests this, then why not?


 

Antonio Contreras  Identity Verified
Spain
Local time: 21:50
Member (2011)
English to Spanish
+ ...
Shorter payment terms is what we need Jul 10, 2013

I agree with Michael. I offer discounts for prompt payment if I still have room for lowering rates a little bit. I like having the money in my bank account asap after finishing the task. We translators as well as other freelancers should not have to wait so long to get paid. Do you pay your dentist 30 days after getting your teeth checked up?

Happy translating and regards from sunny Berlin!

Antonio


 

Tatty  Identity Verified
Local time: 21:50
Spanish to English
+ ...
Early payment Jul 10, 2013

Prompt payment is a bit of a mistranslation. I don't offer any discount for early payment myself, I want the full whack!

 

Allison Wright  Identity Verified
Portugal
Local time: 20:50
German to English
+ ...
No. Jul 10, 2013

Payment in advance may attract a small discount.

I do have to ask myself what the percentage discount offered represents in words: How many words am I prepared to translate for free? I also have to be clear as to my motives for doing so.

It is worth noting that requests for discounts after the job has been accepted (and therefore all terms and conditions agreed) will not be favourably received.


 

Theo Bernards (X)  Identity Verified
France
Local time: 21:50
English to Dutch
+ ...
2% for payment within 3 days Jul 10, 2013

Mind you, that is three actual days, not business days. Internet banking makes such a small discount proposition a powerful collection tool and I got the idea from remembering during my time as a credit & collections executive, where a large multinational client deducted 2% on every invoice when they made instant payment within 3 days.

 

Luca Tutino  Identity Verified
Italy
Local time: 21:50
Member (2002)
English to Italian
+ ...
How do you discounts on the invoices? Jul 10, 2013

Triston Goodwin wrote:

We offer a 5/10 net 30 deal, where the client receives a 5% discount if they pay the entire invoice within 10 days, otherwise the entire amount is due within 30 days. After 30 days, they get a 5% late fee, which jumps up to 10% after 15 days. An additional 10% is added every 15 days after that.

Typically we never have to go past the 5% late fee, but one scammer now owes me $15,000 thanks to late charges.


I wonder how can the invoice reflect such a complex structure (or any other discount structure). Do you need to send updated invoices every time the actual amount that should be paid changes? Or what else do you send?

[Edited at 2013-07-10 10:14 GMT]


 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 17:50
English to Portuguese
+ ...
This stems from local interest rates Jul 10, 2013

Julian Holmes wrote:

On second thought, this poll does beg the question of what "prompt" means -- "on time" or "ahead of time."


That was my first thought.

Depending on the circumstances, late payments may downgrade a client's status with me, so next time they might not get the priority they need, thus having to someone else, if they need a quick turnaround.

Anyway, I consider any payment term longer than COD as equivalent to me granting a loan to that client. This means that I'll be - to some extent - financing the operating capital for their business. I compare their option to secure a bank loan to pay me COD with the possibility of me securing a bank loan to pay my bills until they pay me.

Either of us, upon securing a loan, will have to pay interest to the bank, which will vary depending on the country where we do it. Checking the table shown on this page today, July 10th, 2013, I see:
Brazil (where I am) = 8% per month
USA = 0.25% per month
Euro zone = 0.50% per month

Supposing we adopted these interest rates, it becomes obvious that a client in the USA not having the cash to pay me right away, and assuming that they'll have it 30 days later, will have a 7.75% gain on the amount they pay me by getting a loan from a local bank, compared to having me get a loan from a bank in Brazil. For a client in the euro zone, this figure would be 7.50%.

I think sustainable business must be worthwhile for both parties involved, so I'm always seeking fairness and balance.

I state my rates for payment in two weeks via PayPal. As PayPal charges 6.5% fees and adopts 3.5% lower exchange rates, I offer my clients a 10% discount on payment via any other method. PayPal also delays payment in Brazil by some time between 3 business days and two weeks, so I may actually get paid one month after having delivered the job. Therefore I offer an additional ~8% discount for COD payment.

Bottom line is that my clients are free to choose their payment term/method, being fully aware of the costs they entail.

Back to the original question, yes, I do offer discounts on faster payment, however these don't come out of my pocket. The discount comes from PayPal (who won't be getting those fees) and/or greedy Brazilian banks (who won't be indirectly granting a loan to an overseas translation clients).


 

Lior Bar-On  Identity Verified
Local time: 22:50
Hebrew to English
+ ...
The flip side is demanding more for late payment Jul 10, 2013

Sometimes clients think that we are translation and banking services, so when they offer net + 180 payment terms, they can expect to pay 50% more for the same amount of work.

 
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