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tranfree issue 42 - 6 November 2001
Is the World Situation Affecting Payment?by Alex Eames
A lot of large multinational companies are cutting jobs. Probably
more than they 'need' to as a result of the world situation. (An
ideal, but questionable, opportunity to get rid of the fat). Does
this present an opportunity or a threat to us as freelancers?
Probably a bit of both. Less full-time staff, means more
outsourcing. But is money getting tighter for some of our clients? And what can we do about it if it is? From monitoring lists where people talk about clients, I've noticed that, in the last year or so, several well known agencies have bought smaller agencies and become slow payers as a result of their ambition. Using suppliers to bankroll expansion is not a new idea, but it is a despicable and dishonest habit. It's quite common, but I think we all know deep down that it is wrong...
hold back the wages of a hired man overnight." Leviticus 19:13
This was happening before the events of September 11.
Getting PaidGetting paid can be rather like the situation where a nesting bird is feeding its chicks...
It's the same with getting paid. The earlier and more frequently you chase, the sooner you will get paid... ...to an extent! But you do have to consider whether or not you want to work for the client again before you launch an all-out assault on their communications channels - pester people a lot and they will be less likely to come to you again. It's up to you to find your own personal balance between accepting lateness of payment and losing clients. IntolerantThere are people out there who will not tolerate even a couple of days lateness - characterised by...
...that's OK. Whatever works for them. I take a less extreme position. Since nearly all clients do pay within a couple of months, I won't usually chase within that time period. Why waste...
Are You Under-Capitalised?One of the classic arguments used by the "bleaters" is that if a client waits to receive payment before paying their suppliers, they are under-capitalised. OK - that's perfectly true. The agency's relationship with the client should not affect their relationship with the translator. Their contract with you is completely separate from their contract with their client. It's common for small agencies, or freelancers 'sharing a large project' to try to link the two together and share risk. In fact, when we didn't know any better, we used to do this ourselves (when we first started sub-contracting). But we don't any more - since it was pointed out to us that it is not right! But cast that judgemental eye over yourself. If the agency is under-capitalised, what about you? Are you worried that if the agency's client defaults, they may not (be able to) pay you? (According to our recent survey, only about 30% of translators are not particularly worried about this). You too are also in business. If one of your clients doesn't pay, what will your situation be? Will you have to stop trading and take a job somewhere else? Will you have to borrow money to live on? If so, you are under-capitalised too? OUCH! ReservesThink about it. You too ought to have reserves in case something dreadful happens. Do you? I recommend you try to build up a reserve fund sufficient to cover at least 3 months of living expenses - preferably more!
I got this email from Mike Taylor, which prompted this article.
Thanks Mike
While you're working on the next edition of Tranfree, it may be worth putting a small warning in about payment. We've just had a client who has just written to us informing that due to Sept 11th and a downturn in trade, they can only afford to pay us £100.00 per month for outstanding invoices!! This could be particularly applicable for translators taking on sizeable projects directly from clients i.e: Ensure that payment terms are clear from the outset and get an 'Acceptance Note' or 'Order Confirmation' signed that has your Terms of Business clearly displayed. I'm sure that we all have sympathy for the industries that are suffering, but we all have to make sure that the cash flow doesn't suffer and if other companies adopt this method of payment, everybody suffers!
Kind regards
I agree with Mike, it's even more important than usual to exercise caution with the paperwork - particularly with new clients. We've got a large client, who for the moment will remain anonymous. They seem to be having administrative problems. If they're not having administrative problems, then they're stalling, which is even worse. They are sending us purchase orders several weeks after completion of the job. This is obviously no good, because their accounts department "needs" a purchase order number in order to pay our invoices. In my eBook... How to Earn $80,000+ per Year as a Freelance Translator ...I advise people not to start a job without getting a written order confirmation. We won't be accepting any more jobs from this client without proper paperwork in advance. The reason we let them get away with this slackness on a couple of jobs is that they are an established and trusted client. But even large, old, well established, trusted clients can get into financial trouble. So we won't be allowing this slackness to continue. (And the only way we can stop it is to refuse to work without the PO). Excuses ExcusesBy the way, the excuse the Project Managers give us is that they have to get the purchase orders 'signed off'. Well what takes longer...
Poor excuse or poor procedure! And in any event, the purchase orders they send us are in the form of an Excel spreadsheet, which bears no signature. Smells rather like BS to me.
If the Project Manager does not have authority to commit the
company to paying for a translation, they don't really have the
authority they need to commission a translation do they?
Alex Eames is the founder of translatortips.com, |
...the loudest squawker gets fed first.
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my precious time?
