Business, Perspective

Payment Practices

The Trials and Tribulations of Getting Paid (if at all)

By Ayano Hattori

Ah, if collecting money were only as joyous as it sounds. To most of us, payment is harvest; when the fruits of our labor are expressed with a dollar sign followed by multiple digits (the more the better), we get a sense of justified satisfaction. This, in turn, reinforces our very existence as professional translators. After all, without payments we would simply be volunteers. If you’re one of those people that has never had any difficulties receiving payment, consider yourself lucky—very lucky. More than likely, though, you have had such difficulties and, I’m sorry to say, no matter what the law says or how well you translate, the risk of late or non payment will always be present.

A discussion was sparked recently in the NCTA online forum when one of our colleagues posted a response made by an agency after repeated inquiry regarding an overdue payment. The agency, a corporate member of ATA, replied that its “policy requires … paying [its] translators and editors upon the receipt of customer payment.” The agency reasoned that these measures are taken to stay “financially stable.”

Although I had never seen such small print in translation contracts before, I am all too familiar with it. I have found them in contracts from one of my specialized areas, the architecture and construction industry. It is commonly known as “pay when paid,” and unfortunately sometimes turns into “pay if paid.” These clauses put a tremendous burden on the subcontractor. Depending on the industry, the longer this chain of subcontracting extends, the longer one has to wait for the actual money to trickle down, if ever.

The legality of such clauses have been a hot-button issue and multiple states (including California and New York) have had legislative actions against such clauses. Late payments ultimately have greater impacts on smaller businesses because of the financial impact one missing payment could have. It has been such a problem that the Prompt Payment Act was introduced to help regulate the payment standards even for the U.S. government.

As in the case of our NCTA member/colleague, independent translators are in a contractual relationship with the agency, not the end user. Because the translator is not participating in the selection process of the original monetary source, the responsibility of collecting payment in a timely manner should be left to the agency (the party in contractual agreement with the end user), not the translator. As with any responsible business, translation agencies need to be able to account for the monetary lag between paying their independent contractors and getting paid by the original source, if or when such cases arise. It is the basic fundamentals in preserving the wellbeing of suppliers of the translation service and ultimately the business itself.

The Better Payment Practice Campaign states on its website: “As well as being unethical, the practice of deliberately paying later than the agreed terms is wrong for sound economic reasons:

  • It weakens your organization because it harms your reputation.
  • It damages your supply sources and strains your relations with suppliers.
  • It weakens the economy as a whole because it constricts growth.
  • Late payment is often taken as an indication that the buyer is in difficulties. If you create this impression with your suppliers you may find that their terms worsen.”

Some tips for decreasing risks and “confusion”: As with any business decision, know your options and choose carefully. Select payment terms and collection methods that you feel are comfortable and competitive. Check with your state (or country) laws for legalities and amounts.

  • Know your client. Do a little digging on the Internet for any “priors” an agency may have.
  • Have your payment terms in writing by stating them in a contract.
  • Take an advanced payment or retainer before the job begins.
  • Issue invoices on time and note the contractual terms. Use special payment terms if you feel this client is risky.
  • Charge interest and/or late fees.
  • Offer discounts for early payment.
  • Allow different methods of payment.
  • Sometimes, it’s a matter of convenience. If you can afford to make it easier for the client to pay, it may be worth it. Considerations include electronic transfers, accepting foreign currencies and Internet payment systems like PayPal.
  • Have insurance, such as Legal Expense insurance (an option if you feel you may have to use legal expenses to collect). Underbidding by extreme percentages and letting translators “fight it out” in online bids is only creating artificially low pricing that confuses clients and hurts our profession as a whole.

If we can establish personal contact, even if only over the phone, often the transaction can be brought back to a human interaction, where we have a chance to bring the focus back from price to precision, and thus re-establish the meaning of value.

Actions after the fact

Here are some paths you may choose to pursue if the client doesn’t pay on time.

  • Be persistent; remind the client consistently but professionally of the work provided and the payment terms agreed upon.
  • Help others know the risk of working with this client/agency. Post in online forums and payment practice lists.
  • Write to translation/interpretation organizations to help educate the larger business community on sound business practice. (Try places such as ATA Business Practice Education committee.)
  • Get someone else to do the job by utilizing collection agents.
  • Pursue non-court action through third party negotiation, mediation, conciliation or arbitration.
  • Seek the assistance of debt collection lawyers and legal agencies for either/both advice on the current law and use of one in other actions.
  • Take legal action through the court system.