We charge 50% advance upfront and balance against delivery. The reason is simple, we have had times when people don’t pay or forget to pay us for more than 365 days.
Now there are 2 ways to handle it. Either we increase rates to cover such contingencies, or we charge upfront and offer a discount. In the first case, even good paying clients suffer as they have to pay more. There are few facts we have learned over the years:
- On an average, we had to spend about 2 months every year just chasing clients for payments. We can better utilize this time and improve our language skills.
- Average wait for delayed payment is 6 months. This translates to about 5% interest on the same.
- About 5% of clients default.
- This is an online business and it becomes very hard to contact some of the people. And in some cases, long distance call is costlier than actual job amount.
So, we decided to go for the second option. The same was opted in an opinion poll of our customers. So we have lowered our prices by 10% on all translation. (This is why our rates are lower than the rest.)