Common payment terms for translation projects

Common payment terms for translation projects

Over the years, I’ve noticed that different clients adopt different payment terms.  From our point of view, all methods are fine, but we’ve noticed that some methods are better than others for different clients and their situations.  We would like to share what we’ve learned in case it helps make running your organization easier. Below are the most common payment terms for translation projects:

  • Prepay
  • Retainer
  • Partial invoicing
  • Batch invoicing
  • Split invoices along purchase orders

One option that not listed is the standard process – invoice per project at the end of each project.  Each of the payment terms above is meant to address situations where the standard payment terms are not ideal.  

Prepay

Prepayments are useful for the payment of one large project with an inconvenient deadline.  For example, we had a non-profit association client request an eLearning project, which was expected to take months.  However, the fiscal year was scheduled to end part way through the project. Any money not spent by that date would not be available to pay for the project, so the client paid for the entire project in advance. 

Retainer

One recent client was unable to scope the number or size of projects in the coming months.  Moreover, they knew that once translation services were needed, they would need approval from their own client as soon as possible in order to meet their own internal deadlines.  The perfect solution was getting pre-approval for a fixed amount of money – the retainer amount. By using a retainer, the client was able to streamline their approval process, internal workflows and meet their deadlines.  We agreed to submit proposals anyway so that they could track their consumption.  

Another example where a retainer was useful was in addressing inconvenient deadlines.  A non-profit association client of ours needed translations for an upcoming international conference.  Their goal was to boost membership numbers prior to the end of the year. Since translations was not part of their original annual budget, they used a finite amount of reserves that was meant “for any translation needs” that arise until the end of their fiscal year.  

Partial invoicing

Partial invoicing is very similar to the standard approach of invoicing projects when complete.  The difference is that the project is not complete, so the client is receiving an invoice for the part of the project that has been completed.  The best example I can think of is an ongoing project we have is with a large pharmaceutical company. 30-60 files are received per day for translation project.  The files are received throughout the day, with each file having a varying deadline (the full case study is here if you’re interested [link to ADD case study]). We invoice monthly whatever work was done the previous month.

Batch invoicing

One of our clients is a very large law firm.  They send a similar amount of volume each day.  Each request is for a different case or client, but to avoid excessive payment admin overhead on both sides, invoices are only delivered once a week to the Accounts Payable (AP) department, itemizing different requests, case numbers, points of contact and call center codes.  

Split invoices 

There are times when clients have different departments that want to collaborate on a translation project.  One example that comes to mind is a hospital network that needed marketing material translated across their network.  The hospital network had a centralized language service department, but the requester specifically wanted the payment of these translations to be covered by a combination of departments.  In order to accommodate, we had to split invoices into different invoice numbers with one each listing a different Purchase Order number.  

Summary

Due to project deadlines, other deadlines, budget holder involvement and the general complexity of some translation projects, payment terms might need to be adjusted to meet everyone’s needs.  I reviewed the options listed above and summarized them in a table outlining what worked best in which situations:

Projects Schedule conflict Multiple budget holders
One Prepay Split invoicing
Multiple (or one extremely long project) Rolling invoices Batch invoicing
Unknown Retainer (multiple payment term options)

The important thing to know is that you have options. If you have even more invoicing ideas, send them our way. We’d love to hear them!

If you’d like to learn more about how BURG Translations helps you ensure high-quality translations, contact us today.