| Pages in topic: < [1 2] | Payment terms being ignored Thread poster: Fabian Luttman
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Lol. What is it with the US? I can pay all my bills from my phone using an app even though my bank is tiny and run by hippies living in a yurt, and I can ApplePay all my groceries even though I live in webbed-toe Hicksville, yet the tech leaders of the known universe still can’t transfer money to a bank account?
Why would you want to give them such a big discount? You’re not going to lose any interest in the current climate. It’d be cheaper to borrow the money if you need it fast.
| | | | Samuel Murray 
Netherlands
Local time: 14:17
Member (2006)
English to Afrikaans
+ ...
| @Dan (and @Tom) | Oct 14, 2020 |
Dan Lucas wrote:
Still, the $500 you suggest is 6% of $8,300, which is a huge discount.
The original amount is $7500. The amount of $8300 is the original amount plus two 30-day surcharges of $400. This is all explained in the original poster's post.
So, my suggestion is that instead of slapping the client with an $400 surcharge for not paying within 60 days and another $400 surcharge for not paying within another 30 days, rather raise the invoiced amount by $800 and then offer him a discount of some round-looking figure of, say, $500. The extra $800 doesn't represent extra work, and the translator doesn't do $500's worth of work for free here (as Tom seems to believe). It's just an accounting trick.
Chris S wrote:
Why would you want to give them such a big discount?
Not a single person in this thread suggested an actual discount yet.
[Edited at 2020-10-14 09:20 GMT]
| | | | Sheila Wilson
Spain
Local time: 13:17
Member (2007)
English
+ ...
| The problem with long payment terms | Oct 14, 2020 |
Nurettin Ceylan wrote:
I do/did have clients who have 60 or 90 days payment period. I would say keeping the client who sends you regular work is much more important especially in this difficult climate.
The problem has to do with the amount of credit they're building up. For a 90-day payment term, you invoice on 1/1, say. You then work until 1/4 before the invoice is due to be paid. By then, you've sent invoices on 1/2 and 1/3 which are now in the pipeline (or multiple invoices if you invoice per job). By 2/4, payment is overdue and you then start chasing for your money, but it would probably be a good 2 weeks, maybe a month before you get worried enough to stop working for them any more until you get paid. By now, relations have broken down, you're refusing to work for them, they're annoyed, and they STILL haven't paid the 1/1 invoice. But they also haven't paid for anything else you've done since that date. You've now "lent" at least four months' work to this client at zero interest rate, and they're clearly not trustworthy. If they now announce they're filing for bankruptcy, you can probably kiss goodbye to every cent of that four months' income (I didn't receive a cent in two client bankruptcies).
Map out the same scenario for a client who pays in 30 days and you find you stand to lose a whole lot less money if the worst comes to the worst.
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Samuel Murray wrote:
Not a single person in this thread suggested an actual discount yet.
That’s splitting hairs. Whether it’s dressed up as a discount or a penalty, it’s less money received for earlier payment.
What are the chances of an oil company going under? Not 6%.
That said, the last time we were paid by cheque, it was from Enron
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Samuel Murray
Netherlands
Local time: 14:17
Member (2006)
English to Afrikaans
+ ...
Chris S wrote:
Whether it’s dressed up as a discount or a penalty, it’s less money received for earlier payment.
You're right -- it's a matter of principle and morality. Getting the client to pay $7800 so that they can avoid paying $8300 is worse than getting the client to pay the original $7500. It's less money for earlier payment, and that is a wrong and evil thing.
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