| Pages in topic: [1 2 3] > | Agency changes payment terms (30->60 days) Thread poster: Niels Stephan
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Niels Stephan 
Germany
Local time: 07:59
Member (2009)
English to German
One month ago I got an email from one of my agency clients talking about a new quality assurance program, cleverly including the announcement of a change of payment terms from so far 30 to now 60 days to "align with our client payment terms and business standards".
I expected an outrage here in the forum as I believe this to be one of the pet topics of the community and I am pretty sure that some of you must work for this agen... See more One month ago I got an email from one of my agency clients talking about a new quality assurance program, cleverly including the announcement of a change of payment terms from so far 30 to now 60 days to "align with our client payment terms and business standards".
I expected an outrage here in the forum as I believe this to be one of the pet topics of the community and I am pretty sure that some of you must work for this agency, as they are fairly large and have more than a hundred entries on the Blue Board, but so far I didn't see anything. Their friendly reminders suggested though that I am not the only one who didn't like the change.
For me this was the second agency trying this so far this year and I guess if it works out for them that more might be following and it could indeed become the "business standard".
If you work with this client, did you bite the bullet?
Have you experienced similar things with other clients? ▲ Collapse
| | | | | Agency changes payment terms (30->60 days) | Apr 13, 2010 |
Niels Stephan wrote:
One month ago I got an email from one of my agency clients talking about a new quality assurance program, cleverly including the announcement of a change of payment terms from so far 30 to now 60 days to "align with our client payment terms and business standards".
I expected an outrage here in the forum as I believe this to be one of the pet topics of the community and I am pretty sure that some of you must work for this agency, as they are fairly large and have more than a hundred entries on the Blue Board, but so far I didn't see anything. Their friendly reminders suggested though that I am not the only one who didn't like the change.
For me this was the second agency trying this so far this year and I guess if it works out for them that more might be following and it could indeed become the "business standard".
If you work with this client, did you bite the bullet?
Have you experienced similar things with other clients?
I am not quite sure. But, so far I can remember in the EC a paying delay behind 30 days is not allowed, if both parts do not agree. If you search at the forums, you will find that this has discussed before, but maybe under another topic.
| | | | Niels Stephan
Germany
Local time: 07:59
Member (2009)
English to German
TOPIC STARTER | US-based company | Apr 13, 2010 |
Pablo Bouvier wrote:
But, so far I can remember in the EC a paying delay behind 30 days is not allowed, if both parts do not agree.
I probably should have mentioned that it is an US-based outsourcer.
Besides, they explicitely ask you to agree to it, so it doesn't help much. Sure, you don't have to work with them, but that doesn't help much either.
| | | | | I haven't signed the new agreement yet | Apr 13, 2010 |
Hi Niels,
I complained about the unilateral changes and haven’t signed the new agreement yet. I am still waiting for the agency’s reply to my email.
I appreciate this client and was happy to receive payment after 30 days and always punctual. I am not at all happy with the change to 60 days. I am running a business; I am NOT a bank.
I am not comfortable with signing the following clause: “Invoices must be issued within 45 days of project completion. Any in... See more Hi Niels,
I complained about the unilateral changes and haven’t signed the new agreement yet. I am still waiting for the agency’s reply to my email.
I appreciate this client and was happy to receive payment after 30 days and always punctual. I am not at all happy with the change to 60 days. I am running a business; I am NOT a bank.
I am not comfortable with signing the following clause: “Invoices must be issued within 45 days of project completion. Any invoice not received within the 45 day requirement will not be accepted”. I have asked the agency whether this clause is legal (no reply yet).
I do not agree to having to sign the new NDA/conditions in order to receive the client’s “pricing addendum”. I told the agency that I want to know what this addendum is about BEFORE signing anything (no reply yet).
I wanted to raise my rates last year, but was told that this “wasn’t possible” for this particular client/project. As the client’s conditions have changed, I have asked for a higher rate this year, pointing out the very positive feedback I received from the end client (no reply yet). It seems that the end client only cares about quality if they can apply their detailed list of penalties for poor quality and late delivery (I feel annoyed by such lists as I always follow my own quality assurance procedures and strive to deliver high quality translations). I also feel annoyed that I already invested time to check out how the agency’s new online tool works, but they don’t take the time to reply to my questions and concerns.
I stated that it’s a pity that so many agencies accept worse conditions from their clients and place the translators in a “take it or leave it” position (besides from ruining the market). I hope that there will be room for negotiation. It would be a pity to lose this client, as I appreciate them and like their projects. But I will give preference to clients who pay higher rates and pay earlier. They still exist.
Best,
Andrea ▲ Collapse
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| 60 days payment term | Apr 13, 2010 |
Niels Stephan wrote:
Besides, they explicitely ask you to agree to it, so it doesn't help much. Sure, you don't have to work with them, but that doesn't help much either.
So what's your point?
Either you agree to it, or you don't!
At our agency we adhere to a 30-day payment term towards our freelance translators, but we've had many clients in 2009 that changed their payment terms, which means our agency now has to wait for 60-90 days before getting paid. But we didn't change our payment terms towards the translators.
It's a nuisance, but if you want to continue working for them, you have to accept their terms.
| | | | | How about 60 to 90? | Apr 13, 2010 |
I recently had a company change from 60 to 90, so I guess you can consider yourself lucky!!! (just kidding..)
It's frustrating, I know, but not much you can do; bite the bullet as you say, or stop working for them.
| | | | | Consider the point of view of the company | Apr 13, 2010 |
The company is doing this to save itself. Probably many of its direct clients do pay within 30 days or less, so they could send you the money by that time.
However, a few of their clients (their number could be increasing) are not very punctual, they can take up to 10-20 extra days in paying, and if you consider that the company probably hires many other translators besides you (and has to pay other personnel and services), then they have to take out of their pockets huge amounts ... See more The company is doing this to save itself. Probably many of its direct clients do pay within 30 days or less, so they could send you the money by that time.
However, a few of their clients (their number could be increasing) are not very punctual, they can take up to 10-20 extra days in paying, and if you consider that the company probably hires many other translators besides you (and has to pay other personnel and services), then they have to take out of their pockets huge amounts of money to pay on time due to their previous 30-day-payment policy. This of course, is a problem for the company and its accounting department.
So, unfortunately, due to late payers, the company changed its policy because they cannot guarantee to pay all translators within 30 days 100% of the time. As they say: "One does the harm, and another bears the blame".
Just an example that is happening to me at this very moment: I made an interpretation with a colleague. I told her that the company (the Ministry of Education) would pay us within two days, as I was told by them. More than 2 months later, I am still fighting for our right to be paid. I call almost every day, the bureaucracy is tremendous and nobody knows when the payment will be ready. In this case the Ministry should have told me:" We will pay you in 90 days" to save themselves, and should had never given us false hope.
[Edited at 2010-04-14 03:01 GMT] ▲ Collapse
| | | | pcovs
Denmark
Local time: 07:59
English to Danish
| I can't get a 60-90 days credit at my grocer's | Apr 13, 2010 |
so unfortunately I cannot afford to work for agencies like that.
In some places this technique is being used largely by companies trying to get some liquidity into their business - not because they themselves are being paid later. For the company this could mean that they might be granted that loan or credit that would otherwise not be granted, or they might just get enough interest on this money to make it worth the effort, and that's their reason for (attempting to) make their sup... See more so unfortunately I cannot afford to work for agencies like that.
In some places this technique is being used largely by companies trying to get some liquidity into their business - not because they themselves are being paid later. For the company this could mean that they might be granted that loan or credit that would otherwise not be granted, or they might just get enough interest on this money to make it worth the effort, and that's their reason for (attempting to) make their suppliers go for this extension.
Unfortunately this procedure means that some small entrepreneurs go out of business, because they then suddenly lack the liquidity in their own business to get that loan or credit that they need to stay in business.
This is to a very large extent because of the big players' imposing these extended payment terms with the implied threat that if the small business owner doesn't like it, the big company will just find someone who will.
The result then is that only smaller businesses with some cash stashed away somewhere can actually survive this change.
The small businesses will for a large part go bust, either because they agree to the extended payment terms and must suffer the above mentioned consequences, or they don't agree and then don't get the jobs, and then they must suffer the consequences of that. ▲ Collapse
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Niels Stephan
Germany
Local time: 07:59
Member (2009)
English to German
TOPIC STARTER | I _am_ considering the point of view of the company | Apr 13, 2010 |
Cristina Heraud-van Tol wrote:
The company is doing this to save itself. Probably many of its direct clients do pay within 30 days or less, so they could send you the money by that time.
However, a few of their clients (their number could be increasing) are not very punctual, they can take up to 10-20 extra days in paying, and if you consider that the company probably hires many other translators besides you (and have to pay other personnel and services), then they have to take out of their pockets huge amounts of money to pay on time due to their previous 30-day-payment policy. This of course, is a problem for the company and its accounting department.
1. As far as I understand it this is part of what it means to be an agency. They charge a hefty price for their services, a part of that money needs to be used for such cases. They have a contract with me, so it shouldn't be "We can pay you as soon as the client pays us."
2. Apparently they understood that vendors need to be paid in time, so far. Maybe it is like you wrote above. But that means making somebody else pay for the problem they have with their clients, which should be covered by their contracts in the first place. I don't see at all why I would have to pay for this.
According to that logic I should be able to pay my bill at the supermarket with a 60 day delay as my clients do the same, but as we can read above that is not possible.
| | | | | Stand your ground | Apr 13, 2010 |
The law provides a limit on payment terms on B2B transactions to 30 days. Any agency attempting to negotiate longer time frames is being unreasonable, unless they can prove that their volume is being supplied primarily through government contracts, in which case the law may provide for extended payment. The difference there is that your money is guaranteed through taxpayers, which is a lot more financial security than some random client that may potentially be insolvent.
So, hold th... See more The law provides a limit on payment terms on B2B transactions to 30 days. Any agency attempting to negotiate longer time frames is being unreasonable, unless they can prove that their volume is being supplied primarily through government contracts, in which case the law may provide for extended payment. The difference there is that your money is guaranteed through taxpayers, which is a lot more financial security than some random client that may potentially be insolvent.
So, hold them to 30 days. If they want 60 days... double your rates or force them to double the proposed deadlines so that you can focus more on work supplied by clients who pay you on a more standard schedule like (on delivery, within 8 days, or 30 days net).
If your invoicing volume is high enough, you may be able to factor the invoices, in which case you get your payment within 24 to 72 hours. Usually in this case, you need to have a lot of turnover. Most agencies have enough turnover to be able to factor their invoices for immediate cash flow in order to maintain business capital, so I never understand the reasoning behind payment delays beyond 30 days.
If they are not providing you considerable volume and high enough rates, end the relationship.
Soon enough, they will be pushing it back to 75 days. Then 90 days. Then they'll not be paying you at all, and they will continue to use the same excuse.
[Edited at 2010-04-13 22:52 GMT] ▲ Collapse
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Andrea Brumma wrote:
I am running a business; I am NOT a bank.
This change probably means the agency is undergoing cash flow problems. It's likely that they continue to charge the end-client COD, end-of-month, whatever, and will pay translators in 60 days with the money from the next job. If demand drops or halts, they'll go under.
Many agencies like to borrow interest-free money from translators. So I decided that while I'll strive to be among the best translators in my pairs/specialties, I don't object to being rated as the worst moneylending institution ever. To do it, I made a unilateral agreement with my bank: as long as they don't offer translation services, I'll charge twice their current interest rate for longer payment terms.
I understand that dealng through agencies means that the agency will check my work, and the end-client will want to do so before paying, so two weeks from delivery is enough time for all that. Beyond two weeks, they'll either have my rates increased by hefty interest or, if they are wise, they'll get a loan from a real bank to pay me.
It always puzzles me why do translators lend interest-free money to translation agencies. We don't have a stock of translations to deliver and pay the original supplier some time in the future. All other personal service professionals - plumbers, mechanics, dentists, physicians, electricians, photographers, musicians, etc. - get paid COD. Who invented that translators should be a source of interest-free loans?
| | | | kimjasper
Denmark
Local time: 07:59
Member (2006)
English to Danish
+ ...
| Law seems to vary by geo | Apr 14, 2010 |
Bryan Crumpler wrote:
The law provides a limit on payment terms on B2B transactions to 30 days.
(...)
There may be such legislation in the US. Currently it is being discussed in the European Union but I have not seen any legislation yet. It would be nice though since it would level the playing field for mid size and small agencies and freelance translators.
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Williamson
United Kingdom
Local time: 06:59
Flemish to English
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| The umpteenth time. | Apr 14, 2010 |
I'll post the link to the directe on combatting late payments in commercial transactions for the umpteenth time:
http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc=Directive&an_doc=2000ν_doc=35
(please cut and paste the link into your browser).
Is law... See more I'll post the link to the directe on combatting late payments in commercial transactions for the umpteenth time:
http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc=Directive&an_doc=2000ν_doc=35
(please cut and paste the link into your browser).
Is law everywhere in the E.U., also in Danemark.
Ben, could you post link to the law with regard to payments in B2B in the US. If somebody knows a link in Canada to such law, please post it.
If not paid after 30 days, send a friendly reminder.
If no reaction and not paid after 40 days, send a credit-collection agency.
My experience with companies, who have started with little capital and have grown into middle-sized companies (my caterer: catering for a couple of 1000 of people every day 7/7) or FedEx for that matter (they started with 7 planes and a handful of employees), is that they have short-time credit policy. My caterer applies a 7 days payment policy.
After a fortnight, you get a reminder and after a month, a letter from their laywer.
Fedex: Give it a try to pay after 60 days. You get your invoice after 14 days, a reminder after a month and a letter from a credit-collection agency or lawyer after more than a month.
Both the caterer and the multinational have grown continiuously. You can't do that if your credit-cycle is high.
Would not hesitate to apply the same standard procedure.
Payment after 60-90-136 days is not a healthy policy.
After all, payment-terms of some (utility)-bills are after 14 days.
If an agency can not pay at least one major translation after 30 days, it should not be in business.
[Edited at 2010-04-14 06:23 GMT] ▲ Collapse
| | | | kimjasper
Denmark
Local time: 07:59
Member (2006)
English to Danish
+ ...
| pcovs
Denmark
Local time: 07:59
English to Danish
| It does actually | Apr 14, 2010 |
It does say right here:
'All these matters gave reason for the EU Commission to interfere with Directive 2000/35,
which envisages that purchasers are required to pay their suppliers within a month of the
receipt of the goods. In fact, according to the directive, payments must be made:
- 30 days after the date that the debtor received the invoice, or a similar valid request for
payment.'
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