The world is in the grip of a serious global financial and economic crisis. Some talk of a major global recession, while others see another Great Depression headed our way.
One thing is certain, though: These are extremely tough economic times for everyone. Companies are going bankrupt or laying off thousands of workers, and with the flow of credit seizing up, there is not much economic activity to speak of.
Translators, of course, are affected by this as well. When companies either shut down or pare back their operations, there is not as much demand for business plans, contracts or marketing copy to be translated, regardless of the language pairs involved.
But there is no doubt that freelance translators are the weakest link. Unlike agencies or direct clients, they usually do not have the kind of financial cushion that their clients have. During good times, freelance translators are frequently made to wait for payment – 30, 45, 60 or more days – and effectively turned into zero-interest lenders for agencies and direct clients.
When translators are usually the last to get paid, it should not surprise anyone that by the time payment finally arrives, most of it, if not all, will go towards overdue utilities bills, credit cards and the taxman. This leaves very little room for savings, no matter how frugal the translator is. Apart from the standard expenses, translators are also faced with steep costs for investments into their own business: specialized dictionaries tend to cost an arm and a leg due to small print numbers, and software, such as CAT, which is de rigueur, can set you back a thousand dollars or more.
Getting paid on time is a big problem for all freelance translators, with many clients delaying or defaulting on payment. This is why there are several online groups and websites where translators can share information on bad or slow payers so as to warn each other.
In this current economic climate, the payment issue will, sadly, only get worse, but not better. One translator, for example, has therefore changed his practices with respect to payment:
Because of this trend, I've revised my terms of service. In addition to requiring individual clients to pay in full in advance, I'm now requiring that if a company is not a member of ATA or a similar association or is not rated on Payment Practices, it must pay 50% in advance for at least the first project. I can still see some problems with this policy, but for now I feel that it protects me against a complete non-payment situation.
Why not? When you go into a store and make a purchase, the store owner will get his money right away, either in the form of cash or a guaranteed payment via your credit card or debit card issuer. Why is it, then, that a translator asking to be paid right away is such a problem for so many clients?
Agencies for the most part will refuse to make any prepayment, even if it is as low as 50 or 25 percent. Nor will they agree to pay the translator immediately upon receipt of the finished translation. Direct clients are usually more amenable to the suggestion of a prepayment, deposit or "retainer".
But when a translator is not paid right away for his or her work, he or she automatically becomes a lender at zero interest – not exactly a fair practice. When the agency does not pay for 45 or 60 days, it effectively obtains an interest-free loan from a freelancer, who does not have the financial resources the agency enjoys, for 45 or 60 days. Payment practices lists and message boards, incidentally, are full of reports about agencies that do not pay for 120 days or longer.
When it comes to asking for a deposit or retainer fee (after all, this is what lawyers do, and therefore should be a legitimate practice for translators who are just as professional), translators must start holding firm. Too many clients regularly get away with "murder", because translators are afraid to ask for prepayment.
New clients, in particular, should never get away without making some sort of deposit first. Only once a payment history has been established should clients be granted more favourable terms, such as payment within 30 days (the absolute maximum, by the way).
Speaking of 30 days' payment terms, in the EU there is a directive that obligates companies to pay off their contractors within 30 days. However, most European companies do not comply with this law, because the authorities have done absolutely nothing to enforce it. But any European agency or client that fails to pay a translator within 30 days is technically in breach of the law and therefore a fraudulent outfit for all intents and purposes.
The conclusion is straightforward and simple: don't be afraid to ask for your payment upfront. You may lose some potential clients, but overall you will come out the winner, because you will spend less time chasing after delinquent clients.
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