Tags
financial planning, freelance translator, Freelancer, late payments, Professional translator, self-employed, self-employment, working from home, working practices
Don’t get me wrong, I love being a freelancer: I relish being able to choose what tasks I accept and decline, I love being my own boss and working when it suits me (even if that often ends up being more than I’d anticipated!), I even thrive on the inevitable isolation. Yet the one thing that really gets to me, even after all these years, is payment delays. Not for one minute would I consider returning to the predictable certainty of salaried employment, but slow-paying clients can really rock the boat of the most established freelance businesses.
I’ve been self-employed for over 26 years now and in all that time, I’ve only ever had one client fail to pay at all. That was a publishing company that went bankrupt soon after I did my one-and-only translation for them and, strangely enough, I had had my doubts about them before accepting the job. They had a respectable 4 on the ProZ Blue Board and the project managers seemed professional enough, yet for some reason alarm bells were ringing at the back of my brain. The job was right up my street, however, so I ignored my instinctive reaction, only to regret my decision soon after, when it became apparent that I certainly wouldn’t be seeing my £500. Never again: gut instinct is there for a reason and I’ve listened to mine ever since!
Slow payers, on the other hand, are an entirely different kettle of fish. Most of my clients pay on time in line with my 30-day terms and some pay even more promptly – definitely my favourite kind! I often think that prompt payment has to be up there with rates as one of the key attributes of a good client: paying high rates is all very well, but if they also take ages to pay and you have to spend time chasing late payments, the attraction starts to wear off. There’s definitely a balance to be achieved and I sometimes think it’s preferable to accept a slightly lower rate in the knowledge that you’ll be paid on the dot – or in a matter of days in some cases!
This post is in part inspired by a recent case where a large corporate French client was approaching 60 days from invoice, rather than the contracted 30 days. I’d chased them several times and was just about to issue an invoice with delay interest in line with the EU Late Payments Directive, when the overdue payment magically appeared in my bank account. I’ve been working with this particular client for a number of years and we have a formal contract (stipulating 30 days from invoice), but every so often they seem to go through a spell of delaying settlement. The very fact that they are such a large company makes it hard to track down the specific department to speak to in such cases, and my contacts, pleasant though they are, always seem to pass the buck. It’s also hard to broach payment complaints with colleagues you normally bend over backwards to accommodate – or is that just me? I have no problem with complaining about poor service in restaurants or shops, or shoddy products, but I do find it difficult to take a harder line with clients when things don’t run smoothly. (Note to self: must try harder!) In this particular instance I followed up receipt of payment with a note to my contacts seeking reassurance that I would be paid sooner in future and mentioning the terms of our contract and the EU Directive – only to receive a defensive ‘phone call saying they couldn’t possibly “guarantee” payment in 30 days and the problems had been due to reorganisation, the Christmas break, holidays, blah, blah, blah…. However, since then, other payments have miraculously been made within 30 days, so perhaps my little note did serve its purpose after all?
Of course, the simple solution would be to refuse to work with clients who don’t play the 30-day ball and it has certainly been on my mind to turn them down in future, and yet…. they’ve never not paid, they are a prestigious name in my specialist field, and they pay good rates. A difficult choice. The conclusion I’ve reached is not to take on huge chunks of work for potentially tardy clients, so that I limit my exposure to cashflow problems. The problem in my recent situation had come about due to a relatively slow November, followed by a large job for this particular client in December, then 10 days’ holiday over Christmas/New Year and another large job for a different client that wasn’t invoiced until the end of January. Had the party in question paid on time, all would have been well; as it was, I was forced to resort to my cushion of 3-6 months’ income for precisely such awkward situations. Freelancers just starting out may not have the luxury of a substantial rainy-day fund, however and there is no doubt that many small businesses fail to make it because their clients fail to pay on time: cashflow is all.
I always try and mix in longer jobs with shorter jobs (as I described here), which also helps to minimise long periods without income, and I now expressly state my payment terms on my invoice. I’m beginning to think specifying a due date might be a good idea too! Having defined business terms and conditions is a no-brainer, of course – mine are on my website. I’ve reached a solution with another client, who has been slow to pay in the past, whereby I send them a reminder the week before the payment is due: since doing this (at their suggestion), they have been true to their word and paid on time, so the reminder is a small administrative price to pay. I’ve also now outlawed cheques as a means of payment after a largish cheque from one agency bounced, causing untold panic at my end (I don’t do overdrafts!) and transfer from savings back to cover the problematic sum. The agency were very apologetic, blaming an “admin error” and the payment did eventually clear, but I’ve since informed them in no uncertain terms that only bank transfers are acceptable from now on. I hadn’t in fact realised that banks have up to 7 working days to return cheques unpaid, not the three clearance days I’d always assumed, so in theory you may think you’ve received payment from a client, but you can’t actually access it until it has cleared, which could be nearly two weeks later….
I should add that I’ve been extremely lucky on the whole and most of my clients pay on time or before, but even one delayed payment can upset the most organised of apple carts if you’re not careful. If you’ve any other thoughts on how to galvanise slow payers into action – or avoid them altogether! – I’d love to hear them.
Arline Lyons said:
Hi Claire,
Thanks for an interesting article! It’s always good to hear about the issues others face and how they deal with them. It sounds like you’ve got a well thought-out approach, plus instinct! It is difficult when an otherwise perfect client doesn’t pay on time and you can’t track down who to talk to.
You mentioned putting a due date on invoices and issuing reminders – I use FreeAgent which, while not perfect, does automatically insert a due date on invoices based on your payment terms (entered when creating the invoice) so that’s taken care of. It also issues reminders automatically, e.g. 7 days before the due date, although I’ve never used that feature.
All the best,
Arline
clairecoxtranslations said:
Thanks Arline. That sounds worth looking into, as of course many of us accept different terms for different clients, be it a straight 30 days or 30 days end of month, or whatever. I must admit I’ve never gone down the invoicing software route, preferring to stick to my tried-and-tested Excel-based system (so old-fashioned!), as I’ve been put off by the fact that you have to subscribe to them. But perhaps I should reconsider?
Arline Lyons said:
FreeAgent does have a subscription fee (currently £19 + VAT/month in the UK, although you can pay yearly up front and get the year for the price of 10 months). I like being able to look at the “Overview” page and see immediately if something is overdue, plus the amounts coming in over the past/next few months. I also use it to record my business bank transactions and log expenses, then export the lot to my accountant at the end of the year – if you’re in the UK I think it lines things up for self-assessment. It’s not perfect, but I’m happy with the price for what it does. They have a free 30-day trial so you can give it a spin and see if it works for you, and there are other similar systems as well, like Xero, KashFlow and Wave, although I don’t know much about those.
Sarah said:
This was timely post for me Claire, I’ve just been chasing three late-paying clients. For one of these I agreed on 60-day payment terms (I don’t take on too many assignments for them) and the payment was still late! They actually approached me with another enquiry so I was able to say I would only accept the new job if the old one was paid and payment magically appeared within 24 hours.
It’s interesting to hear that you are considering a due date because I’m thinking about removing it. What I’ve found is that the due date is used as the day the client makes the bank transfer and then the payment comes in (late) a few days later.
In any case I’m happy to say I’ve always been paid for my work even if it requires a bit of chasing but like you, my favourite type of clients pay promptly without reminders!
clairecoxtranslations said:
It’s amazing how often payment materialises when they want you to do another translation, isn’t it?! Whether we should just roll over and accept is another matter, but I suppose it depends on the client and your relationship with them. I know I have in the past used the new job as a stick to insist on better payment practices next time round and that has, in general, worked – but large corporate clients are a law unto themselves, as Charlie says.
Charlie Bavington said:
Good to see you avoided all that whiny “I’m not a bank” nonsense some people like to trot out, demonstrating a clear lack of understanding of standard business practices. There are industries where 270 day payment terms are not unusual, so we should consider ourselves fortunate 🙂
Large companies can be a nightmare. Certainly 10-15 years ago, the company with the largest number of CCJs against them was BT. Not ‘cos they were skint, merely hopeless…. In general, I think small businesses struggle with huge companies not paying them promptly, it’s a recurring feature in the business news (hence, in part, the directive).
Like you, I find it hard to be too firm. It’s not like complaining about poor service in a restaurant. The boot is entirely on the other foot, really. I just go for polite persistence, rather than escalation, and I’ve only needed to do that from time to time. Each to their own, however, naturally. And yes, with options like credit insurance and factoring beyond the reach of most of us, I think gut instinct has to play a part, although I’d struggle to explain why and will stop now before I find myself recommending credit decisions based on reading tea leaves 🙂
clairecoxtranslations said:
Yes, polite persistence is the only way for me, really, especially if you want to maintain the relationship. The costs involved with taking legal action are often just not worth it for the amounts in question. Love the notion of client decisions based on tea leaves – now there’s a thought! Certainly not something there’s a shortage of in my household!
Paula Arturo said:
I totally relate to your post, Claire!
The story with your non-paying client reminded me of one of the first lessons I learned as a newbie: follow your gut! I’m a rationalist (in the philosophical sense of Descartes, Leibniz, Spinoza, etc.) and, therefore, tend to follow my brain a lot more than my heart or gut. But when I was a newbie, I was in a very similar situation as the one you described: there was something just a little off about a client, and I couldn’t quite put my finger on it from a rational point of view. Meanwhile, one of my closest friends is a shrink and I when I mentioned it to her she argued that following your gut is the rational choice. She claimed that our brains process little hints and clues on a subconscious level much more quickly than at a conscious level and that “that little something we can’t quite put our fingers on” or that “fishy feeling” we get from time to time can be rationally explained once the information is fully processed. To make a long story short, the client never paid and I was eventually able to fit the pieces together and realize I should have listened to my gut in the first place.
Since then, my “gut” has been telling me a lot of what you are saying in your post: slow payers are just as damaging as non-payers, even if they pay better fees, don’t put all your eggs in one basket, mix in longer jobs with shorter jobs, etc. But what I’ve mainly learned is to be picky about my clients. When I was newbie I worked for whoever would trust me with their documents, now I work with whoever strikes me as serious and professional; and, like you, I haven’t had to deal with any other non-payers. So, maybe you haven’t been lucky, maybe you’ve been really good at picking your clients and protecting your business.
clairecoxtranslations said:
I think you’re probably right, Paula – that instinct is undoubtedly based on something even if we can’t at that stage quite work out what! Glad to hear trusting your gut feeling is paying off for you now too.
Olga 奥日佳 (@keai) said:
I use the Proz.com invoicing tool and it works like a charm. You can adjust payment terms for each invoice and send reminders when required, among many other nice features. I like it.
I had to chase a client for about 9 months before he finally was “kind enough” to pay me. Apart from that time and a few other reminders I have had to send, in the 10+ years I have been working as a translator, I have been lucky enough to always get my money in the end (following your gut instinct is crucial, as you pointed out).
I hate slow payers but they won’t make me love being a translator any less.
I love reading both your blogs, Claire. Keep up the great work!
clairecoxtranslations said:
Thank you Olga – I’m so glad you like them! And I wouldn’t change being a freelance translator for anything either….
Pingback: Weekly translation favorites (Mar 27-Apr 2)