You might be wondering why a specific payment structure matters. Plenty of interpreters ask this exact same question. In reality, when you get paid might not be a huge issue but if you consider the long game of freelancing… it might be bigger than cashing a single check.
While it might also feel better to get paid earlier, in the freelance game you have to always be strategizing for the long term. Let’s say you have multiple clients you bounce between with an agency who pays monthly, your invoicing timeline might include billing on the 1st and getting paid at the end/beginning of the month with random clients in between. If you bill two agencies, one on the 1st and one on the 15th, you’re always going to have a check on a biweekly schedule like many of our W2 friends. With a NET15, you could have a check weekly with the right scheduling. But if you’re planning for a dry summer, you may prefer to push everything to a NET30 if you’re not the best budgeter.
When you consider the potential of subcontracting and how it could impact you and your bank account, the idea of a NET30 might be more pressing. If you’ve made a deal to pay a colleague within 30 days but the deal you’ve signed is a NET60, you could be in a tight situation for an entire month or more before the payment from the client clears. This is why I personally keep everything at a NET30, including the contracts I write for subcontracting with me.
I choose to bill on a NET30 every Friday with invoices leaving my inbox on Friday before noon. I do this for two reasons, Accounts Payable will always be catching up on Monday morning and if payments are going out, they’re more likely to get that check in with their weekly check run. The second reason is that it starts the clock earlier which means instead of waiting until Monday, by Monday morning the invoice is already at 3/30 days before payment. It also helps because it means I can go through all of my past due bills to clients and see who is keeping up with a NET30, who is paying on time and who is late more clearly. I’m a very visual person so keeping it on a single day helps me stay organized.
For years I would send invoices as I felt like it and I have learned that is in fact a terrible system for me. I would often have to search for old invoices I sent out when trying to follow up on payment. With everything going out on Friday, I can narrow down the dates in my inbox search which saves me a ton of time. I also learned that batching invoices on Fridays allowed me to be more organized. Every time I send out a batch, I move all of the emails into a sent invoice folder and tag it with the clients info. This means that every week I can go back and pull from the previous batch in a clearly organized file.
Offering discounts for early payment
You can actually give your clients a better deal by paying earlier. While some clients will respond to this very positively and others will completely ignore it, it’s a great trick to have in your arsenal. I personally use this strategy for clients who pay on a NET60 schedule. If it’s a large amount and I need it sooner, I’ll place a remark at the end of my payment note on the invoice that reads “NET30 less 2%.” The whole note says:
“NET60 else 25% fee per 30 days. NET30 less 2%.”
Essentially this means you must get the payment to me within 60 days. If you’re late on that payment, I’ll add 25% to the balance for every additional 30 days I’ve waited for payment. Conversely, if you pay within 30 days you’ll save 2% on the total owed. This percentage varies for me based on a number of factors but with larger clients, usually the folks I’ve gotten. deposit from, I will offer this. This is something I plan for in the initial quote. Let’s say I charge a client $4,000 for a job but given that it’s a large amount to be waiting on I add $250 to then give them 6.25% off as a discount for paying early, I haven’t really lost anything. If anything, they’re paying a fee for a longer turn around time on money that I would otherwise have from a different client.
Why choose a NET15?
You might choose a NET15 for ongoing jobs where the amount and the aren’t going to change too often. I’ve billed places like AA on a NET15 where they don’t have an Accounts Payable department, the work is stable and the amount I’m charging is really just to cover the costs of me getting to and from. I’ve also billed larger jobs on a NET15 when the amount of work that’s ongoing is going to require me to ‘front’ or use my own cash to pay a contractor more often. This typically is helpful in the first month of a three month or longer contract where you have a team of subcontractors. Agencies are often able to pay without stress because they have a large amount of clients and the cash they bring in weekly is typically much higher. If you don’t have a large savings to cover the costs of multiple interpreters working with you, you can essentially use a NET15 like a deposit with the first of many checks being due early for good faith.
Would you ever use a NET90+?
Not really. Most of what you’ll be doing in your career will revolve around a NET30. In fact, I’ve never seen one longer than 60 days but I have heard that for some very specific contracts, checks are cut to all parties involved at the end with one large PO number. I personally would probably avoid it unless it were something I really wanted to work on. If you’re contracting under a reputable business or contractor, you should be able to trust that your funds will be made available to you in a reasonable amount of time.
However you choose to bill, what’s important is that it should work for you without compromising the client’s internal processes and needs. Interpreting services that require more work and cause inconvenience for them are the first ones to be replaced by easier systems. It’s key that you’re taking a holistic view of what it means to provide services and do your best to improve them as a practitioner in this field.