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7 invoicing mistakes that may be keeping you from getting paid

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Walter Landesman  Identity Verified
Uruguay
Local time: 08:16
Member (2005)
English to Spanish
+ ...
common sense Apr 17, 2011

All this is just, obvious and plain common sense.

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Krzysztof Kajetanowicz  Identity Verified
Poland
Local time: 13:16
English to Polish
+ ...
mixed bag :) Apr 17, 2011

Not Putting Specific Information on Them


I imagine this must be the #1 problem with big corporate clients. You have to understand how the procurement process works, or at least follow whatever they've told you about invoicing (instead of getting self-righteous about being "independent").


Not Stating Your Late Payment Terms
(...)
Many freelancers are scared of instituting a late fee in their contracts but I’m not sure why. I’m sure your client charges one to its customers. Why shouldn’t you, too? If you have late payment terms, it should be in the contract, but reminding the client on the invoice covers makes it crystal clear.


Seriously, who charges a late payment fee for a two-week delay? How much could it be? In my country, it's all regulated by civil law, and statutory interest is currently 13% p.a., so I could charge about 0,5% of my fee for two weeks. 2 euros for a EUR 400 project.

Civil law regulations are also why it's unnecessary in many jurisdictions to put late payment terms in the contract.


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Samuel Murray  Identity Verified
Netherlands
Local time: 13:16
Member (2006)
English to Afrikaans
+ ...
Uncommon common sense Apr 17, 2011

Walter Landesman wrote:
All this is just, obvious and plain common sense.


Yes, these types of e-zine articles usually contain just plain common sense, but it does serve to remind us about the common sense that is often not commonly applied.

1. Sending them too early or too late
The author of the e-zine article works with advance payment, so her warning here is to not send the invoice before you're sure that the client had agreed that you have the job.

2. Sending them to the wrong person
Good advice -- carefully check the correspondence and the purchase order to see whom you should send the invoice to. I also CC the invoice to the PM that I dealt with.

3. Forgetting to put your logo on them
This relates to people who use automated or online invoicing systems who fail to personalise their invoices. I agree completely that branding is important. I don't have a logo, but my name is written in very large letters at the very top of the invoice -- that's my branding.

4. Not putting specific information on them
The author here is concerned about freelancers who put a date and an amount on the invoice, and nothing else. Obviously the invoice should contain a description of the job (or a PO order number, if the client has it). Adding the deadline date and the name of the PM can't hurt either, in case the accountant wants to query something with the PM in a hurry.

5. Forgetting to say how you want to be paid
In my current country (NL), this is a legal requirement. An invoice is incomplete if it doesn't state how and when payment should be made.

6. Not Stating Your Late Payment Terms
I agree with Christopher -- this is just silly. On a USD 500.00 invoice the late payment amount would be USD 0.12 per day. If paymet is 45 days late, that's USD 5.40 extra. Besides, a client who pays late usually pays late because he has administrative problems, so slapping him with a late payment penalty isn't going to make him pay faster.


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Nicole Schnell  Identity Verified
United States
Local time: 04:16
English to German
+ ...
Interesting: Sending an invoice too late? Apr 17, 2011

What is that supposed to mean? 5 days late, 5 months late, 5 years late?
The date an invoice is sent is up to the seller - the translator, that is, and nobody else.


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Samuel Murray  Identity Verified
Netherlands
Local time: 13:16
Member (2006)
English to Afrikaans
+ ...
Sending an invoice late Apr 17, 2011

Nicole Schnell wrote:
The date an invoice is sent is up to the seller - the translator, that is, and nobody else.


Are you saying that the two parties can't agree beforehand that if an invoice is sent later than X days after the end of the project, that it won't be paid? Do you mean that any such a clause in a contract between the translator and the client is necessarily invalid?

If the translator had agreed at the start of the project that an invoice sent later than X days after the project will not be paid, do you think the translator should be angry at the client (or at himself) if he tries to send the invoice later than that? I'm asking this because many clients state in their purchase orders that invoices submitted X days late will not be paid, and if a translator accepts the PO, he accepts that clause too, doesn't he?

On the other hand, by law, how late can an invoice be (if nothing was specifically agreed between the parties) before it becomes no longer payable? What is the situation in your country?


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Nicole Schnell  Identity Verified
United States
Local time: 04:16
English to German
+ ...
That is indeed the question. Apr 17, 2011

Samuel Murray wrote:

Nicole Schnell wrote:
The date an invoice is sent is up to the seller - the translator, that is, and nobody else.


Are you saying that the two parties can't agree beforehand that if an invoice is sent later than X days after the end of the project, that it won't be paid? Do you mean that any such a clause in a contract between the translator and the client is necessarily invalid?

If the translator had agreed at the start of the project that an invoice sent later than X days after the project will not be paid, do you think the translator should be angry at the client (or at himself) if he tries to send the invoice later than that? I'm asking this because many clients state in their purchase orders that invoices submitted X days late will not be paid, and if a translator accepts the PO, he accepts that clause too, doesn't he?

On the other hand, by law, how late can an invoice be (if nothing was specifically agreed between the parties) before it becomes no longer payable? What is the situation in your country?




I have never seen any clause in any contract or PO that states: "invoices sent later than xxxx days/months from delivery date shall be void".

If there is an agreement in regard to the allotted time-frame, fine. I would never sign such a stupid thing, though. Because in this case, the client can always claim that they have never received your invoice.

I am not sure about the legal situation in the US in general as it varies from state to state, but I have invoiced jobs in the US that were nearly two years old, and they were paid.


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Samuel Murray  Identity Verified
Netherlands
Local time: 13:16
Member (2006)
English to Afrikaans
+ ...
Invoice expiry dates Apr 17, 2011

Nicole Schnell wrote:
I have never seen any clause in any contract or PO that states: "invoices sent later than xxxx days/months from delivery date shall be void".


About half of my clients' purchase orders state that. One has 2 weeks, but the majority has 1, 2, 3 or 4 months. Some clients also refuse to pay invoices that weren't sent by snail mail (this may be a legal requirement in their own countries, though). Some clients only pay invoices that were submitted on their own invoice template (though I'm sure legally speaking any invoice that comply with the client's country's laws should be a valid invoice).

I would never sign such a stupid thing, though. Because in this case, the client can always claim that they have never received your invoice.


That is not really an argument, though. The client who wants to be dishonest like that can just as easily claim that he didn't receive your translation.


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Nicole Schnell  Identity Verified
United States
Local time: 04:16
English to German
+ ...
Amazing. Apr 17, 2011

Samuel Murray wrote:

Nicole Schnell wrote:
I have never seen any clause in any contract or PO that states: "invoices sent later than xxxx days/months from delivery date shall be void".


About half of my clients' purchase orders state that. One has 2 weeks, but the majority has 1, 2, 3 or 4 months. Some clients also refuse to pay invoices that weren't sent by snail mail (this may be a legal requirement in their own countries, though). Some clients only pay invoices that were submitted on their own invoice template (though I'm sure legally speaking any invoice that comply with the client's country's laws should be a valid invoice).

I would never sign such a stupid thing, though. Because in this case, the client can always claim that they have never received your invoice.


That is not really an argument, though. The client who wants to be dishonest like that can just as easily claim that he didn't receive your translation.



There is absolutely no sarcasm or humor included in my reply, BTW. This is a serious topic.

1. I would never accept any clause that tells me how to run my company.
2. All invoices contain my scanned signature. It is a fully legal document.
3. What if you break both of your arms and you have to spend several weeks in hospital? You can't type up the invoice for the recent 125k words. Why would you want to lose that money because you didn't "invoice within the agreed time-span".
?


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Erik Freitag  Identity Verified
Germany
Local time: 13:16
Member (2006)
Dutch to German
+ ...
late payment fees Apr 17, 2011

Krzysztof Kajetanowicz wrote:

Seriously, who charges a late payment fee for a two-week delay? How much could it be? In my country, it's all regulated by civil law, and statutory interest is currently 13% p.a., so I could charge about 0,5% of my fee for two weeks. 2 euros for a EUR 400 project.


I certainly do in some cases. My overdue fine in these cases is 5 EUR for the first reminder, 10 EUR for the second, no matter what the invoice amount is. I usually do not additionally charge interest, although I'd be legally entitled to.


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Lori Cirefice  Identity Verified
France
Local time: 13:16
French to English
stating late payment terms Apr 17, 2011

Samuel Murray wrote:



6. Not Stating Your Late Payment Terms
I agree with Christopher -- this is just silly. On a USD 500.00 invoice the late payment amount would be USD 0.12 per day. If paymet is 45 days late, that's USD 5.40 extra. Besides, a client who pays late usually pays late because he has administrative problems, so slapping him with a late payment penalty isn't going to make him pay faster.



Stating late payment terms on invoices is actually a legal requirement in France, not sure about other countries. Supposedly, charging interest for late payment is also "required" although I have never seen it practiced.


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Samuel Murray  Identity Verified
Netherlands
Local time: 13:16
Member (2006)
English to Afrikaans
+ ...
@Nicole Apr 17, 2011

Nicole Schnell wrote:
There is absolutely no sarcasm or humor included in my reply, BTW. This is a serious topic.


I did not read sarcasm or humour into your reply.

2. All invoices contain my scanned signature. It is a fully legal document.


I'm not sure what you mean here (or what you're responding to).

A signature on a piece of paper does not turn that piece of paper in to a "fully legal document", in the context of this discussion. If your own government's tax department has certain non-negotiable requirements for an invoice, and your invoice doesn't have those things, then no signature of any kind on it will turn it into a "fully legal document" in this sense.

3. What if you break both of your arms and you have to spend several weeks in hospital? You can't type up the invoice for the recent 125k words. Why would you want to lose that money because you didn't "invoice within the agreed time-span".


Don't your contracts contain acts-of-god clauses?


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Nicole Schnell  Identity Verified
United States
Local time: 04:16
English to German
+ ...
We need to get back to the topic Apr 17, 2011

Samuel Murray wrote:

A signature on a piece of paper does not turn that piece of paper in to a "fully legal document", in the context of this discussion. If your own government's tax department has certain non-negotiable requirements for an invoice, and your invoice doesn't have those things, then no signature of any kind on it will turn it into a "fully legal document" in this sense.


It is all about invoices, not contracts, and the fact that your client has no saying about how you are supposed to run your accounting department in your country. If your country considers an invoice carved into the sole of a shoe a valid invoice as long as it contains all the required information, so be it. My point is that self-employed translators must maintain their own bookkeeping for their OWN company and should never, ever adapt to any foreign customers with odd desires. Why? If you are ever audited at random, you are responsible for YOUR books, not how much you have pleased any clients around the world.

For this very reason I have always and successfully refused to send any invoices via any automated invoicing systems of any outsourcer. I am not willing to pay my accountant to decipher any paperwork in Hebrew, French or any format that is not issued by my own little translation office and that has not been written on our own stationery.

The court of jurisdiction is at all times the city, state and country of the seller (the translator). If this city, state and country will allow you to send invoices three years after the job has been delivered, the invoice must be paid.


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Krzysztof Kajetanowicz  Identity Verified
Poland
Local time: 13:16
English to Polish
+ ...
uhm Apr 17, 2011

Nicole Schnell wrote:

The court of jurisdiction is at all times the city, state and country of the seller (the translator).


I'm not sure if this is correct. First, you're confusing the law of jurisdiction and the court of jurisdiction. These are not the same. A French court could be compelled to rule, as it sometimes is, based on Danish law. Second, the parties may decide which law and which court the contract is subject to. And if they don't, certain pretty complicated provisions of private international law kick in.

If this city, state and country will allow you to send invoices three years after the job has been delivered, the invoice must be paid.


Now we're getting to the point. Let's say you're running a business in the European Union. VAT is harmonised on EU level, invoicing is very formalised, and unless you're willing get in VAT trouble, you need to issue and receive your invoices within a certain period. If you don't receive an invoice on time, input VAT (whether self-charged or charged by the seller) may become non-deductible. Plus, most countries require an invoice to deduct the cost for income tax purposes, and deducting the cost 2 years later is likely to be a problem.

You're going to require timely invoices from your partners. There's freedom of contracting, and they can take it or leave it.

[Edited at 2011-04-17 18:23 GMT]


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Nicole Schnell  Identity Verified
United States
Local time: 04:16
English to German
+ ...
To keep it simple and easy Apr 17, 2011

Krzysztof Kajetanowicz wrote:
These are not the same. A French court could be compelled to rule, as it sometimes is, based on Danish law. Second, the parties may decide which law and which court the contract is subject to. And if they don't, certain pretty complicated provisions of public international law kick in.


Thanks, I mixed that up, speaking from my US-based perspective.


Now we're getting to the point. Let's say you're running a business in the European Union. VAT is harmonised on EU level, invoicing is very formalised, and unless you're willing get in VAT trouble, you need to issue and receive your invoices within a certain period. If you don't receive an invoice on time, input VAT (whether self-charged or charged by the seller) may become non-deductible. Plus, most countries require an invoice to deduct the cost for income tax purposes, and deducting the cost 2 years later is likely to be a problem.

You're going to require timely invoices from your partners. There's freedom of contracting, and they can take it or leave it.


At times, and for the sanity of your accounting it may actually make sense to send an invoice early January instead of, say, middle of December. Why? Your taxes are based on the revenues received, not when any invoices were written. If you want to keep your bookkeeping clean, it is recommendable to have the matching invoice to any amounts received. If, however, any outsourcer will insist on receiving an invoice, say, within 14 days after delivery to keep THEIR bookkeeping clean and easy, which is none of my business, it will cost me money in terms of additional bookkeeping time. Desirable?


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WriuszTran
Germany
Local time: 13:16
Why? Apr 17, 2011

Nicole Schnell wrote:
I am not sure about the legal situation in the US in general as it varies from state to state, but I have invoiced jobs in the US that were nearly two years old, and they were paid.


Why would you send an invoice after two years if you're not in a coma? I'm asking that because I got an invoice from a physician (for € 21 - additional fee on top of an invoice I had already paid) after exactly a year, and it's not cool. At all.

I wouldn't add a clause that it's not allowed, I guess I should add a clause that "you're not cool at all" if you send an invoice after a year. That'll work.


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