Chasing invoice payment from abroad

The Cool

Not sure if this is the best place for this thread but mods, feel free to move. I'm a freelancer, self-employed translator so usual procedure is - I do jobs for clients throughout the month, and then at the end of the month I send out an invoice to each client. That invoice is usually payable in 30 days, unless the particular company has different procedures. Anyhow: I've been having crappy dealings with a client based in Spain and looking for advice on how to press them to pay invoices that are ridiculously overdue.

I was doing documents for them during April and May of this year. Invoiced at end of April for €948 which was due then end of June, and at the end of May for €1077 which was due at the end of July. At the middle of July there was no sign of the first one being paid so I started sending a couple of emails to check in and remind them; by the end of July they now owed me just over 2 grand so I sent more emails. In the middle of August the project manager replied to me and said that the boss was off on leave and would speak to me when she came back, the following week. I checked in again the following Monday, only to be told the same thing again - this happened a few times. The PM told me that there had been issues with my work and the boss wanted to talk to me herself.

I spent another month hounding them with an email or two a week and eventually, on September 29 the boss wrote to me saying that the quality of my work had been poor; they'd had to send it off to be reviewed and pay for that; she proposed paying only 50% of the total amount on the invoices, to make up for the cost of getting my work redone; and would I let her know what I thought.

Now I was a bit gutted about this; it wasn't difficult text so I was surprised that I'd gotten such a big complaint about it, BUT, I also thought it was possible that she was just ripping me off - I know myself from working for a man in her position, that some people will take advantage of not wanting to pay a big invoice when they're in a different country - it's not like I could rock up to her door in Murcia and demand she pays me! Writing off 1,000€ of work is no small thing. So I wrote back and said
(a) I can't just write off 50% of two month's work - can you meet me in the middle?
(b) can you please send me the work that you've said you've had corrected, so I can suss it out, see for myself if my work was poor and if so, learn from my mistakes.

This is where I have a problem now - because she has not replied to me at all since. It's been 7 weeks, I today sent her my 13th email since her last one. So far my emails have said, hello can we sort these invoices please, but today I wrote a more elaborate one saying how unreasonable they've been and that if they keep ignoring me I will start legal proceedings. Of course, I got no reply to that either. Because she is in Spain, I don't know what I can do about it; and while my Spanish is grand for writing emails, I don't have the confidence in it to ring them up and bollock them out of it.

Sorry, this is an awful long post and I don't know if any of you guys will know anything about it, but I am at my wits' end. I'm still in my first year of doing this, and absolutely broke so I'm not in a position to be writing 2,000 quid off as a bad debt! Any help greatly appreciated.

GG66

Sorry to hear about your woes, sounds like a terrible situation. While I don't have any experience collecting debts from Spain I do have the unfortunate experience of having to collect them in Ireland some time ago.

Straight up, they don't want to pay you and they are ignoring your correspondence so move to the next step and that's getting a professional involved.

Some businesses won't pay until they receive a solicitors letter, that's how they operate. There are firms who specialise in debt recovery, some on a "no win no fee" basis

Google: Pre Legal debt collection https://www.google.ie/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=pre+legal+debt+collection

or Pre Legal debt collection Spain
https://www.google.ie/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=pre+legal+debt+collection+spain

and see what you come up with, call a few of them and get advice.

This can really drag out and you may have to settle for less than you're owed to get paid. Try your best to move on and focus on getting new paying work, write this off in your head and treat it as a bonus if it comes through. That's the resolution I came to after months of dealing with similar.

Good luck & let us know how you get on

Kristopherus

Don't Ryanair fly to Murcia? I'd be arranging to meet the debt collectors at the airport and going straight to the customer to get my shekels - all of them

Joe Doe

- Check their credit status, usually a free service (uk/ire anyway). Chances are they're on the rocks, thus seeking diversions.
- Offer 25% credit note if cleared within 7 days bacs/chaps etc, else^
- ^ Call in large pressure focused factoring agency, they'll charge min 15% but put the jeepers on them. Even a quick d-i-y LBA notice will do the trick.
- Presuming your work is as should be and they're at fault, you can go all the way to a court order for them to completely cease trade (closed shop effectively).

In future stipulate on the pre-contract that any queries with work supplied must be notified to you within 3 w/days of delivery.

Had a close shave years ago waiting 90+days for £4k worth of freelance work, needless to say once they started getting the big yellow and red final warning & pre-action letters in the post, they quickly offered to pay up 75%. They closed down soon after (had their own client payment issues), all the other x20 freelancers didn't get paid and even the recruitment/placement agency (also unpaid) phoned me up for cc' advice. Can be a viscous circle sometimes, but thats biz.

Mr. Loverman

Firstly, stop e-mailing them and start ringing them. E-mail is too passive and easily ignored.

Forget the legal route, it'll cost you more to get the money.

I recently had a customer who wouldn't pay me around 15k. I rang them every day for updates. It took three months but I got it all.

notmymark

Have had a similar situation myself in the past and chasing money owed internationally can be very complex, stressful and time consuming. Remember that Spanish law will be different from Irish law regarding debt collection. In general you have the following options:

1) Continue communicating yourself but step up the intensity. Start calling them or continue with your threat of legal action in Spain. Also consider flying out their yourself as it is much harder to fob someone off face-to-face.

2) Get a Spanish debt collection agency or similar invloved. Debth collectors will normally work off a percentqge of the amount recovered and will probably also want expenses. There are also a number of UK expats living in Spain that offer services to help people relocating, buying property, setting up businesses, etc. in Spain. They could be a good source of affordable advice and could put pressure on the company from the Spanish front.

3) Go the legal route and contact a Spanish law firm. At very least they can look at the terms and offer advice. Best case is a letter from the law firm will sort things out worst case it could cost you significantly more than the amount owed and take a long time.

On a side note, and I'm not having a go at you, but was the work up to standard? Have you had anyone check it? Looking at the tone of your replies to them and the fact that you are not able to have a telephone conversation with them in Spanish (I'm assuming it was a Spanish - English translation) there is a good possibility it wasn't. Depending on the background and how the agreement / contract was done it could become more complex then simply some money owed.

Finally, if you are going to continue communicating yourself I would be firm in telling them to keep the communication channels open (for your peace of mind - I know from experience the worst part is the lack of reply). It is also worth saying that any issues with the translation should have been addressed with you before getting someone else to do it. Keep comunications specific and professional.

Mrs OBumble

Moved from Work and Jobs

pedronomix

Did you get credit references for the client before granting them credit? have you done business with them in the past? Or did you just wing it?

dbran

Hi The Cool

Unfortunately I do not think that there is an easy way for you to get paid.

You will easily see €2000 go by if you go the legal route in Span, and as for flying to Spain to confront them...well I just had to smile when I read that.

When you are in business you need to be smart and wise up to the fact that for some people it is in their culture to not pay for things. They view it as a good business model. Once they have got all that they they need from you they know that they can get away with not paying by stonewalling and ignoring you. They know that you will have to expend more time and funds to proceed against them.

If you are providing a service, there is no reason for them to require credit. They are not selling it on to anybody else and waiting for payment. It is simply an excuse to delay payment or to not pay you at all if they can get away with it. So if they are expecting credit then alarm bells should be ringing, especially if they are overseas as there is no effective way for you to secure payment. If you do decide to give credit then you need to pull the plug as soon as the money stops flowing. Build into your method of business an approach that means always have some kind of hold over the customer. It is never too soon to ask to be paid, but it can be too late and unfortunately this is the case here.

Put it down to experience and look to see how you can stop being stung like this ever again.

Dbran

Joe Doe

Agree with the above, nearly every company will try to wait up to 90 days to pay, they're likely also waiting for payments and so on goes the circle.

You can still recover most funds if they don't close down or 'do a phoenix' (either use an EU based factoring co, or just direct mail lba's can work). Do not even think of flying over for a visit, you're not chasing an absent roof tiler or anything like that. The pen is always mightier than the sword in the world of business.

You did get a signed contract before commencement I presume?

pedroeibar1

Info/questions from No 8 down posts are good. No disrespect intended but some of the info in the earlier posts is rubbish because posters have ignored asking a basic question.

Firstly you have not said what the client is i.e. there are a half dozen types of ‘business’ category in Spain and the action to take will depend on the commercial/legal status of your customer. SA? SL? SRL? SC? CB?

Secondly, how long has the debtor been in business and what sector are they in? Your decision on future action will depend on this.

Thirdly, your lack of knowledge of Spanish debt collection procedures (or indeed basic debt collection rules) is a weakness and already has had an impact on the outcome. The success ratio on debts overdue by more than 6 months is lower and diminishes further over time. Get yourself up to speed on doing business in Spain, duration of credit terms. Etc. You have weakened your position by agreeing to negotiate a reduction too soon.

However, you have a big advantage over others in that you speak the language.

You are in what is technically known as “Dispute” and before anything can progress that must be resolved. No collection company would go beyond stage one without getting that dispute out of the way. Even if you issue proceedings the first word of the defense will be ‘Product was not fit for purpose’ and you will be thrown out unless you are there to argue the case.

What you need to do is prepare your position to assess how to proceed, either down a legal route or to accept a write-off. Write to the customer stating that (a) you are very disappointed that they have not yet paid and only now say they are unhappy with your work, (b) that you cannot understand why this was not pointed out earlier (c) if they were unhappy why did they send you more work? Tell them that from a customer-care perspective you would like to resolve matters and you would be willing to review the work and if they used another translator to send you a copy of some of that work. Finish by saying that you want to finalise this and expect to hear from them within 14 days, otherwise you will be forced to take further actions with your trade association and others to protect your commercial interests. If they do not respond write giving them 7 days to pay after which you will pass the account to your credit insurer to collect. (Atradius, Euler & Coface all have big operations in Spain and a letter from one of them might provoke payment as non-payment would screw up their credit record.)

If that does not work be prepared to drop it. You need to play poker with the debtor, bluff, a grand or so is not worth suing for in a foreign jurisdiction.

The Cool

Hi guys,
Some great input here, thanks. To respond to a few questions/ponderings

@notmymark - To be clear, I haven't shared the tone of my emails, only summarised them to shorten my OP. I am able to hold conversations in Spanish, but I am not a native speaker, and I don't want to call them up, not understand something they say on the phone, and come across as unprofessional which would not help me (what's more, it's the thick southern Spain dialect, which is a bit like a non-English speaker speaking to someone with a thick Donegal accent). Regardless: if they were to come back to me with corrections to my work, I would be more than happy to clear up the issue and negotiate a resolution to the matter, although their ignoring my request to do so belittles that claim, I think. Anyway, the point is - they won't even respond to me.

@dbran As for providing them credit - I guess you mean the usual 30 day period for payment of invoice. That's the way it is in the translation industry, if I were to demand payment upfront for each job I would simply get no work.

@JoeDoe what's "doing a phoenix"?

@pedroiebar1 I don't know what kind of company it is. It's not on their website or their email sig.

More generally: I would agree that going through big legal procedures is not really an option. You're talking all the usual fees, plus translation costs to get stuff translated into Spanish. I don't have any spare cash to putting into upfront fees, I am essentially a startup. Plus whatever I got back off them, I'd probably end up paying back to the legal people anyway.
So does that mean there's sweet F-A I can do?

notmymark

dbran wrote: »

as for flying to Spain to confront them...well I just had to smile when I read that.

Joe Doe wrote: »

Do not even think of flying over for a visit, you're not chasing an absent roof tiler or anything like that. The pen is always mightier than the sword in the world of business.

Can I ask why dbran? I was not talking about turning up on their doorstep unannounced but rather arranging a face to face meeting with them where you can address their issues in person and get it all sorted in one go. These things can drag on especially if the company are slow to respond.

I had a similar situation in Italy recently. Legal proceedings and debt collection just wasn't financially viable. I arranged a face-to-face meeting with them where I was able to address the issue and arrange a payment plan. Flew over and back in the same day and they even got me lunch. I also managed to do some other networking while over there. Total cost of the trip was under 200 euro, I got all money owed, saved a business relationship and met some new clients.

Although the company in question is not being very professional by not dealing with the outstanding money, it does not mean they are trying to cheat you out of your money and you have to either go legal or put it down to experience.

notmymark

pedroeibar1 wrote: »

Info/questions from No 8 down posts are good. No disrespect intended but some of the info in the earlier posts is rubbish because posters have ignored asking a basic question.

Firstly you have not said what the client is i.e. there are a half dozen types of ‘business’ category in Spain and the action to take will depend on the commercial/legal status of your customer. SA? SL? SRL? SC? CB?

Secondly, how long has the debtor been in business and what sector are they in? Your decision on future action will depend on this.

Can I ask what is this "basic question"? I still stand by what I said and it is coming from dealing with situations similar to the OPs.

I don't think it is relevant for the OP to be going into what type of company, organisation, etc. he/she is dealing with. Their status is only relevant for legal proceedings in which case a Spanish lawyer will know.

Also how does the debtor business sector affect how the OP proceeds?

pedroeibar1 wrote: »

What you need to do is prepare your position to assess how to proceed, either down a legal route or to accept a write-off. Write to the customer stating that (a) you are very disappointed that they have not yet paid and only now say they are unhappy with your work, (b) that you cannot understand why this was not pointed out earlier (c) if they were unhappy why did they send you more work? Tell them that from a customer-care perspective you would like to resolve matters and you would be willing to review the work and if they used another translator to send you a copy of some of that work. Finish by saying that you want to finalise this and expect to hear from them within 14 days, otherwise you will be forced to take further actions with your trade association and others to protect your commercial interests. If they do not respond write giving them 7 days to pay after which you will pass the account to your credit insurer to collect. (Atradius, Euler & Coface all have big operations in Spain and a letter from one of them might provoke payment as non-payment would screw up their credit record.)

If that does not work be prepared to drop it. You need to play poker with the debtor, bluff, a grand or so is not worth suing for in a foreign jurisdiction.

+1 on all this. But I also want to reiterate that there is a middle ground still available. The OP hasn't even spoken to the company by phone or in person. Right now he/she is just a faceless person to this company. For €2000 I would be trying to call them or arrange a face-to-face before even thinking about anything legal or dropping it.

pedroeibar1

If you don't know with whom you are dealing, and have no Ts& Cs, stop work and learn about credit control before you go back to translating anything. 99% of defaulters will use lack of understanding as an excuse. Even in Ireland!

pedroeibar1

notmymark wrote: »

Can I ask what is this "basic question"? I still stand by what I said and it is coming from dealing with situations similar to the OPs.

I don't think it is relevant for the OP to be going into what type of company, organisation, etc. he/she is dealing with. Their status is only relevant for legal proceedings in which case a Spanish lawyer will know.

Also how does the debtor business sector affect how the OP proceeds?


+1 on all this. But I also want to reiterate that there is a middle ground still available. The OP hasn't even spoken to the company by phone or in person. Right now he/she is just a faceless person to this company. For €2000 I would be trying to call them or arrange a face-to-face before even thinking about anything legal or dropping it.

I'm not getting into a competition about this, but how you handle debt collection in any jurisdiction depends on the type of debtor because that governs the approach that needs to be taken.
Different business sectors and duration in business are indicators of 'success probability'.
It is long past middle ground, and suggesting that a face to face might help without knowing basic info is, frankly, bad advice.
End of.

notmymark

The Cool wrote: »

@notmymark - To be clear, I haven't shared the tone of my emails, only summarised them to shorten my OP. I am able to hold conversations in Spanish, but I am not a native speaker, and I don't want to call them up, not understand something they say on the phone, and come across as unprofessional which would not help me (what's more, it's the thick southern Spain dialect, which is a bit like a non-English speaker speaking to someone with a thick Donegal accent). Regardless: if they were to come back to me with corrections to my work, I would be more than happy to clear up the issue and negotiate a resolution to the matter, although their ignoring my request to do so belittles that claim, I think. Anyway, the point is - they won't even respond to me.

...

More generally: I would agree that going through big legal procedures is not really an option. You're talking all the usual fees, plus translation costs to get stuff translated into Spanish. I don't have any spare cash to putting into upfront fees, I am essentially a startup. Plus whatever I got back off them, I'd probably end up paying back to the legal people anyway.
So does that mean there's sweet F-A I can do?

OP I really think you need to speak to them (either by phone or person). If they do have an issue with your work then as it is a translation then it should be easy for them to show you. Once you have an idea of what their problems are you will be better informed to make a decision on how to proceed.

If you are uncomfortable calling them then then get someone to do so on your behalf. You need a voice following up on your emails.

notmymark

pedroeibar1 wrote: »

I'm not getting into a competition about this, but how you handle debt collection in any jurisdiction depends on the type of debtor because that governs the approach that needs to be taken.
Different business sectors and duration in business are indicators of 'success probability'.
It is long past middle ground, and suggesting that a face to face might help without knowing basic info is, frankly, bad advice.
End of.

In a case where a small amount of work is disputed, it is not financially viable to do anything legal (debt collectors or lawyers could charge more just to read the T&C than would be recovered in this case) and where all communication have been via emails, a personal touch can go a long way. Keep in mind that they have already offered to pay some of the money. Not all disputes can only be handled via an army of lawyers and legal paper work. Self employed and small companies often have to resolve issues themselves.

I am just giving the OP my personal experience. As the OP has already said the legal route is not a good option, I would try and resolve the issues and chase money owed to me any day before taking it as a write-off. There is very little the OP has to loose but quite a lot to gain.

Anyway I have made my point. pedroeibar1 I am sure we can at very least agree to disagree

OP, best of luck getting the money.