I have always operated this way and have always found it beneficial for my general health.

Jacek

Originally written by Jonathan Downie on December 12, 2008 12:58 PM bills should be paid on time.

Absolutely. It's not that in my last post I was trying to counter with a healthy Buddhist technique the fact that bills are not paid on time, though. Not at all. I was just trying to apply common sense to facts of life.

if the money isn't there, don't contract out the job!

Yet people will contract out jobs having no cash flow, so all contractors can do is apply, again, common sense in their Web promiscuity.

Jacek

Originally written by Laurent Chiacchierini on December 12, 2008 11:27 AM ... even though, as a freelancer, you don't have the same credit facilities as a company...

Or cannot get Congress to stay in session late to give you a bail-out!

One of my B2B principles is not to actually need the money from any particular translation job so that if it all goes pear-shaped I don't get foreclosed or have to go hungry until the next job is done. This is the commercial principle of always having contingency reserves.

Strictly speaking, that is the only sane way to freelance - not to actually need the money! You need to build up your contingency reserves out of the jobs that do pay on time, say, 5 - 10% of every job, paid into a reserve account.

But in the distant past, I was able on occasions to get a bridging loan from my bank by presenting the purchase order as evidence of my ability to repay but always by presenting an invoice for a job already completed (for a known solvent client, like a local manufacturer).

Of course, if you are doing a job for an unknown client half way across the world (high risk, not to be recommended) and there is no sign of payment even months after you sent your invoice and they don't answer your e-mails then it might be a good idea to get on with the work you have in hand and write the other one off as a bad debt. There is such a thing as throwing good money (or good translating time) after bad!

Derek

Originally written by Jonathan Downie on December 12, 2008 11:58 AM The point is that in the B2B world conditions are normally made by MUTUAL agreement.  Neither party should be able to unilaterally determine the conditions of payment but anyway...

It depends entirely on who needs who the most. If the translator really needs the job but the customer has a choice of translators then the customer unilaterally dictates the terms of payment. How could it be any other way? If the customer has left it too late to go shopping for an amenable translator and you are his last chance late on a Friday afternoon when none of the others are answering their e-mails then you are in a position to demand payment in advance even. I have done that several times.

As much as I agree with the general idea of the discussions, I have to point out that newer freelancers may not be able to be as relaxed with payments.  If bills need to be paid, they need paid.

Ah, yes, "new freelancers", how very sad! They should be grateful to be paid at all! That is why I always advise "new freelancers" to keep their day jobs.

As one of my translator colleagues has said elsewhere, if the money isn't there, don't contract out the job!

It seems to me that at least half the translation agencies in the world would have to go out of business if they followed that rule. The money is often not there until the customer pays. There are plenty of agencies that settle up monthly, one month in arrears, and even a few that settle up quarterly. Payment ninety days after receipt of invoice seems to be standard for very large industrial companies.

Sometímes I get paid via PayPal. I e-mail my invoice and the customer transfers the money to PayPal within the hour. Then I transfer the same amount to my bank account and it must be there in milliseconds but they sit on it for 5-7 days before it appears on my statement, PayPal says that this is standard, it is not anyhing that anybody can do something about. So if the banks can do it, why shouldn't an agency being run on a shoestring sit on payments to earn a little interest for 3 months if they can?

Derek

Originally written by Derek Thornton on December 12, 2008 1:12 PM This is the commercial principle of always having contingency reserves.

Originally written by Derek Thornton on December 12, 2008 1:51 PM I always advise "new freelancers" to keep their day jobs.

Surprisingly, these old-fashioned rules, which have always worked in the past, are likely to turn out more and more useful also in the coming years. You can never stress them enough!

Jacek

Originally written by Laurent J. Krauland on January 5, 2009 6:39 PM ... agencies run on a shoestring should be selling haberdashery, preferably made in some low-cost country (gross benefit margin from 300% on and upwards, so there's no need to keep money on a savings account for a meager 3.5% or even 6.0% interest rate).

That was ages ago and a lot of water has passed under the bridge since I wrote that and even General Motors has cashflow problems. I wonder how often translation agency owners have to decide at the end of the month whether to pay their employees or their freelance translators or pay the heating bill?

Derek