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60 day post invoice payment terms
Thread poster: Karin Speedy
Sadek_A
Sadek_A  Identity Verified
Local time: 21:16
English to Arabic
+ ...
..... Mar 18, 2021

Chris S wrote:
I’m going to lose bugger-all interest.
And they’re going to earn bugger-all interest.

Very little or no interest only if the payment is low or very low, in such case all the more reason to clear it immediately.


 
Christopher Schröder
Christopher Schröder
United Kingdom
Member (2011)
Swedish to English
+ ...
Not buying it Mar 18, 2021

Giovanni Guarnieri MITI, MIL wrote:

Chris S wrote:

They shouldn’t need to wait for their client to pay first.


It helps with the cash flow... have you heard of it?


Nobody with any hint of business nous would operate on that basis. This isn’t like a manufacturer that has to build a factory first. There is no outlay and so no advantage to JIT cash flow.

Any business that doesn’t have a month’s expenses sitting in the kitty simply shouldn’t be allowed to trade.

IMnotveryHO.


Sadek_A
P.L.F. Persio
Maria Teresa Borges de Almeida
Karin Speedy
Philip Lees
Dalia Nour
 
Sadek_A
Sadek_A  Identity Verified
Local time: 21:16
English to Arabic
+ ...
..... Mar 18, 2021

Chris S wrote:
Nobody with any hint of business nous would operate on that basis. This isn’t like a manufacturer that has to build a factory first. There is no outlay and so no advantage to JIT cash flow.
Any business that doesn’t have a month’s expenses sitting in the kitty simply shouldn’t be allowed to trade.
IMnotveryHO.

All valid, although I'm concerned about the course Google is taking us on in defining kitty and HO. 😃


 
Philippe Etienne
Philippe Etienne  Identity Verified
Spain
Local time: 18:16
Member
English to French
It does matter when you're unlucky (or complacent) Mar 18, 2021

For the umpteenth time the same (real) story:
A loyal, returning agency client of mine went bankrupt out of the blue (post-9/11) with €3700 of my invoices unpaid. Their terms were 60-day "end-of-month".
Longer payment terms means higher risk. Twenty years later, I still believe I wouldn't have lost that much with shorter payment terms. I'd have noticed something wrong earlier.

By the way, the defaulting season may be looming, when governments will stop helping companie
... See more
For the umpteenth time the same (real) story:
A loyal, returning agency client of mine went bankrupt out of the blue (post-9/11) with €3700 of my invoices unpaid. Their terms were 60-day "end-of-month".
Longer payment terms means higher risk. Twenty years later, I still believe I wouldn't have lost that much with shorter payment terms. I'd have noticed something wrong earlier.

By the way, the defaulting season may be looming, when governments will stop helping companies (including clients of agencies).
Watch out for delays.

Philippe
Collapse


Tom in London
Pamela Cruz
Karin Speedy
Christopher Schröder
Peter Shortall
Dan Lucas
P.L.F. Persio
 
Giovanni Guarnieri MITI, MIL
Giovanni Guarnieri MITI, MIL  Identity Verified
United Kingdom
Local time: 17:16
Member (2004)
English to Italian
They don't... Mar 19, 2021

Chris S wrote:

Nobody with any hint of business nous would operate on that basis.


It helps with the cash flow, so they do it... just for the sake of it. Some companies are real sharks.


Dan Lucas
Christopher Schröder
P.L.F. Persio
 
Dan Lucas
Dan Lucas  Identity Verified
United Kingdom
Local time: 17:16
Member (2014)
Japanese to English
It certainly happens Mar 19, 2021

Giovanni Guarnieri MITI, MIL wrote:
Chris S wrote:
Nobody with any hint of business nous would operate on that basis.

It helps with the cash flow, so they do it... just for the sake of it.

They absolutely do. I was on the audit team for a company whose accountant was proud of the way he bolstered the firm's cash flow by paying his suppliers as slowly as he could, while encouraging his customers to pay quickly. I imagine that the skill comes in squeezing suppliers, but not to the point that they decide to just stop dealing with you. This kind of thing is commonplace. Morally dubious, but commonplace.

Dan


Christopher Schröder
P.L.F. Persio
Giovanni Guarnieri MITI, MIL
Philip Lees
 
Christopher Schröder
Christopher Schröder
United Kingdom
Member (2011)
Swedish to English
+ ...
Yeah but Mar 19, 2021

Dan Lucas wrote:

Giovanni Guarnieri MITI, MIL wrote:
Chris S wrote:
Nobody with any hint of business nous would operate on that basis.

It helps with the cash flow, so they do it... just for the sake of it.

They absolutely do. I was on the audit team for a company whose accountant was proud of the way he bolstered the firm's cash flow by paying his suppliers as slowly as he could, while encouraging his customers to pay quickly. I imagine that the skill comes in squeezing suppliers, but not to the point that they decide to just stop dealing with you. This kind of thing is commonplace. Morally dubious, but commonplace.

Dan


Oh I know. My ex used to squeeze payments out of wholesalers for a living. But what I have never understood is why businesses bother with this cash flow game.

Unless the business is on its knees, or enormous, the spoils are insignificant. You only ever gain that first month, and you piss everyone off constantly.

But back to the OP’s question, I work a bit for one of the big global agencies, and I signed terms of 60 days but always have 30 days on my invoices, and they pay at 30. Make of that what you will.


P.L.F. Persio
 
Dan Lucas
Dan Lucas  Identity Verified
United Kingdom
Local time: 17:16
Member (2014)
Japanese to English
Not a positive, is it? Mar 19, 2021

Chris S wrote:
But what I have never understood is why businesses bother with this cash flow game.

I think the crux is that if you are in - or believe yourself to be in - a line of business where goodwill is irrelevant and where suppliers are fungible, then the attraction of a larger cash cushion is hard to resist. There's no perceived downside. That seems to me a misguided approach to business, unless the purchaser really is in a precarious financial position and operating on the slimmest of margins.

I question whether goodwill is ever irrelevant in a sustainable business model. As you say, who are suppliers going to prefer when push comes to shove? Not the buyer that they have to chase every month. If it were me, I'd be trying to get one over the competition by using the best and most reliable suppliers I could, and by buttering them up whenever I could.

If I were to ever branch out into the boutique agency business - unlikely - I'd make sure the company was well-capitalised before I started. By having the wherewithal to pay decent rates a week after delivery, I'd have high-quality freelancers beating a path to my door, and that would be a lot less stress than dealing with incompetents and half-wits. But you would need the capital...

Dan


Arkadiusz Jasiński
Giovanni Guarnieri MITI, MIL
Christopher Schröder
Philip Lees
Yvonne Gallagher
Dalia Nour
Peter Bak
 
Peter Bak
Peter Bak
Denmark
Local time: 18:16
English to Danish
+ ...
Bullseye Feb 10, 2022

Ice Scream wrote:

For me as an established translator, it doesn’t really matter whether I get paid now or in six months. I don’t need the money to pay my bills and I’m going to lose bugger-all interest.

For them as an established agency, it doesn’t really matter whether they pay in 10 days or 180. They shouldn’t need to wait for their client to pay first. And they’re going to earn bugger-all interest.

So it’s just a stupid, misguided game they play.

Although it makes no difference to me financially, I feel warm fuzzy feelings towards my customer who pays the instant I send my invoice, and like Tom I am irked by any that are slow to pay.

Who am I going to do the better job for next time?
Who is going to get squeezed in when I’m busy?

Honestly, slow-paying agencies are idiots.

Couldn't have said it better.


 
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