Accumulated accounting tips for translators and freelancers
January 21st, 2010 | Published in america, europe, translation | 15 Comments
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Business Advice for Freelance Translating
Collected from the freelance translation community on twitter , via the hashtag #xl8
This post aims to collate helpful information from freelancers and translators around the world on managing money, tax, clients and cashflow. It may be of use and interest to other freelancers.
Please feel free to add any tips that may have been of use to you over the years in the comments section below or email them to contact@lukespear.co.uk.
The advice:
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Tax tips
(expenses, claims, IRS, HMRC, VAT, etc.)
UK based:
- Starting up is simple: declare to HMRC within 3 months using the self-employment form found here.
You’ll have to complete a tax form by the 31st of January every year. It’s easy to fill in online.
On this form you can claim for expenses. If you work from a rented home (flat, etc.) then you can claim for a fraction of how much of the home you use. An accountant can help with this, but 1/3 of rent is not uncommon (this does not constitute professional advice, just personal experience). Homes with mortgages are subject to Capital Gains Tax for any claims made, also the fraction is subject to a time-rated scale for usage. Definitely seek professional advice here.
VAT not essential, still awaiting more advice from the freelance community on potential benefits.
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Cashflow
(long payment terms, late payers, example payment request letters, etc.)
Payment practices
It’s best to check out any new clients you are working with to make sure they aren’t a fly-by-night agency that won’t be around to pay you the agreed amount when it comes to it. The main way to do that currently is via the proz.com Blue Board, using its useful search function. Other ways were recommended as follows:
From @Gaby_Ibanez, who describes herself as a “Translator. Subtitler.” from “Beautiful Argentina”.
“Yes, always check out the agency’s payment practices and never stop doing it, no matter how long in this business you’ve been.”
“There are several PP lists: some are free, some you have to pay to get access to them. There’s also the Blue Board on Proz. >>”
“>> And the Hall of Fame & Shame (TranslatorsCafe.com), but to have access to the last 2 you need to have a paid membership.”
Leading on from this, the ATA have released a document called “Ensuring payment”, here’s the direct link [pdf].
In this document you’ll find links to various company payment practice lists from around the world.
@pcruzp, an “EN FR SP Freelance Translator”.
“#Proz BB it’s a good start, but I trust more on Yahoo Group Lists for PPs + checking Contact Details + http://whois.domaintools.com/”
Using the whois tool enables you to compare the name of the website registrant to the person/address you are in contact with and progress in any potential research that may need carrying out.
More useful links from @Gaby_Ibanez regarding Payment Practices.
1 - WPPF: World Payment Practices Fees
2 - Translation Payments WhoWhenWhat
3 - TCR List managed by Laura Hastings; a paid service.
4 - Payment Practices managed by Ted Wozniak; a paid service.
5 - Blacklisted Translation Outsourcers a paid service.
More information is available, as pointed out by Gaby, on their respective websites.
Terms and Conditions
Including your terms of work in initial contact with new clients is effective, as practiced by Tom Ellett of Albascan Translations, with an example of his terms and conditions here, including the following clauses on:
- Copyright
- Confidentiality
- Amendments (and their costs)
- Cancellation (and its cost)
- Liability of the translator
- Payment (within 7 days, interest at 2% per month)
Also, interestingly, is the “wire transfer fees and other [payment] charges are payable by the Client.”
Included are two reminders (as logos) of the associations the translator is a member of. All clearly laid out on one A4 PDF.
There was also advice from @petergarner when asked if he used Terms and Conditions with either direct clients or agencies.
“Generally no. But occasionally I am asked to provide a formal estimate 4 big jobs, in which case I include certain pretty basic T&C.”
It is possible to speed up late payments using a letter or email. Here’s one that worked for me, but may have damaged future relations. If anyone has a more diplomatic offering to share, it’d be welcome below.
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Hi [project manager],
Thank you for checking the invoice payment status. When we spoke over the phone regarding the work you’ll remember that you assured me of a 60 day payment. Changing the payment terms without notification is unacceptable.
As a reminder, on the [date] you further confirmed a 60 day payment:
[quote previous email exchange]
Is there anything you can do to prioritise this payment? Neither of us would want this to get any more complicated than it is, and it would be better if we could keep this matter private, would it not?
Sincerely,
[name]
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Invoices
Céline of Naked Translations has offered this list of items to include on any freelance invoice. Behold:
INVOICE or QUOTE, clear and visible
Date
Your details
Client details
Client reference
Invoice number
Job description
Rate
Amount due
Payment terms
Payment details
Payment due date
“This makes it much easier to get paid on time and to chase any overdue invoice.”
Céline also suggests the use of FreeAgent. It’s an online accounting system that allows you to import bank statements for speeding up most accounting work. It also calculates taxes, graphs essential data and separates expenses from income quite simply. A 10% discounted version (normally £15 for freelancers) is available here freeagentcentral.com with my referral code, but I’m still in the free trial and haven’t made up my mind whether or not to stick with it.
I have also seen Crunch.co.uk which provides a similar service coupled with an accountancy firm to tie up loose ends and incorporate you if it becomes worth it, which they say happens around the £25k mark.
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Sales
(increasing them, growing business, cold calling, email templates, etc.)
It seems it would help with professional image to have a website. Among the examples of what appear to be clear and well designed sites are those of Tom Ellett, Céline Graciet and Percy Balemans.
Tips from the translation community on positioning include having a single or few specialisms. This helps the client better understand your offer.
Gaining new clients (the dreaded marketing!)
@pikorua
“I get most of my clients via word-of-mouth/networking and via my ProZ profile/website.”
@AngelaMDickson
“None of the active ways I’ve used to seek clients have been as effective as being easy to find and having an in-demand specialism; in other words, they find me.
I have met 2 (in 5 yrs) worthwhile clients after bidding for their jobs on proz. I only bid for interesting-looking jobs tho.”
@ultramegajoy of the Netherlands has also reached a great stage where,
“Most of my new clients come from word-of-mouth referrals or networking, occasionally ProZ direct contact.”
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Costs
(reducing them, waste, good deals on insurance, webhosting or related, etc.)
Hiscox offer insurance to freelance translators that covers £250k throughout Europe for professional indemnity at £15 a month. Most surveys and polls taken show translators don’t generally have insurance, and if they do they’ve never used it, but it’s not very expensive to add a further comfort for your clients. It may be a shrewd marketing move, if nothing else.
Cheap web hosts in the UK with great customer support, use them to *easily* register your domain and set up webhosting: layershift. Around £10 for a web address (domain name) and £4 a month for hosting.
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Links
A small list of Small Business websites:
US based
Inc.com – online version of print magazine.
CNNmoney.com Fortune & Money magazines with CNN.
Sba.gov US Government tools and resources.
Duct Tape Marketing for low cost, effective marketing strategies.
Business Week The Small Business section
All Business information and advice from a well regarded, oft-cited source.
Startup Nation “175,000 pages of award-winning advice”
UK based
Startups.co.uk is an active community with a broad range of articles.
Business Link is a UK government run site for tools and resources.
UK Business Forums is another active community with lots of real, experience based advice.
More to come, add a comment and stay tuned 
[/lang_en]
January 21st, 2010 at %I:%M %p (#)
I’ll get things started myself:
Céline of Naked Translations recommended FreeAgent to me. It’s an online accounting system that allows you to import bank statements for speeding up most accounting work. It also calculates taxes, graphs essential data and separates expenses from income quite simply. A 10% discounted version (normally £15 for freelancers) is available here freeagentcentral.com with my referral code, but I’m still in the free trial and haven’t made up my mind whether or not to stick with it.
I have also seen Crunch.co.uk which provides a similar service coupled with an accountancy firm to tie up loose ends and incorporate you if it becomes worth it, which they say happens around the £25k mark.
More tips to come. Add yours and I’ll put them all neatly in the post above as they come in.
January 21st, 2010 at %I:%M %p (#)
Good idea, Luke.
My first tip would be to have a very clear template for quotes and invoices including the following info:
INVOICE or QUOTE, clear and visible
Date
Your details
Client details
Client reference
Invoice number
Job description
Rate
Amount due
Payment terms
Payment details
Payment due date
This makes it much easier to get paid on time and to chase any overdue invoice.
January 21st, 2010 at %I:%M %p (#)
Thanks Céline – I find it hard to know what to do, I hope some collective experience will serve the community as much as myself.
And straight away, how did I miss the “Payment Due Date” all this time?
January 21st, 2010 at %I:%M %p (#)
I never used to put a payment due date on my invoices until I started using Freeagent, which has it by default on all its invoice templates. It should be obvious, shouldn’t it.
January 22nd, 2010 at %I:%M %p (#)
A small Small Business websites link list:
US Based
Inc.com – online version of print magazine.
CNNmoney.com Fortune & Money magazines with CNN.
Sba.gov US Government tools and resources.
Duct Tape Marketing for low cost, effective marketing strategies.
Business Week The Small Business section
All Business information and advice from a well regarded, oft-cited source.
Startup Nation “175,000 pages of award-winning advice”
UK Based
Startups.co.uk is an active community with a broad range of articles.
Business Link is a UK government run site for tools and resources.
UK Business Forums is another active community with lots of real, experience based advice.
January 22nd, 2010 at %I:%M %p (#)
And here, an example of a reminder email to a late-paying client:
————————-
Hi [project manager],
Thank you for checking the invoice payment status. When we spoke over the phone regarding the work you’ll remember that you assured me of a 60 day payment. Changing the payment terms without notification is unacceptable.
As a reminder, on the [date] you further confirmed a 60 day payment:
[quote previous email exchange]
Is there anything you can do to prioritise this payment? Neither of us would want this to get any more complicated than it is, and it would be better if we could keep this matter private, would it not?
Sincerely,
[name]
————————-
This email did have the desired effect, causing the payment to be made almost immediately, however the tone is regrettable. Of course the economic downturn has been blamed here, but sympathy for those abusing the situation to delay payments by a further 30 days without notification runs low with this freelancer.
If anyone has a more effective, or perhaps more formal reminder notice, it’d be welcome here – but please censor names and client references.
January 22nd, 2010 at %I:%M %p (#)
From @Gaby_Ibanez, who describes herself as a “Translator. Subtitler.” from “Beautiful Argentina”.
“Yes, always check out the agency’s payment practices and never stop doing it, no matter how long in this business you’ve been.”
“There are several PP lists: some are free, some you have to pay to get access to them. There’s also the Blue Board on Proz. >>”
“>> And the Hall of Fame & Shame (TranslatorsCafe.com), but to have access to the last 2 you need to have a paid membership.”
Leading on from this, the ATA have released a document called “Ensuring payment”, here’s the direct link [pdf].
In this document you’ll find links to various company payment practice lists from around the world.
January 22nd, 2010 at %I:%M %p (#)
Another tip on payment practices, this time from @pcruzp, an “EN FR SP Freelance Translator”.
“#Proz BB it’s a good start, but I trust more on Yahoo Group Lists for PPs + checking Contact Details + http://whois.domaintools.com/”
Using the whois tool enables you to compare the name of the website registrant to the person/address you are in contact with and progress in any potential research that may need carrying out.
I myself have been stung by an agency set up in Finland through a website, with a professional image but sadly an unprofessional owner who closed operations and never paid at least 3 translators. First time it happened, I surprised myself at my lack of research – take care.
January 25th, 2010 at %I:%M %p (#)
More useful links from @Gaby_Ibanez regarding Payment Practices.
1 – WPPF: World Payment Practices Fees
2 – Translation Payments WhoWhenWhat
3 – TCR List managed by Laura Hastings; a paid service.
4 – Payment Practices managed by Ted Wozniak; a paid service.
5 – Blacklisted Translation Outsourcers a paid service.
More information is available, as pointed out by Gaby, on their respective websites.
January 25th, 2010 at %I:%M %p (#)
Advice from @petergarner when asked if he used Terms and Conditions with either direct clients or agencies.
“Generally no. But occasionally I am asked to provide a formal estimate 4 big jobs, in which case I include certain pretty basic T&C.”
Once trust has been established, and reputations checked, an informal agreement seems to suffice. This is how I have been working for the past few years also.
January 26th, 2010 at %I:%M %p (#)
Publicly available terms and conditions pointed to by @tomellett at this address:
http://www.albascan.com/info/Albascan_Terms_Nov_2009.pdf [pdf]
Including clauses on:
- Copyright
- Confidentiality
- Amendments (and their costs)
- Cancellation (and its cost)
- Liability of the translator
- Payment (within 7 days, interest at 2% per month)
Also, interestingly, is the “wire transfer fees and other [payment] charges are payable by the Client.”
Included are two reminders (as logos) of the associations the translator is a member of. All clearly laid out on one A4 PDF.
January 26th, 2010 at %I:%M %p (#)
How to gain new clients? @ultramegajoy of the Netherlands has reached a great stage where,
“Most of my new clients come from word-of-mouth referrals or networking, occasionally ProZ direct contact.”
I then asked how Joy obtained the first clients who referred her on. I’ll post any further advice here.
January 26th, 2010 at %I:%M %p (#)
@pikorua
“I get most of my clients via word-of-mouth/networking and via my ProZ profile/website.”
@AngelaMDickson
“None of the active ways I’ve used to seek clients have been as effective as being easy to find and having an in-demand specialism; in other words, they find me.
I have met 2 (in 5 yrs) worthwhile clients after bidding for their jobs on proz. I only bid for interesting-looking jobs tho.”
January 26th, 2010 at %I:%M %p (#)
Great post, looking forward to reading more as it gets updated. I was going to mention Hiscox but was too late – they’re by far the most economical liability insurance I’ve found, and very helpful too.
My main direct client was found by chance by a friend on a job board for broadcast journalists. So my main tip – not that this is born of much experience – would probably be to keep your eyes open. You never know where a promising direct client might appear from.
January 26th, 2010 at %I:%M %p (#)
Many thanks, Vikki. I’m glad to hear that I’m not the only one who went in with Hiscox. My main client (I know, I should spread the risk by having a few!) was also found by chance, but on a web forum, a year after my post. So keeping your eyes open, putting out your message and being prepared for the right opportunity, all that kind of thing must increase our chances of growing our respective client-bases.
How to get new clients, further responses:
@im_translators
“I am experimenting with direct mail postcards at the moment, will let you know how it goes.”
@NTceline
“Having a well-indexed website, without any hesitation.”
@petergarner
“I’m not sure I’ve ever sought out a new client. They always find me. And it’s always wd of mouth. Don’t even have a website.”
@ultramegajoy
“When I started freelancing fulltime, I already had several years of translation experience, including a year on staff at an agency. The market was great at the time, so well-prepared cold calling actually worked. I researched all the translation agencies that handled the kind of work I wanted & sent out 20-30 CVs a week by email, with a follow-up phone call a week or two later.
I had a 15-20% response rate, which is much higher than I’d expect now. I also used a spreadsheet to streamline & track the process. In the long run (1-2 years?) I had 8 daily to weekly customers & about 20 others that used my services occasionally.”
@KaterinaAtKaterinaAt
“Through the years I’ve also established good coop. with new agencies through moving PMs who wanted to continue working with me.”