Seeking advice on managing payments for large projects Thread poster: David Jones
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David Jones 
Taiwan
Local time: 18:13
Member (2020)
Chinese to English
+ ...
Hello folks,
Thoughts and advice would be greatly appreciated.
Previously the projects I've worked on have been much smaller so it made sense to pay at the end of the project as they never took more than a week to complete, however, I'm currently working on a massive project that won't be complete till the end of May but was started at the beginning of April. I thought due to the wording of the contract that the company would pay monthly, however, they're saying that th... See more Hello folks,
Thoughts and advice would be greatly appreciated.
Previously the projects I've worked on have been much smaller so it made sense to pay at the end of the project as they never took more than a week to complete, however, I'm currently working on a massive project that won't be complete till the end of May but was started at the beginning of April. I thought due to the wording of the contract that the company would pay monthly, however, they're saying that they will pay at the end of the project. When I told them I didn't think they were being true to the contract they told me it's standard industry practice to pay at the end of a project. Normally I'd think this quite logical, but if this were my only source of income I'd be in quite a tight spot now... ▲ Collapse
| | | | Tom in London
United Kingdom
Local time: 10:13
Member (2008)
Italian to English
Tell them to put their standard industry practice where the sun doesn't shine.
| | | | Elena Feriani
Italy
Local time: 11:13
Member
French to Italian
+ ...
If you know that client and know that they pay your invoices timely, there's no reason to ask them to pay you before the end of the project. I wouldn't work on a big job like this for a new client, though, because it could be a scam.
When you are a successful full-time freelancer you don't rely on the current month's job to pay the bills, in my experience, because you have clients that pay you with different schedules and there's always some money coming in your bank account.
Anyway,... See more If you know that client and know that they pay your invoices timely, there's no reason to ask them to pay you before the end of the project. I wouldn't work on a big job like this for a new client, though, because it could be a scam.
When you are a successful full-time freelancer you don't rely on the current month's job to pay the bills, in my experience, because you have clients that pay you with different schedules and there's always some money coming in your bank account.
Anyway, I would recommend you not to fully book yourself with one job, so you can accommodate requests for small jobs from other clients as well and have something to invoice at the end of the month. ▲ Collapse
| | | | Baran Keki
Türkiye
Local time: 13:13
Member
English to Turkish
| What does 'at the end of project' mean? | Apr 30, 2021 |
Does it mean when you've delivered the job? As in on the same day or the day after you sent the translation? Are there clients who actually do that? It looks like 60 days is becoming more and more the norm everywhere...
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K. Isaac
Switzerland
Member (2017)
German to English
+ ...
| Be careful with new clients | Apr 30, 2021 |
When working on larger projects for new clients I usually set milestones which the client pays for before proceeding with the work. Some clients have even offered to pay up front. I would definitely not work for more than a week for a new client without being fairly certain that they are trustworthy.
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Baran Keki wrote:
Does it mean when you've delivered the job? As in on the same day or the day after you sent the translation? Are there clients who actually do that? It looks like 60 days is becoming more and more the norm everywhere...
The norm is 30 days after the invoice date and I do have some very dear long-standing customers (translation agencies and direct clients) who have been paying like clockwork the day after receiving my invoice.
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This highlights the importance of making sure you have agreed all the terms you are working under at the start, especially for a big project. And the risk involved in large projects for unknown clients.
What does the contract actually say regarding payment terms?
| | | | | Payment practices for large projects | Apr 30, 2021 |
1) Payment on account, payment of a deposit
I currently have a couple of large projects on the go. In drawing up my quote, among other details, I indicate that the payment on account (deposit) of XXX will confirm the order. I do not start the work until the deposit has been credited to my bank account.
Sometimes, if I have time, I get a head start before the deposit is paid. If the client changes his/her mind, this will be my loss of time as was my decision to organize my wor... See more 1) Payment on account, payment of a deposit
I currently have a couple of large projects on the go. In drawing up my quote, among other details, I indicate that the payment on account (deposit) of XXX will confirm the order. I do not start the work until the deposit has been credited to my bank account.
Sometimes, if I have time, I get a head start before the deposit is paid. If the client changes his/her mind, this will be my loss of time as was my decision to organize my work that way.
I also stipulate what happens if the client cancels after having paid the deposit as well as the terms relating to payment of the balance.
Terms relating to late payment are also stated.
If the job is really long and will cover a number of months, I try to obtain payment in instalments.
2) Payment of the balance, - amount remaining due
When I deliver the translation, I send the invoice for the balance in the same email.
As a rule, I make "payment upon receipt of invoice". I am generally paid within a few days. Thereafter, terms and conditions vary according to the client, the amount and the arrangements we have had over time.
I used to have a number of clients paying 30 or 60 days after the end of the month in which they received the invoice.
This was common practice in France for a long time and some companies still work this way.
I no longer work with clients who have this type of practice. ▲ Collapse
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| European Directive (2011: 2014-) | Apr 30, 2021 |
What follows applies in the EU.
In response to complaints in a number of EU countries that small and medium businesses were going out of business although they had a full schedule of work, new provisions were introduced. Many French businesses plead ignorance but the rules and regulations are clear. In Europe, the default payment terms are 30 days for public authorities and 60 for businesses.
Note that if you carry out a number of jobs for the same client, the maximum ... See more What follows applies in the EU.
In response to complaints in a number of EU countries that small and medium businesses were going out of business although they had a full schedule of work, new provisions were introduced. Many French businesses plead ignorance but the rules and regulations are clear. In Europe, the default payment terms are 30 days for public authorities and 60 for businesses.
Note that if you carry out a number of jobs for the same client, the maximum is 45 days.
https://ec.europa.eu/growth/smes/sme-strategy/late-payment_en
An extract of the main points:
"Main provisions of the directive
- public authorities have to pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days
- enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and provided it is not grossly unfair
automatic entitlement to interest for late payment and €40 minimum as compensation for recovery costs
- statutory interest of at least 8% above the European Central Bank’s reference rate
- EU countries may continue maintaining or bringing into force laws and regulations which are more favourable to the creditor than the provisions of the directive" ▲ Collapse
| | | | Adieu
Ukrainian to English
+ ...
| Is there a summary of how this works? | Apr 30, 2021 |
Nikki Scott-Despaigne wrote:
What follows applies in the EU.
In response to complaints in a number of EU countries that small and medium businesses were going out of business although they had a full schedule of work, new provisions were introduced. Many French businesses plead ignorance but the rules and regulations are clear. In Europe, the default payment terms are 30 days for public authorities and 60 for businesses.
Note that if you carry out a number of jobs for the same client, the maximum is 45 days.
https://ec.europa.eu/growth/smes/sme-strategy/late-payment_en
An extract of the main points:
"Main provisions of the directive
- public authorities have to pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days
- enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and provided it is not grossly unfair
automatic entitlement to interest for late payment and €40 minimum as compensation for recovery costs
- statutory interest of at least 8% above the European Central Bank’s reference rate
- EU countries may continue maintaining or bringing into force laws and regulations which are more favourable to the creditor than the provisions of the directive"
Do both parties have to be EU, or does this cover all EU debtors with late invoices to whoever? Does recovery costs compensation kick in automatically? Etc.
Also, anyone know if this still works in the UK, or if that went out the window with recent political events? There's an amendment of the Late Payments of Commercial Debts (Interest) Act 1998 dated 16 March 2013, but it references EU compliance... confusing
[Edited at 2021-04-30 16:07 GMT]
| | | | David Jones
Taiwan
Local time: 18:13
Member (2020)
Chinese to English
+ ...
TOPIC STARTER | Rookie error... | May 3, 2021 |
Tom, ha ha I'm not sure if I can phrase 'where the sun doesn't shine' professionally!
Elena - This is the first large project I've worked on for this client, but they have good reviews from other sources so I'm not particularly worried, I was just expecting monthly payments based on the contract. And thanks for the advice.
Rachel - This is an extract from the contract about payments:
a) Contractor shall provide the Purchase Order (as referred in Exhibit A) ... See more Tom, ha ha I'm not sure if I can phrase 'where the sun doesn't shine' professionally!
Elena - This is the first large project I've worked on for this client, but they have good reviews from other sources so I'm not particularly worried, I was just expecting monthly payments based on the contract. And thanks for the advice.
Rachel - This is an extract from the contract about payments:
a) Contractor shall provide the Purchase Order (as referred in Exhibit A) of translations expenses for the previous month to Client before 10th of each month.
b) Client shall pay the expenses in USD by wire transfer or Paypal transfer within 30 days after the receipt of Purchase Order. All and any transaction fees, expenses and/or costs charged by bank shall be borne by each party.
K. Isaac - that's a great idea. In my eager enthusiasm to clinch the deal I jumped on board without asking enough questions. Anyway lessons learned. Thankfully this client seems pretty trustworthy.
Nikki - This is a great idea. Thank you. I will definitely create my own, more explicit agreements for the future! ▲ Collapse
| | | | | Learning experience | May 3, 2021 |
David Jones wrote:
Tom, ha ha I'm not sure if I can phrase 'where the sun doesn't shine' professionally!
Elena - This is the first large project I've worked on for this client, but they have good reviews from other sources so I'm not particularly worried, I was just expecting monthly payments based on the contract. And thanks for the advice.
Rachel - This is an extract from the contract about payments:
a) Contractor shall provide the Purchase Order (as referred in Exhibit A) of translations expenses for the previous month to Client before 10th of each month.
b) Client shall pay the expenses in USD by wire transfer or Paypal transfer within 30 days after the receipt of Purchase Order. All and any transaction fees, expenses and/or costs charged by bank shall be borne by each party.
K. Isaac - that's a great idea. In my eager enthusiasm to clinch the deal I jumped on board without asking enough questions. Anyway lessons learned. Thankfully this client seems pretty trustworthy.
Nikki - This is a great idea. Thank you. I will definitely create my own, more explicit agreements for the future!
I suppose if you are happy they will pay eventually there is not too much harm done and you can chalk this one up as a learning experience.
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Ruth Clowes
Australia
Local time: 21:13
Member (2011)
Japanese to English
| Installments for delivery and payments | May 4, 2021 |
With big jobs, I often set installments for both delivery of completed sections and payments. I find this helps keep the work on track on my end and reassures the client that the project is moving along according to schedule as well as splitting up the payments so that I don't have to wait until the end of the project. This assumes that the project can easily split into sections of course.
| | | | Samuel Murray
Netherlands
Local time: 11:13
Member (2006)
English to Afrikaans
+ ...
David Jones wrote:
a) Contractor shall provide the Purchase Order ... of translations' expenses for the previous month to Client before 10th of each month.
b) Client shall pay the expenses in USD by wire transfer or Paypal transfer within 30 days after the receipt of Purchase Order. ...
I suppose it's possible to interpret those two paragraphs to mean that you could get paid once a month for a project that runs over multiple months, but not necessarily. They could simply have meant "the Purchase Order ... of [completed] translations' expenses". English does not seem to be their first language (based on the wording of those items). Do you get a purchase order from them at the start or at the end of the job?
Their claim that this is the "industry standard" way of doing things may simply mean that that is what they have always done and they don't consider themselves to be abnormal, so therefore what they have been doing must be the "way it is always done everywhere". (-:
Personally, I find 2-3 months to be short enough for a project to be considered something that is paid in a single sum and not in three installments. I do feel it is normal that if a project starts on e.g. 25 January and continues to 15 February, that you would invoice the entire job in February and not invoice half of it in January. But this may also depend on the volume of work, and obviously your agreement with the client.
I'm currently doing a large multi-month project and the work is divided into "batches", and we can invoice after each batch, but I imagine some of the slower languages take more than 1 month to complete a batch.
I think that if a project is large and stretches over a long period of time, then it is up to the translator to ask the client if it is okay to invoice for chunks of the work. But if the agency only gets paid by their end-client after the entire job is done, or if the agency hasn't received full payment for the entire job yet, they may be unwilling to agree to such a thing. Or, if their job management system does not allow for invoicing of partial purchase orders, then they would not be able to allow it, even if they agree that it would be fair to do so.
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