Risk management for translators and interpreters

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See also: Detecting and reacting to false job offers and other scams


Contents

Overview

This page is dedicated to the normal risk management precautions that translators and interpreters should take as part of their normal professional activities.

Qualification of new outsourcers

The following are basic things to remember when approached by a new outsourcer. Remembering these things will save any translator plenty of immediate and long-term trouble.

1. Identify the customer: An email address is not enough of an identification of a customer. Ask the customer for their website, full company name, address, and telephone. Check that you are receiving the emails from the customer's domain, not via Gmail, Yahoo, etc. (some scammers use the name of a legitimate agency but use a Gmail or Yahoo account). Verify all details yourself via web, Yellow Pages, Companies House, etc. Call them at least once to the number you found in the web (not the one you were given) and try to get in touch with the person who emailed you. Use the call to ask for some missing detail. Use Google Maps' Streetview (or other maps website) to check the place. A supposedly important agency will rarely operate from an old shotgun house somewhere... or from a vacant field... or a street that does not exist!

2. Assess the outsourcer's reliability as a business partner: Try to find out about the reliability of the customer in terms of clear and responsive communications, correct specifications, and payments. For instance, if you are a Proz.com member, you can look for the company in the Blue Board. Even if you really need the work, do not underestimate the negative comments if you find any about an outsourcer. Translators rarely give a bad opinion about an outsourcer unless there are important reasons to do so. On the other hand, read good comments carefully, since some people write a good comment after a first job and regret it later. The good comments that have a real face value are those from people who have done a number of jobs for the outsourcer over a long time including payment dates.

3. Identify the job: Ask your customer for the files to be translated, examine them, count the words, and identify any other tasks to be done on them: potentially lengthy preparations before translation, formatting after translations... Calculate the wordcount, as well as the time for the ancillary tasks if they will take a lot of time.

4. Identify the time of delivery: Ask for a clear statement from the customer as to the delivery date and delivery time of that day, including the time zone. If no delivery time is given, do make sure you make a statement that you will deliver by the end of the delivery day (i.e. by "EOB", end of business).

5. Establish the cost: Make sure the exact rate to be paid (not just for new words, but also for matches in the case of CAT jobs) is made clear before accepting the job.

6. Ask for a purchase order: Once the customer and job have been established, ask for a proper purchase order (all companies and agencies have this format) or an email from your prospect stating their full company details (full physical address, phone, website, contact email), exact extent of the job (wordcount, files to be translated, any other tasks expected from you), exact total cost (ideally also your rate, rate breakdown in CAT-based jobs, price per hour if work per hour is involved...), delivery date and time, including the time zone (or a statement that the time is EOB), and exact payment terms (how many days after your invoice you will be paid and by which method).

Some customers get impatient about all this and sometimes ask you whether they can send you the PO later on because they are busy. You must explain to them that it is in the interest of both parties to clarify the job fully before going ahead, and that as a professional you cannot start a job for a new customer without a proper order stating all details.

Never start to translate a single word without establishing all these things! Otherwise trouble is coming your way one way or the other. It is far better to let a customer go (if they get impatient about establishing the job or simply don't answer your questions) than having to suffer in a few days... and for many days.

Legitimate customers will patiently and gladly work all this out with you and will make an effort to give you whatever you need for the job (including the PO).

Bad customers (and scammers, and non-payers) will not answer some things, will delay the answers until delivery time, or will change the conditions during the execution of the job. By establishing everything in a clear manner, you protect yourself from trouble and prove that you will act in a professional manner.

Credit insurance

Any business-- including the business run by a freelance translator-- includes risk, and one of the biggest risks is non-payment of invoices.

One solution is credit insurance. You can insure against such risks, at a price, and the cost of insurance should be set against the likely risk of loss of income from non-paying customers. If the insurance premium exceeds what you estimate to be your probable risk of non-payment (e.g. 5% of your turnover), then risk insurance may be of no interest, but if it is less than your estimated bad debts, credit insurance is a paying proposition. If you have an overdue payment or a non-payment, and the defaulting company is insured, you will receive a percentage (usually 75%) of the unpaid invoices from your insurer.

There are other advantages of using credit insurance. If you have a policy with a credit insurance company, it will tell you the credit rating of any company you are interested in working with, or currently working with, and that in itself can avoid some nasty surprises later. The down side is that if you deal with a company that your insurance provider refuses to insure, and you are stuck with an overdue payment or a non-payment, you have to bear the loss.

Knowledge of customers' credit-worthiness is vital to any business. It determines whether, and under what terms, a company will trade with another. This same principle can be applied to the business of freelance translation.

Payment terms

Upfront payment and milestones

Aside of the risk reduction practices mentioned above, the freelancer can propose upfront payment in cases where there is no or insufficient information about the outsourcer available. Upfront payments can be total prepayments (for smaller orders), part advanced payments or they can be the first of a set of milestones for larger projects. Upfront payments are a fairly common risk minimization practise in the freelancing market, they make sense in cases when the freelancer can provide proofs of his/her expertise (like samples, certifications and a profile with feedbacks from clients), while the available information about the client is insufficient (like a profile without BB entries or no profile) or even alarming (low BB record).

Further reading

Discussion related to this article

Please note that ProZ.com forum rules apply to this area.


Pages in topic:   [1 2 3] >
Risk management for translators and interpreters

Tomás Cano Binder, CT Identity Verified
Spain
Local time: 13:17
Member (2005)
English to Spanish
+ ...
Nov 3, 2010



[Edited at 2010-11-03 14:15 GMT]


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Sara Freitas
France
Local time: 13:17
French to English
Risk management process for translation in FranceNov 12, 2010

See this article for risk-management information specific to France (in French):

http://www.sfmtraduction.com/marmite/?p=206


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Jared Tabor
Local time: 09:17
SITE STAFF
Thanks SaraNov 15, 2010

Thanks Sara for the link. I've added it to the article. Any additional information can be added to the article by clicking on the "edit" tab at the top of the page.

Best regards,

Jared


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John Rawlins Identity Verified
Spain
Local time: 13:17
Spanish to English
+ ...
A suggestion Nov 16, 2010

This is nice and comprehensive. However, I think it is worth mentioning that if a translator cannot positively establish enough reasons to trust a new client, then he or she can always ask for full or part payment in advance. In my experience, serious clients are very likely to accept this proposal from a new supplier (in Spain, at least).

BTW. Google Maps is not infallible. It shows an awful structure as being my house, and I have been trying for months to get them to delete the photo.


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Risk management for translators and interpretersNov 16, 2010

an example
Euler Hermes Group FAQ
http://www.eulerhermes.it/it/faqs-glossario/faqs-glossario.html#3
Is there a minimum insurable turnover?
Euler Hermes SIAC generally does not manage companies with a turnover of less than 500,000 Euro ...

I wish I was able to have this turnover !
icon_wink.gif

rather, do a look here
http://proz.uservoice.com/forums/37172-general/suggestions/1226615-proz-credit-insurance-on-line-tool

and vote, if it sounds interesting, or propose fixing a more precise target

Claudio


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George Amolochitis Identity Verified
Greece
Local time: 14:17
Member (2005)
English to Greek
+ ...
George Amolochitis' Comment on Risk Management Nov 29, 2010

I totally agree! Points 1-6 regarding qualification of a new outsourcer have to be observed carefully before any new order will be accepted. Scammers should be isolated and their data should be known in the Free Lance Translators world in order to be put out of business!

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Roland Nienerza Identity Verified

Local time: 13:17
English to German
+ ...
Delay of payment is not mentionedNov 29, 2010

In the recommendations for things to check before contracting for a job offer there is no mention of inquiring about the proposed delay of payment.

It is interesting that this has been forgotten here - as this is to my observation being regularly "forgotten" in about 70% or more of new job offers I get and not mentioned in around the same proportion of Purchase orders.

BTW - I have tried to insert this as Edit in the above Wiki article - by inserting another numbered paragraph 6. and changing the previous number 8. to 7.

The editing seemed to work quite well - as in the general Wikipedia. But I had forgotten to set the subject of the paragraph bold. But it did not get the possibility to adjust my editing - as in the general Wikipedia - but was told that my session was terminated and that I had to log out of ProZ.com and to log in again at ProZ.com - which I had really to do.

But now my editing is no longer visible even for me - and I wonder whether it has been lost completely or will show up after vetting.

Roland Nienerza


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Tomás Cano Binder, CT Identity Verified
Spain
Local time: 13:17
Member (2005)
English to Spanish
+ ...
Delay of payment is not mentioned - IntentionallyNov 29, 2010

Roland Nienerza wrote:
In the recommendations for things to check before contracting for a job offer there is no mention of inquiring about the proposed delay of payment.

I am not sure how the customer's proposal about payment term has an influence in the qualitication of a new customer. To me, the proposed term is something you accept or reject, the same you would accept or reject the choice of CAT, format of the files, or any other conditions of the cooperation.

I don't see a need to add it to this particular page. Can you explain why you think it would be important?


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Laurent KRAULAND Identity Verified
France
Local time: 13:17
French to German
+ ...
European guidelineNov 29, 2010

While I can see you point, Tomás, I think that linking to the EU guideline on payment terms could not do any harm.

Personally, I have stopped working for clients whose payment terms exceed 30 days EOM. And when potential clients contact me, this is one of the first elements I mention, along with the fact that my services are provided under the GT&C of the Société française des traducteurs (SFT).

I find it very useful to sort wheat from chaff.


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Tomás Cano Binder, CT Identity Verified
Spain
Local time: 13:17
Member (2005)
English to Spanish
+ ...
OK, then add it! :-)Nov 29, 2010

Laurent KRAULAND wrote:
While I can see you point, Tomás, I think that linking to the EU guideline on payment terms could not do any harm.

Yes, I agree that preferring 30 days is very legitimate indeed. However, a bad customer can say yes to a payment in 30 days (or in 21 days, or in 3 days, for that matter) and then ignore it completely. I think that the page as it stands now serves the main purpose: making sure a customer is legitimate and establishing the job at hand.

About the payment terms, I would add it as a separate section in the same page, with a reference to the EU guideline and the recommended conditions of Associations if you have them.


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Laurent KRAULAND Identity Verified
France
Local time: 13:17
French to German
+ ...
DoneNov 29, 2010

Tomás Cano Binder, CT wrote:
About the payment terms, I would add it as a separate section in the same page, with a reference to the EU guideline and the recommended conditions of Associations if you have them.


Done - as I had the time to do iticon_smile.gif


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apk12 Identity Verified
Germany
Local time: 13:17
English to German
+ ...
Upfont and milestone paymentNov 30, 2010

Hi Laurent, congrats - edit: and Tomas, of course - nice work so far. But I am missing one of the most basic risk management strategies, could you please add it?
Upfront payment and - for larger projects - milestone payment solutions. E.g. upfront of a percentage upon start, payment for a next milestone upon delivery of a part of the translation like at a 50% progress stage and paying the rest upon delivery of the last files. You know, agency terms are simply not the rule of the world, there are also normal direct clients out there... :]

(see also e.g. http://wiki.proz.com/wiki/index.php/Determining_your_rates_and_fees_as_a_translator#Payment_terms )




[Edited at 2010-11-30 09:34 GMT]


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Laurent KRAULAND Identity Verified
France
Local time: 13:17
French to German
+ ...
À tout seigneur, tout honneur...Nov 30, 2010

Just to clarify: Tomás' input accounts for nearly 100% of the article, I did only link to the 2000/35/EC directive and to the recommended GT&C of the SFT.

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Tomás Cano Binder, CT Identity Verified
Spain
Local time: 13:17
Member (2005)
English to Spanish
+ ...
Thanks!Nov 30, 2010

Laurent KRAULAND wrote:
Just to clarify: Tomás' input accounts for nearly 100% of the article, I did only link to the 2000/35/EC directive and to the recommended GT&C of the SFT.

This honours you Laurent, but was completely unnecessary!icon_smile.gif


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apk12 Identity Verified
Germany
Local time: 13:17
English to German
+ ...
'Xcuse me...Nov 30, 2010

Hello Tomas, congrats to you for the nearly 100% of the article... no idea where I found Laurent as the author name, sry for the misunderstanding.

But back to my former question - any chances for a complement re. upfront and milestones? I can add a paragraph, but wouldn't do it in this case before talking about it first.




[Edited at 2010-11-30 09:34 GMT]


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