| Pages in topic: [1 2] > | Agency artificially extending payment terms - what can I do? Thread poster: Laura Kingdon
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Laura Kingdon 
United Kingdom
Local time: 15:59
Member (2015)
French to English
+ ...
I'm having some issues with an agency I've had a good working relationship with for quite a while and was hoping to get some advice from the community on how best to handle this situation.
In short, there have been more and more issues with payment over the last couple of years. They pay in full and (until now) more or less on time, but they have become more inclined to nag about smaller invoices ("can't we wait and add this to next month's invoice?") and insist on only monthly invo... See more I'm having some issues with an agency I've had a good working relationship with for quite a while and was hoping to get some advice from the community on how best to handle this situation.
In short, there have been more and more issues with payment over the last couple of years. They pay in full and (until now) more or less on time, but they have become more inclined to nag about smaller invoices ("can't we wait and add this to next month's invoice?") and insist on only monthly invoices (although I hate invoicing and this makes my life simpler as well, so it doesn't bother me too much other than the fact that they do insist on it and invoicing should be at my discretion).
The latest issue, however, is not something I can accept. I submitted an invoice to them as usual a couple of days into February and noticed recently that they list it as scheduled to be paid in mid-April. I asked what happened to their standard 45-day payment terms and was told that it's 45 days after the invoice is approved, which somehow took two weeks, and then only at the next payment run, which is in mid-April. In other words, a 45-day payment term has now become essentially 75 days. I wonder what the 45 days is actually for if not to cover these periods of approval in the first place - do they really need to hang onto my money for 45 days when they're not doing anything with the invoice?
Complicating matters, I can't find a copy of the most recent contract I have with them, so I can't check the exact wording of it to tell them whether or not they are in violation. I suspect that they are as I never would have agreed to this situation if I had known about it in advance and I do read contracts before signing.
I would like to keep working with this company as I have always enjoyed our collaboration, but 2.5 months to get paid (and that for jobs that could have been done almost a month before I even submitted the invoice) is just too long. I'm not their banker giving them a loan. I can't see any good reason they need to wait all this time. Now, before I write back to them with the very angry email covered by a thin veneer of diplomacy that I'm already composing in my mind, does anyone have any advice on how to handle this situation so I can get my money on time? ▲ Collapse
| | | | Samuel Murray
Netherlands
Local time: 16:59
Member (2006)
English to Afrikaans
+ ...
Laura Kingdon wrote:
In other words, a 45-day payment term has now become essentially 75 days.
We welcome as the newest member of the 3-month club. I can't offer any useful advice, sorry.
| | | | Tom in London
United Kingdom
Local time: 15:59
Member (2008)
Italian to English
| My suggestions | Mar 4, 2020 |
I can't help with this invoice but for the future I would suggest:
1. Always invoice before the end of the month. Clients usually start counting the payment terms from the beginning of the month, so if you miss the end of the previous month you may need to wait for a full extra month before you get paid.
2. On each invoice, always clearly specify your own payment terms immediately below the amount payable. This could be something like
"PAYMENT TERMS
... See more I can't help with this invoice but for the future I would suggest:
1. Always invoice before the end of the month. Clients usually start counting the payment terms from the beginning of the month, so if you miss the end of the previous month you may need to wait for a full extra month before you get paid.
2. On each invoice, always clearly specify your own payment terms immediately below the amount payable. This could be something like
"PAYMENT TERMS
60 consecutive calendar days from invoice date as per EU Directive 2011/7/EU
[Edited at 2020-03-04 11:34 GMT]"
Here's the Directive:
https://ec.europa.eu/growth/smes/support/late-payment_en
Whether or not that particular country enforces the Directive, I think it always helps to mention it !
[Edited at 2020-03-04 11:37 GMT] ▲ Collapse
| | | | Thayenga
Germany
Local time: 16:59
Member (2009)
English to German
+ ...
| Wait till next month | Mar 4, 2020 |
Well, that sure is an offer to consider... provided the agency is willing to wait for the translation until you have completed enough of them in order to reach an invoice that is not too small to be paid.
You are a translator, not a bank. If they insist that you transfer smaller invoices to the next month, you could agree, again provided that they pay the current interest rate.
We are all entrepreneurs, meaning that if we can't afford something, we better not buy it. Su... See more Well, that sure is an offer to consider... provided the agency is willing to wait for the translation until you have completed enough of them in order to reach an invoice that is not too small to be paid.
You are a translator, not a bank. If they insist that you transfer smaller invoices to the next month, you could agree, again provided that they pay the current interest rate.
We are all entrepreneurs, meaning that if we can't afford something, we better not buy it. Surely the agency charges its customers immediately for any services. Maybe you could let them know your point of view by simply stating that you can't afford to accept postponed payments because neither your landlord nor you power provider are willing to wait...till next month to receive their money.
[Edited at 2020-03-04 12:41 GMT] ▲ Collapse
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Dan Lucas
United Kingdom
Local time: 15:59
Member (2014)
Japanese to English
| Not sure you can | Mar 4, 2020 |
Laura Kingdon wrote:
I can't see any good reason they need to wait all this time. Now, before I write back to them with the very angry email covered by a thin veneer of diplomacy that I'm already composing in my mind, does anyone have any advice on how to handle this situation so I can get my money on time?
Write the angry email. Get it all out of your system. Read it back to yourself. Savour it. Now delete it. Write another email, concise, polite and emotionless - something like this:
"Dear ABC, Although we have had a mutually beneficial collaboration over XX years, unfortunately I am no longer able to work with XXX Company as the time taken to pay perfectly valid invoices is no longer acceptable. My terms are 45 days from the end of the month, and they must be adhered to. I will therefore not taking on any more projects from XXX Company. I wish you the best of luck", etc. etc.
They will either say "See ya", or apologise profusely and ask for another chance. That is their last chance, should you choose to give them one. You do a small project, invoice them, tell them the exact date on which they will pay, and then wait for them to disappoint you. Then you terminate relations with them.
Personally I am not that worried about long payment terms, because I usually have more than enough work to cover those who pay later, and I trust my clients. However, I don't like clients who try to push the boundaries. The contract is neither here nor there; if I need to resort to quoting the contract, they're no longer the kind of client I want to deal with.
I'd also be concerned about bankruptcy, because the slippage you have observed could be a symptom of a deteriorating financial position. If a company starts running short of cash, one obvious measure to combat this is to delay payments to suppliers while encouraging clients to pay more quickly. Can you run a credit check on them, if they are a Canadian company?
Regards,
Dan
| | | | Laura Kingdon
United Kingdom
Local time: 15:59
Member (2015)
French to English
+ ...
TOPIC STARTER
Thanks, Tom and Dan, for the helpful advice.
Tom, I'll be sure to implement your suggestions in the future. I do put my own payment terms matching their payment terms of 45 days at the bottom of my invoices, but I will reword that part so it more clearly indicates a maximum of 45 days with no room for creative interpretation.
Dan, I agree that their increasingly worrying payment issues could imply that they're having financial issues of their own. The thought had occur... See more Thanks, Tom and Dan, for the helpful advice.
Tom, I'll be sure to implement your suggestions in the future. I do put my own payment terms matching their payment terms of 45 days at the bottom of my invoices, but I will reword that part so it more clearly indicates a maximum of 45 days with no room for creative interpretation.
Dan, I agree that their increasingly worrying payment issues could imply that they're having financial issues of their own. The thought had occurred to me as well. Unfortunately, I don't think I can check their credit as they're not Canadian.
I am also not one to worry too much about payment terms, but I put a hard limit at 60 days since I can't imagine why anyone would need more than that; really, I don't think they need more than 30, but enough companies want 45 days and are otherwise good clients that I'm not willing to exclude them on that basis alone. ▲ Collapse
| | | | Sheila Wilson
Spain
Local time: 15:59
Member (2007)
English
+ ...
| Thanks, Dan - you saved me some typing :) | Mar 4, 2020 |
Dan Lucas wrote: Laura Kingdon wrote:
I can't see any good reason they need to wait all this time. Now, before I write back to them with the very angry email covered by a thin veneer of diplomacy that I'm already composing in my mind, does anyone have any advice on how to handle this situation so I can get my money on time? Write the angry email. Get it all out of your system. Read it back to yourself. Savour it. Now delete it. Write another email, concise, polite and emotionless
I have nothing to add to that. In the end, you're probably going to have to accept it or stop working with them. The "free" in freelance only means we're free to back away if we don't like what our clients do, rather than free to dictate terms our clients don't like.
| | | | Lingua 5B
Bosnia and Herzegovina
Local time: 16:59
Member (2009)
English to Croatian
+ ...
| Fairly common. | Mar 4, 2020 |
I assume this is a European agency with typical European payment terms. It's very common that once you accept 45 day terms it will turn into 60 day and eventually 120 days. Some translators prevent it by only working with agencies that have 30 day NET as maximum or, if these translators accept 45 days, they are aware of risk that this would extend at some point or that these agencies tend to be late with payment (despite the already long payment terms). They can tell you whatever they want 1) th... See more I assume this is a European agency with typical European payment terms. It's very common that once you accept 45 day terms it will turn into 60 day and eventually 120 days. Some translators prevent it by only working with agencies that have 30 day NET as maximum or, if these translators accept 45 days, they are aware of risk that this would extend at some point or that these agencies tend to be late with payment (despite the already long payment terms). They can tell you whatever they want 1) they have financial issues, 2) client is late with payment, 3) bureaucracy in Europe is slow, etc. You have no means or time to check validity of these statements.
[Edited at 2020-03-04 12:49 GMT] ▲ Collapse
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| It doesn't only happen to others | Mar 4, 2020 |
Dan Lucas wrote:
...I'd also be concerned about bankruptcy, because the slippage you have observed could be a symptom of a deteriorating financial position. ...
I used to work with this French boutique agency whose payment terms were 60 days "end-of-month". But there was also a lot of work, proper rates and excellent support.
Then they started to pay late on top of that, apologising profusely each time. One day, I received a cheque from the post, which wasn't their usual payment method, for part of the outstanding amount. I cashed it, but in the meantime...
They had gone bankrupt. I flew to France (from Morocco at the time), found the accountant at their offices, made a racket at their bank, got the address of the liquidator to make myself known as a creditor, and after 5 years, learned that I had lost my outstanding 3700 euros for ever.
It was shortly after 9/11. The cheque bounced back, of course.
The longer the payment terms, the more money lost in case of bankruptcy.
Obviously, I no longer accept 60 days "end-of-month"…
Philippe
Edit: horrible typos
[Edited at 2020-03-04 17:18 GMT]
| | | | | Poke them where it hurts | Mar 4, 2020 |
My kneejerk reaction would be to say stop working with them, because anything past "end of following month" is inexcusably excessive to me, but I understand wanting to keep a client despite one or a few issues.
If they won’t sort their payment process out, you’ll have to use the money lever on them. I would suggest a conditional "late payment" fee, but that adds more tracking and hassle to the ordeal and they might say it’s impossible to handle because of the system they use. ... See more My kneejerk reaction would be to say stop working with them, because anything past "end of following month" is inexcusably excessive to me, but I understand wanting to keep a client despite one or a few issues.
If they won’t sort their payment process out, you’ll have to use the money lever on them. I would suggest a conditional "late payment" fee, but that adds more tracking and hassle to the ordeal and they might say it’s impossible to handle because of the system they use. So just raise your rates and make it clear that it is due to their payment policy, that you are raising them specifically for their company and that you would be happy to lower them again if they sort themselves out.
It might not solve the lateness issue per se, but at least you’re earning more at the end of the day so you can sort of tell yourself that it’s a short-term investment with moderate risk 
You still run the risk of them terminating your relationship of course, so consider the pros and cons. At least this approach is not a close-minded departure on your end, but a negotiation.
Another, similar lever you can use is priority. Make it clear to them that as long as they keep using you as a lender, you will only accept their projects if you have nothing better to do. If you already have a long-standing relation with them, they probably have clients that they prefer to hand to you exclusively and deadlines that they don’t want to miss. ▲ Collapse
| | | | Katrin Braams
Germany
Local time: 16:59
Member (2018)
English to German
+ ...
Their way of extending the payment period smells like they have a cash flow problem. Sooner or later there will be no payment at all. Run....
| | | | Michael Newton
United States
Local time: 10:59
Japanese to English
+ ...
| Payment terms | Mar 4, 2020 |
Dan's advice is spot on and his letter should be the template for all such agencies.
Dump them!
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| Lines in the sand and safety nets | Mar 5, 2020 |
Many years ago, I had a similar issue with a company that adopted a policy of deliberately waiting for a certain period (which became longer and longer) before they even acknowledged receipt of an invoice. The payment term was counted from the date of their acknowledgement, not the date when I submitted the invoice.
Officially, they claimed to have a payment term of "15-30" days (30 in reality) to begin with. This later became "30-45 days" (again, the 30 wasn't true at all, I believ... See more Many years ago, I had a similar issue with a company that adopted a policy of deliberately waiting for a certain period (which became longer and longer) before they even acknowledged receipt of an invoice. The payment term was counted from the date of their acknowledgement, not the date when I submitted the invoice.
Officially, they claimed to have a payment term of "15-30" days (30 in reality) to begin with. This later became "30-45 days" (again, the 30 wasn't true at all, I believe it was just there to make the 45 seem less unpalatable!)
Over time, they employed various strategies to keep delaying payments while still claiming to have a payment term that was much shorter than the actual one. They eventually sent a mass email telling all their translators that they were going to lengthen the payment term further to the point where I was only going to be paid - in reality - about 3-4 months after invoicing. At that point, I said I would not work for them any more on that basis. Their response, interestingly, was "okay, we'll stick to the current term for you" but I still ended the relationship as I had had enough of them and also their increasingly frequent (and cheeky) requests for freebie translations.
As it turned out, they weren't doing this because they were on the verge of bankruptcy, in fact they're still trading 12 years on (and have a stellar Blue Board record, of course...), but after seeing similar behaviour from other agencies, my conclusion is that quite a few companies will persist in "trying it on" to see how far translators are willing to be manoeuvred, and the more pliable ones will be kept on, while the less biddable ones will tend to be dropped, depending on how expendable and replaceable they are. You might, or might not, find that the agency you mention will try to take further liberties in future, so it becomes a question of where you want to draw the line.
My approach would be to cultivate other, better clients by prioritising them over this other agency and accepting work from other sources whenever possible. You could do this gradually over a period of weeks or even months, progressively reducing the amount of your revenue that this agency accounts for. That would give you a bit more peace of mind in the short term until you tell them "this has to stop", so that if they do drop you as a result, you'll be protected by the fact that you have plenty of other work coming in from elsewhere. ▲ Collapse
| | | | Dan Lucas
United Kingdom
Local time: 15:59
Member (2014)
Japanese to English
| Not at all unusual | Mar 6, 2020 |
Peter Shortall wrote:
after seeing similar behaviour from other agencies, my conclusion is that quite a few companies will persist in "trying it on"
Excellent comment, and your conclusion is entirely correct. This is normal behaviour at many companies, in nearly all industries. A long time ago I was involved in the audit of a small manufacturing company located some way to the south of London. I remember how proud (justifiably, I suppose) the finance director was about the way he had stretched out payables while working away to reduce the term for receivables. If you're paying your suppliers at 60 days, but your customers are paying you at 20 days, you have a useful cash cushion to deposit in the bank to protect you.
This approach depends on suppliers allowing themselves to be manipulated and pressured. Some of you may be thinking that it sounds just like what freelance translators have to put up with, as described by Peter above.
Yes, yes it is. These practices are not unique, or even unusual. What many think of as problems peculiar to the translation business - pressure on rates, deadlines, quality checks, etc. - are issues seen in most if not all industries. They surprise some people only because many freelancers, particular those from an academic background, seem to have very little knowledge or experience of the rough-and-tumble of business.
Conclusion: be aware of the value of what you sell and learn to say "No" when the client tries to push it too far.
Regards,
Dan
| | | | | Being irreplaceable | Mar 6, 2020 |
Dan Lucas wrote:
Yes, yes it is. These practices are not unique, or even unusual. What many think of as problems peculiar to the translation business - pressure on rates, deadlines, quality checks, etc. - are issues seen in most if not all industries. They surprise some people only because many freelancers, particular those from an academic background, seem to have very little knowledge or experience of the rough-and-tumble of business.
Yes, I agree this is the way things work in many industries, and really any industry where there is room in the supply chain for a middleman - like a translation agency in our case, or in other cases where anything is ordered or booked online, it could be a "portal" or website that acts as an intermediary between whoever is buying and whoever is selling. And if the middleman becomes aggressive and greedy, it turns into a tug of war on the supply side of the market, with each team - translators and agencies - wanting to pull the rope closer to its area.
In these industries, being a middleman puts you in control of the supply of money and work to those who are selling the product and need to make a living from it. Your position further up the supply chain gives you control and bargaining power, because you get to decide who makes a living from all the orders that come your way, and who doesn't. You get to set your own terms, and the fact that the money always comes through you means that those who don't accept your financial practices can only look for another middleman or direct clients, there is nowhere else for them to go. And this industry is so saturated with agencies that direct clients are an increasingly rare species. When many or most agencies behave in a way that benefits them more at our expense, we are cornered.
In a situation like this, where agencies try to take something more for themselves - be it more money or a longer payment term - the group that stays most united (agencies or translators) will have the upper hand. If translators all refuse to give any ground, they can succeed in rebuffing the request, but if that doesn't happen, agencies will gain. And the more of them that gain, the more bargaining power and control they will have as they grow richer. They can use the extra money for marketing to capture new clients and more market share. Those who follow trends in the industry will notice that the bigger companies often buy up one smaller agency after the other, and will of course introduce their practices and terms within the smaller ones they acquire. This concentration of control puts us in an even weaker position, as we gradually run out of options in terms of who we work for and on what terms.
I don't mean to demonise all agencies here. I can think of plenty of good ones that are run responsibly by nice, conscientious people who treat everyone they deal with respectfully, so agencies per se are not a bad thing at all. It's just that unfortunately, the nice ones tend (and I underline "tend") to be small or smallish and don't have that much market share, so you need to find quite a few of them to make a living from working for them. The problem I have is not with them, it's with aggressive and greedy agencies that tend to squeeze professionals out of the market with their practices. Ultimately, end clients suffer from this as well when the best translators leave the market, and the agencies gain while everyone else loses out. In this way, greed is destructive and not conducive to a sustainable profession.
To get back to Laura's original question of "what can I do?" in this situation, I believe that the strongest weapon in our arsenal is to try to be as irreplaceable as possible from an agency's point of view, because the "translation products" that agencies sell and translators supply are not all identical, and we can use that to our advantage. If you are offering a language or specialism that few or no other translator(s) offer(s), and/or a quality level that other translators cannot match, then those agencies that care about the range and quality of what they sell will value you more. That gives you a certain amount of power to say no when agencies try to make their terms less favourable to you, as the chances that they will drop you are lower.
Laura, I see that you work in FR-EN and KO-EN. FR-EN is of course very much a mainstream pair, and from an agency's point of view, it's not difficult to replace a FR-EN translator who won't give in when asked to accept more unfavourable terms. But KO-EN is a different matter. You don't say which language(s) you translate for this agency, but if you do a substantial amount of KO-EN work for them, then your bargaining power will be greater as native EN-speaking translators in this pair are far rarer.
In my case, these days, I get an increasing number of agencies asking me whether I do PEMT (or MTPE, or whichever version of the abbreviation happens to be flavour of the month). For ROM-EN, which is my main "niche pair", I tend to find that when I say "no, but I translate from scratch...", the agencies immediately back down and ask what my rate for that is. Clearly, it's difficult for them to find anyone else in situations where the product I sell is needed. But for FR-EN, I would have far lower expectations of hearing back from them after I say "no" as there are hundreds if not thousands of other suppliers for them to turn to.
So one thing to be aware of in these situations is how replaceable you are. Irreplaceability and having a broad client base give you more power in situations where an agency asks you to accept less favourable terms, so when you have that power and can afford to use it, don't be afraid to do so! You'll be doing yourself, and ultimately your fellow translators, a favour.
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