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My only experience as a service provider has been as a translator. On top of that, I work for large translation agencies 98% of the time. So, I have become accustomed to certain payment terms within the bounds of these limitations. I started paying attention to OTHER service providers’ payment terms when I went through the process of selling my house, and I found key differences. This led me to look further into one of those differences to better understand it - the timing of payment. It was educational, informative.
Timing of payment differences
When working as a translator for large translation agencies, net-30 or net-45 are the most common payment turnaround times. This means that I provide the invoice after completing the work, and the agency pays me within 30 or 45 days. If the agency does not pay, I have to contact their vendor relations department and ask what went wrong, then “patiently” wait to be paid.
My newest client recently missed two payments, and I was too timid to take the opportunity to charge them a late fee. Although, I did threaten to share my bad experience with the translator community and discourage LSP’s from working with this client. At this point, they hustled to pay me.
For certain service providers:
On the other hand, some service providers, such as plumbers, roofers, carpet installers, and others, ask for payment at a couple of points in time. Some will ask for a deposit before they begin work. This is common when a large quantity of materials is involved (for example 100’s of yards of carpet). This deposit seems to safeguard the service provider, ensuring I will use their service and not leave them high and dry with supplies they may not be able to re-use.
Then, once the work is completed, they expect to be paid as soon as possible, within 7 days. I haven’t tested the limits of this, though. Perhaps some providers allow 14 days. Perhaps some start adding on late fees or interest. I do not know.
Why these differences?
I believe the biggest reason translators working for large agencies are paid on lengthy terms is the size of the company paying us. Large agencies need time to process the invoices of dozens, even hundreds of vendors, and time to acquire payment from the actual client, then go through the steps of paying their vendors. In fact, I’m pretty sure agencies have entire departments devoted to this. In short, they need more time to get everything in order before being able to pay us.
Whereas the service providers I mentioned are paid by individual customers most of the time, so they only have to collect payment directly from those individuals, then the job is over.
As in my example above, you can see why it’s difficult to chase down late payments and even more difficult to enforce late payment fees (agencies don’t have a system to process such fees). This is something I have accepted. Nevertheless, I know some translators are more active and wish to promote change.
Are you one of those translators? What would you suggest needs to change to ensure better payment terms from large agencies?