Making them Pay: Billing tips for Freelancers

Do your hands start to sweat when, after working hard on a job, and it’s all done and dusted, it’s time to write the bill?

Or are you the kind of person who has the bill all ready and printed up, pinned above your desk as motivation, before you even start the job?

Or do you sometimes even forget to send out bills and wonder why you never get paid? Or even worse, feel nervous about sending them, because you’re scared of the big numbers?

I used to practically apologise when I sent my bills out, waiting as long as I possibly could before sending, so as not to inconvenience anyone. Some companies even had to remind me, because they needed to close the lid on a project within a certain time frame.

But, in contrast, I would  always be on call and immediately available to do work, overnight if needs be. Even in this kind of scenario:

Screen Shot 2015-10-10 at 20.08.42

I never questioned that I would always stick to deadlines, but larger PR companies never seemed to manage to pay up on time: sometimes as late as three months on!

One day, the sun came out and I had a bit of a Michael-Douglas-in-“Falling Down”-moment.

Screen Shot 2015-10-09 at 21.01.23

Something had to change.

Working my butt off, delivering top notch translations, my kids were starting to think my computer mouse was surgically attached to my hand, and somehow I was always overdrawn. And it wasn’t my coke habit.

I was paying good money to my bank in the form of interest on my overdraft in order to facilitate companies paying me late. The unfairness of this dawned on me…which is why I’m sharing this with you: to save you my pain.

There is  a reason why it is always the BIGGEST richest companies that take so long to pay. It’s because they know that one more day of that money in their bank account is earning them money. It’s a policy inbuilt into most large corporations. It makes sense. Imagine for one moment you are the editor of a magazine, you have to pay, say, 150 people at least 1000 euros each for various tasks, like lighting, fashion shoots, make up, writers, translators. We are talking 150,000 euros before you even sell a copy. That’s a lot of money. Paying that on Monday, or paying that on Friday, would already be a difference of 65€ in interest. Put into a savings account, the 150K would net you 3405€ a year. So holding onto that money for, say, two months, would save your company 520€.
Which means that in order to make these big businesses pay up promptly you have to appeal to their money-saving budgetary spirit. Don’t rely on their good will, their friendship, or their sympathy. That’s not how it works.

th-2

1. So the first tip is this: You don’t have to name a grace period.
You delivered the service; they can pay now. You know how when you go into a shop to buy a newspaper? You have to pay for it right there and then. And you don’t start haggling with the newsagent on whether you can get it for 10% less because there are more pages in it than last week.

My tax lady has this on her bills:
Die Forderung wird sofort fällig.
Gemäß § 286 Absatz 3 BGB tritt wegen der oben berechneten Gebührenanforderung nach 30 Tagen, gerechnet ab Zugang dieser Rechnung, ohne eine gesonderte Mahnung Zahlungsverzug ein, sofern der Rechnungsbetrag noch nicht gezahlt ist.

This translates into something like:
You need to pay this now.
According to § 286 section 3 BGB we are going to hit you with interest on this if you don’t pay up within 30 days, suckers. Without us even sending you a reminder. Boom!

And you don’t want to mess with the tax lady, right?

tumblr_inline_mjhc3yOgMp1qz4rgp

2. Go Skonto!
I once paid a bill and was confused to see two different sums listed at the bottom. The cheaper sum had the word “Skonto” in front of it, which I discovered is German for “early payment discount”. Apart from being the one time in my life that I discovered a word that was shorter in German than its English equivalent, it also piqued my interest.

The “Skonto” price was 2% less than the “normal” price. If you paid up within 14 days you got the good reduced deal; after that you had to pay full. This is perfect for all those pennypinchers because it makes them feel they are getting a special deal if they pay faster. (Of course if you try this at home, remember to make the Skonto price your default price, and add 2% to that to get the “normal” price.

DweDDx0

Of course!

Since then my favourite notorious client has always paid up promptly, and my phone calls to him are just about the job at hand.

3. Nice Client Privilege
Of course as a courtesy to regular clients who send me several jobs a month, and to keep my admin to a minimum, I wait until the end of the month before billing them, keeping abreast of every client in an excel sheet. So they are often paying 28 days later anyway. I also (thanks to Paula for this great tip) have a sheet of paper in IRL where I number and enter all the bills I write, because I have lost count of the times I have saved bills under the wrong number when overwriting them on my computer, and been told off by my tax lady. It also helps me keep track of late payers.

4. Payment between Peers
When I outsource work to other people, I do consider it my duty to pay them as soon as I can, even if I haven’t been paid yet for that specific job. That’s my personal choice though, more to do with the fact that I can still remember the sleepless nights I had trying to make rent, and I think it fosters loyalty and means they will be there for me in a pinch. Clients who pay me on time always get my full attention and I am happy to translate a hastily written review via my phone when they are stuck at London Fashion Week and need a quick fix.

scandal-it-s-handled-olivia-pope

With my cooperation partner things are different. Because we rely on each other often on a daily basis we are a lot more flexible when it comes to paying. We have also figured out a very low sum for our reciprocal proofing. Each translator will need to find out what makes sense for them, but we usually pay each other around a fifth of the net project fee for proofing. This deal allows us to bring a USP to the table with our clients. Our price automatically INCLUDES the proofing by another eagle-eyed native speaker. Which often makes the difference between a good translation and a translation that can really sing.

tumblr_md52mu5fyS1qf6zix

5. And lastly, if it’s really bad, and making you feel miserable, for clients with a really bad paying attitude (it ain’t called “Zahlungsmoral” for nothing in German) you can always charge higher rates to make yourself feel better. Ironically, it is usually those clients requesting last-minute urgent stuff who are particularly lax about paying, so go ahead and slap on a 25% express fee, I dare you. And if they baulk and head for the hills, then so what? In those three months before they would’ve paid up, you can find a new client to fill the hole. It’s certainly better than doing a Walter White!

And remember:

Screen Shot 2015-10-09 at 21.19.00

Advertisements

One comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s