| Pages in topic: < [1 2 3] | Dropping another client with crummy payment policies Thread poster: Steven Capsuto
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Williamson 
United Kingdom
Local time: 18:41
Flemish to English
+ ...
| A reference. | Dec 23, 2010 |
Charlotte Blank wrote:
... what about other legislations than EU's? Is there any obligatory payment deadline stated in other countries' laws? Within EU, I can tell the client, "look here, according to the law you have to pay within 30 days" (if he accepts is quite another thing of course) but what can I do with clients "outside"?
Charlotte
@ José and Charlie: My mother in Germany uses to pay craftmen's bills within one week but always takes a cash discount of 2% 
The European Guideline on LatePayments in Commercial transactions has been implemented in the national legislation of the 27 Member-States, which means that it does not matter wheter a customer lives in Spain or in Estonia, payment is after 30 days, also if that customer is a government institution (see exceptions below).
The "old" Guideline dates from 2000 and has been revised. This revision has been approved by the EP, which means that it will go to the Commission and published in the Official Journal, whereafter it will have to be "transposed" into national legislation. In some countries, like Spain, it took several years to publish the original guideline in the BOE.
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT%20TA%20P7-TA-2010-0374%200%20DOC%20XML%20V0//EN&language=EN
"The European Parliament adopted by 612 votes to 12, with 21 abstentions a legislative resolution on the proposal for a directive of the European Parliament and of the Council on combating late payment in commercial transactions (recast).
The Parliament adopted its position at first reading under the ordinary legislative procedure (formerly known as the codecision procedure). The amendments adopted in plenary are the result of a compromise reached between the European Parliament and the Council. Parliament amends the Commission’s proposal as follows:
Subject matter and scope: the amended text specifies that the aim of this Directive is to combat late payment in commercial transactions, in order to ensure the proper functioning of the internal market, thereby fostering the competitiveness of businesses and in particular of SMEs
Definitions:
late payment means payment not made within the contractual or statutory period of payment. A debtor’s payment is considered late if the creditor does not receive the money by the agreed date and has fulfilled its contractual and legal obligations.
in plain English: The (Correct) Word on Time = Payment on Time
Amount due means the principal sum which should have been paid within the contractual or statutory period of payment, including the applicable taxes, duties, levies or charges specified in the invoice or the equivalent request for payment.
In plain English: What you've earned + taxes+charges for Paypal, Moneybookers or any other bank-charges or in case of interpreting: per diems.
Interest on late payments – transactions between undertakings
Member States (are Italy, France and Spain Member States, not when it comes to timely payment for translation assignments) shall ensure that if the date or period for payment is not fixed in the contract, the creditor is entitled to interest for late payment upon the expiry of any of the following time-limits:
30 calendar days
following the date of receipt by the debtor of the invoice or an equivalent request for payment
if the date of the receipt of the invoice or the equivalent request for payment is uncertain,
30 calendar days after the date of receipt of the goods or services.
In addition, Member States shall ensure that:
the maximum duration of the procedure of acceptance or verification does not exceed 30 calendar days from the date of receipt of the goods or services, unless otherwise expressly agreed in the contract and provided it is not grossly unfair to the creditor
the period for payment fixed in the contract does not exceed 60 calendar days, unless otherwise expressly agreed in the contract and provided it is not grossly unfair to the creditor.
Compensation for recovery costs: when interest for late payment becomes payable in commercial transactions, the creditor is entitled to obtain from the debtor, as a minimum, a fixed sum of EUR 40. This fixed sum is payable without the necessity of a reminder and as compensation for the creditor's own recovery costs.
The creditor shall, in addition to the fixed sum, be entitled to obtain reasonable compensation from the debtor for any recovery costs exceeding that fixed sum and incurred due to the debtor's late payment. This could include expenses incurred, inter alia, in instructing a lawyer or employing a debt collection agency.
Transactions between undertakings and public authorities: in commercial transactions where the debtor is a public authority , the creditor is entitled upon expiry of the period defined in the Directive to statutory interest for late payment , without the necessity of a reminder, where the following conditions are satisfied:
Member States shall ensure that :
the period for payment does not exceed any of the following time-limits:
i) 30 calendar days following the date of receipt by the debtor of the invoice or an equivalent request for payment;
ii) if the date of receipt of the invoice or the equivalent request for payment is uncertain, 30 calendar days after the date of the receipt of the goods or services;
the date of receipt of the invoice is not subject to a contractual agreement between debtor and creditor.
Member States may extend the time-limits up to a maximum of 60 calendar days for:
-any public authority which carries out economic activities of an industrial or commercial nature by offering goods or services on the market and which is subject as a public undertaking to the transparency requirements laid down in Commission Directive 2006/111/EC;
-public entities providing healthcare which are duly recognised for that purpose.
If a Member State decides to extend the time-limits in accordance with the first subparagraph, it shall send a report on its implementation to the Commission within five years of the entry into force of this Directive. On this basis, the Commission shall submit a report to the European Parliament and the Council indicating which Member States have extended the time-limits in and taking into account the impact on the functioning of the internal market, in particular on SMEs. That report shall be accompanied by any appropriate proposals.
Member States shall ensure that:
the maximum duration of a procedure of acceptance or verification does not exceed 30 calendar days from the date of receipt of the goods or services , unless otherwise expressly agreed in the contract and any tender documents and provided it is not grossly unfair to the creditor;
the period for payment fixed in the contract does not exceed the time-limits, unless otherwise expressly agreed in the contract and provided it is objectively justified in the light of the particular nature or features of the contract, and that it in any event does not exceed 60 calendar days.
With regard to being a creditor to agencies/companies without any liquidity:
Unfair contractual terms and practices:
-the Directive should prohibit abuse of freedom of contract to the disadvantage of the creditor.
As a result, where a term in a contract or a practice relating to the date or period for payment, the rate of interest for late payment or the compensation for recovery costs is not justified on the grounds of the terms granted to the debtor, or it mainly serves the purpose of procuring the debtor additional liquidity at the expense of the creditor, it may be regarded as constituting such an abuse. For that purpose, any contract term or practice grossly deviating from good commercial practice, contrary to good faith and fair dealing, should be regarded as unfair to the creditor.
In particular, the outright exclusion of the right to charge interest should always be considered as grossly unfair, whereas the exclusion of the right to compensation for recovery costs should be presumed to be grossly unfair.
In the context of enhanced efforts to prevent the abuse of contractual freedom to creditors’ detriment, in the amended Directive, officially recognised bodies, and bodies with a legitimate interest in, representing undertakings should be able to take action before national courts or administrative bodies in order to prevent the continued use of contract terms or practices which are grossly unfair to the creditor.
Transparency and awareness raising:
Member States shall ensure transparency about the rights and obligations stemming from this Directive, including by making publicly available the applicable rate of statutory interest for late payment.
Furthermore, the Commission shall make publicly available on the Internet details of the current statutory rates of interest which apply in all the Member States in the event of late payment in commercial transactions.
Member States shall
i) use professional publications, promotion campaigns or any other functional means to increase awareness of the remedies for late payment among businesses;
ii) encourage the establishment of prompt payment codes which set out clearly defined payment time-limits and a proper process for dealing with any payments that are in dispute;
iii) encourage the publication of a list of prompt payers.
Might be a suggestion for Proz.com ?
Payment schedules: it is stipulated that this Directive shall be without prejudice to the ability of parties to agree, subject to the relevant provisions of applicable national law, on payment schedules providing for instalments.
In such cases, where any of the instalments is not paid by the agreed date, interest and compensation provided for in this Directive shall be calculated solely on the basis of overdue amounts.
Recovery procedures for unchallenged claims:
Member States shall ensure that an enforceable title can be obtained, including through an expedited procedure and irrespective of the amount of the debt. They shall carry out this duty in accordance with their respective national laws, regulations and administrative provisions.
I did not know that translation-agencies in France, Spain, Italy, Belgium and other countries where it is "customary" to pay after 60 days -90 days or more are public authorities or entities.
Anyway, the spirit of the guideline goes in the direction of 30 calendar days , but old habits are difficult to change, even 10 years after the original guideline and 6 years after publication in all the Moniteurs Officiels (Belgium and France), Gazetta dello stato (Italy), Boletin Oficial del Estado (Spain) of the E.U.
Remember the volcano eruption at the beginning of this year. After an original refusal of cost-reimbursement even Ryanair had to back down and pay their passengers a compensation (which in many cases was worth more than the price of their ticket) based upon a European guideline which says that if airlines can not take on passengers that have booked a flight, they have to be reasonably compensated.
Only for the freelance translation sector, European guidelines are just words on paper, which the translation sector can, even after transposition into national law, due to the meekness of some interpret as it sees fit, guideline or no guideline, law or no law.
With regard to B2C: Most transactions are cash, no credit given.
@Charlotte: with regard to Germany: Do a search in the http://www.bundesgesetzblatt.de/ for Directive 2000/35/EC.
[Edited at 2010-12-23 23:04 GMT]
| | | | Steven Capsuto
United States
Local time: 13:41
Member (2004)
Spanish to English
+ ...
TOPIC STARTER
Charlie Bavington wrote:
Because they are not universal? Unlike, say, bank accounts. I wouldn't touch a client who wanted to use PayPal with a barge pole. Amateurish and shady, in my humble opinion
A number of my clients (especially overseas or individual clients) pay me via Paypal and it's a fine solution. It's just a matter of building the Paypal fees into the pricing for those jobs.
| | | | Tom in London
United Kingdom
Local time: 18:41
Member (2008)
Italian to English
| EU legislation | Jan 8, 2011 |
Unfortunately the EU legislation is full of holes and has no effect, for instance in Italy, where all my clients pay at 90 days and sometimes even longer. With very few exceptions, 90 days is assumed to be the norm in Italy. But my clients *do* pay and are reliable, so as long as I have an income stream coming in each month, I don't much care if the payments refer to translations I did 3 months before. Although sometimes the client needs to be reminded of what they were - so I keep a careful spr... See more Unfortunately the EU legislation is full of holes and has no effect, for instance in Italy, where all my clients pay at 90 days and sometimes even longer. With very few exceptions, 90 days is assumed to be the norm in Italy. But my clients *do* pay and are reliable, so as long as I have an income stream coming in each month, I don't much care if the payments refer to translations I did 3 months before. Although sometimes the client needs to be reminded of what they were - so I keep a careful spreadsheet of what has not been paid and when it falls due.
[Edited at 2011-01-08 09:56 GMT] ▲ Collapse
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Steven Capsuto wrote:
Charlie Bavington wrote:
Because they are not universal? Unlike, say, bank accounts. I wouldn't touch a client who wanted to use PayPal with a barge pole. Amateurish and shady, in my humble opinion
A number of my clients (especially overseas or individual clients) pay me via Paypal and it's a fine solution.
Absolutely, I said as much 2 sentences after the bit you quoted. I'm not recommending that everyone abandons PayPal. I'm just saying, by the same token, that no-one need feel obliged to work with it, one can manage without it, and that personally I'm fairly wary of clients who want to use it: if they are in "the West" then I'd rather use inter-bank transactions, and if they are elsewhere, then in truth it's unlikely I'll strike up a business relationship because I feel it is too risky - for me. I'm fairly risk averse.
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Steven Capsuto
United States
Local time: 13:41
Member (2004)
Spanish to English
+ ...
TOPIC STARTER | Depends where you're based | Jan 8, 2011 |
Charlie Bavington wrote:
if they are in "the West" then I'd rather use inter-bank transactions,
A lot depends what part of "the West" you're in. I can definitely see why there's less need for non-bank solutions in the UK.
You have the fortune to live in a country where bank transfers are so commonplace and affordable that the UK is considering dismantling its check-processing system. Not so here in the States. If I want to transfer money to an overseas bank, it costs me $35, regardless of the sum. My previous bank charged almost $50 per transaction. And to exercise this expensive privilege, I have to physically go to the bank and fill out paperwork. Even incoming overseas wires have a slight fee (charged by an intermediate bank that acts as a clearing-house).
So for me here, any client who can't pay me by U.S. check is welcome to pay via PayPal or Moneybookers or bank transfer, whichever they prefer.
[Edited at 2011-01-08 16:51 GMT]
| | | | Samuel Murray
Netherlands
Local time: 19:41
Member (2006)
English to Afrikaans
+ ...
Krzysztof Kajetanowicz wrote:
Samuel Murray wrote:
Well, I have just learnt that since I now live in the Netherlands, I'm going to have to insist that Dutch agencies pay me within 30 days, because by law I have to pay my VAT over to the taxman very, very regularly (regardless of whether I have actually received the invoiced money).
In my country, if you're a "small taxpayer", you can account for VAT on a quarterly basis. Moreover, you can choose to pay your VAT for the quarter in which you actually received the money...
Yes, as soon as I get an accountant, I'll ask him all these things. AFAIK I have to pay VAT quarterly, but the VAT is payable based on the invoice date. I'm not allowed to use the cash-based system (i.e. based on the payment date, not on invoiced date) if the majority of my clients are businesses.
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