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Translation and interpreting payment practices: Part IV – collection |
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Tuesday, 19 October 2010 07:38 |
 For translator or interpreter dealing with a client who is not paying is always frustrating and almost always leads to the loss of an account. Businesses exist with only one goal - make money. If your business is not making money, it will not survive for long. Collection efforts should only be considered when all other means are exhausted. It's always good to have an expert, who can advise you on complex issues such as this. We teamed up with Pamela R. Putnam a managing partner of the law firm, Putnam & Hartmann LLC. Click below to read her input on the subject and our comments.
Putnam & Hartmann LLC is specializing in debt collection, bankruptcy, estate planning and real estate.
Before we begin, there are two issues we would like to address. In many organizations people who deal with translators and interpreters are not the same people who pay the bills. Very few businesses "don't want to pay" your invoice and those who do, usually don't last long. Collecting on your invoices is time consuming and you need to budget that time.
PP: As a business owner, you should have a clear policy & procedure in place to keep the billing process running smoothly and to assure you do not let any missed payments go unnoticed. You should take action immediately after you realize an invoice has not been paid. The rule of thumb in collections is that the longer the account goes unpaid, the more difficult it is to collect. You have reached a critical stage if you have an account that has gone without payment for more than 120 days.
In other words you must have robust (computerized) system to track all of your invoices. Monthly or bi-weekly reviews should help you to catch invoices that are getting into the past due territory.
Working locally and executing your business with accuracy and precision pays off in an interesting way - PP: The chances of collection increase when the individual or entity is in the same state, billing is timely; the top executive signs the contract or order; documentation is clear; and work or product has been delivered as promised. Pamela also recommends that all of the preceding conditions should be examined before entering into a new contract.
We asked Pamela if any "pre-existing" conditions would possibly prevent you from collecting a payment.
PP:Conversely, you can see that the red flags of uncollectable debt are:
- Out-of-state individual or entity. The costs go up for out-of-state service. Make sure the contract provides for jurisdiction and venue locally.
- Long overdue account. Again, take immediate action on past due accounts.
- An unauthorized subordinate signed the contract.
- There is no written contract.
- The contract is with an entity that is not a corporation or LLC. Key words "Inc.", "LLC", "Co.", and "Company" should be at the end of the debtor's name.
- Debtor is not willing to personally guarantee the contract.
If you are skillful with legal lingo and have time on your hands, you can start the procedures on your own. Alternatively, you may consider the following recommendations.
PP: If you have a claim that has been past due for 30 days or more, you may want to contact an attorney. Our firm begins a collections case with a "demand letter." In this letter, we advise the debtor that you have retained our firm to assist in collecting their debt. The letter suggests that if we do not hear from them in 10 days, we will proceed with a lawsuit. There is no guarantee that the debtor will respond, but these letters tend to be successful. Most debtors want to avoid litigation and will attempt to settle the debt after receiving a letter from a law firm.
If you are lucky it may be your only headache. However, if there is no response, you will have to proceed with the case. PP: If the amount of your claim is small, you have the option of filing your own lawsuit in small claims court. The filing fee is less in these cases, and it is not necessary to have an attorney. Many courts provide forms you can use to file your claim. What you need to know is that each state regulates the amount of your small claim. Two boarding states may have completely different rules. PP: In Kansas, your claim must be less than $4,000, and in Missouri, it must be less than $3,000.
And that brings us to our last rule. If you are a translator or an interpreter and you work as a freelance contractor, your past due invoices for any given account should not exceed the amount, allowed in the small claims court of your state. Get on the Internet and on your county's court house web site find what is the maximum amount for the small claims.
If all of this sounds overwhelming or the past due total amount is high, you may consider to use the services of a professional attorney. Don't go to collection agencies. Find small law firm and build relationships that may last as long as you are in business. PP: You can file a lawsuit pro se or unrepresented, but we highly recommend that you hire an attorney to assist you. Attorneys fees will vary from firm to firm and may be reimbursed by the debtor as part of the judgment.
With that we will close our series. We would like to thank Pamela Putnam for her input. You can visit her law firm on the web or use their contact information below.
Putnam & Hartmann, LLC
4310 Madison Ave.,
Kansas City, MO 64111
Phone: (816) 268-1017
E-mail:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: at www.phlawkc.com
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