Should the client determine due date?

Charlie Bavington wrote:



Sorry, we are comparing slightly different things.

The point is not (in my view) how much your customer is "saving" by "borrowing" money from you rather than a bank. The point is how much YOU are losing by not being paid immediately. And that loss, in simple terms, is the interest you would have earned in the period that the customer had your money, not you.

And at the moment, interest rates on deposits are generally so low that an invoice would need to be worth tens of thousands of euros before I decided that it was financially worthwhile arguing about 30 days interest, rather than just sitting at my desk and earn money from translating itself.

Susan Welsh wrote:
Oooof, you scare me by putting all your bank data on a public site on the internet! As I understand it, some nasty person could use it to hack into your account.

Pablo Bouvier wrote:
The interest of a deposit is not the interest of late payments. The interest of late payment is the overdraft interest and, therefore, it is significantly higher.

Pablo Bouvier wrote:
I do not want to earn money from anything else as from the translation services I give, but I neither want to give credit as I am not a financial entity.

Considering my elder son's present age, this took place almost three decades ago, when some things were different. As a newborn, he was allergic to all disposable diapers, so we had to use the old-fashioned cloth ones... and wash them. Adding these to all the family laundry, our washing machine was doing three loads per day, 7 days a week.

One Saturday, I got home at noon, and was welcomed by my wife holding a broken washing machine drive belt in her hand. I grabbed it and quickly drove to the proper service & parts store. They had just shut down for the week. So a bright idea struck me, and I drove to an auto parts store. I gave the V-belt to the clerk, and told him, "I don't know what car it fits, but I need an identical one." He went inside, it took a while, and then he returned, some fresh dirt on his shirt from rummaging old junk, with an identical V-belt, saying it was for a Dodge Charger model so-and-so, with air conditioning.

Though I have a degree in mechanical engineering, and was a good Saturday car mechanic, it took me almost 5 hours' work to get that belt installed and tightened so it would work. Anyway, it only lasted until the next Monday, which was all I needed.

I called a serviceman, and he did it in less than 10 minutes. Furthermore, the belt he installed lasted for a few years. He told me my mistake was in trying to mount it from underneath; it's possible, but it's much. much easier if done from the top, by first removing some thingamajig, a possibility that never crossed my mind.

Above all, he was a trained professional.

José Henrique Lamensdorf wrote:

All this is to say that banks are professionals in lending money. They can do it for 2% per month, just like the skilled serviceman managed to replace a belt in 10 minutes. As a professional translator, I can replace a washing machine V-belt in 5 hours. If we use that same ratio, as an amateur in the trade, I should lend money at... 300 min/10 min * 2% = 60% per month!

Now come on, would any translation client accept that?

Krzysztof Kajetanowicz wrote:
I'm sure your competitors absolutely love the way you don't understand the difference between labour and capital.

Pablo Bouvier wrote:

The interest of a deposit is not the interest of late payments. The interest of late payment is the overdraft interest and, therefore, it is significantly higher.

Charlie Bavington wrote:



This thread isn't about late payments. It is about who sets the payment terms and (once we manage not to wander off into utterly irrelevant tangents about bananas and supermarkets) more generally about who has the power to determine the T&C of any given commercial agreement. The discussion was about the difference between agreeing (or accepting, or possibly feeling obliged to accept) 60 (or more) days versus the EU recommendation of 30 days.
Under those circumstances - agreed terms & who sets them - spending time negotiating 30 days is only economically viable for huge amounts (at the moment)

But I do see your point, there can be a temptation for a client to delay payment, thereby securing "cheap (free?) credit" - hence the penalty interest many countries now allow to be added. But what one is allowed to do for LATE payments is a matter of national (or supranational) policy to keep cash flowing round the system. It is not intended to accurately reflect any losses incurred by the creditor in not being able to deposit the money had payment been as agreed; it is a deterrent to debtors not to abuse the commercial credit system.

Charlie Bavington wrote:

But I do see your point, there can be a temptation for a client to delay payment, thereby securing "cheap (free?) credit"