Around 8000 entities operate in this sector actively. Among all of them, only around 80 conduct economic activity in the form of commercial partnership or company, which means that they are registered in National Court Registry (Krajowy Rejestr Sądowy). Over 90% of all companies in translation industry are sole proprietorships or civil partnerships.
Translation market is organized in a two-tier form.
Its “foundation” consists of freelancer translators and interpreters, who provide translation services. Translators rarely have the comfort of working directly with the end client and most of their commission comes from translation agencies. So, the usual path of the majority of translation orders is the following: client > translating agency > translator.
Commissions of sworn translations are an exception, as they come to translators directly from courts, prosecutor’s offices and the police. Translators working in rare languages do not complain about lack of clients either.
The upper tier is made out of the translation agencies.
But what a translation agency actually is?
It is a business that sells other entities’ translartion services. Its key activities include marketing, sales, taking part in tenders looking for translators and organizing their work. Translation agency usually does not employ full-time translators but cooperates with freelancers. Translation agency’s earning is the marge, that is the difference between the price paid by the client and the rate paid to the translator.
The bigger the difference, the bigger the agency’s earning.
However, Polish translation agencies are usually small, with weak financial background. Often, their working capital consists of internal funds of owners or bank credit. With such an unfavourable balance structure, agencies have limited credit rating, and they suffer from permanent lack of monies. A lot of them does not have adequate financial resources, yet they take part in big tenders and projects that require months of financing.
Being deprived of a proper financial background, agencies take up even the largest commissions. In practice, they delegate performing this service to translators, paying them for their work only once they receive payment from the client.
The period between order realization and the client making a payment within sizable contracts is usually between 30 to 60 days.
The situation seems to be even worse than in the construction industry, because in the latter, contractors are under special protection. Awareness needs to be raised, that delays in payment for translator’s work can reach even 90 and 120 days.
Therefore, professional translators need to be prepared for securing 2-3 months’ worth of financial buffer in order to be able to pay social insurance and taxes.
Agencies which are themselves in debt with translators worked out a set of rather peculiar methods and argumentation to delay or avoid payments:
- Conditional payment. Agency pays the translator provided that it receives a payment from the client first.
- Superficial procedures and schemes of payments. Agency pays in 30 days counted from the month succeeding the month in which the client accepted the translation.
- Pyramid payment scheme. Agency pays for minor invoices and keeps delaying payment for the biggest ones. 80% of the invoices are paid, satisfying only 20% of the total amount of liabilities.
- Multistage acceptance mechanisms. Payment is ready to be actioned, but it awaits owner’s acceptance, who is absent, and it is unknown when he might be available.
- Avoiding contact with translator. For the purpose of ordering translations, agencies delegate people who have no competencies in the matter of settling invoices with translators. People responsible for payments are unavailable to translators.
- Lack of an invoice. Along with the translation, the translator sends an invoice, which often can “get lost”. Sending this invoice one more time results in the agency counting the payment date anew.
- Forcing the translator to delay invoice issuance. Agency accepts 14-day payment time, under one condition, that the translator will issue an invoice in 30-60 days starting from the date of providing service.
Some of the arguments used by agencies are rather funny, but also simply unprofessional: “The lady, who makes transfers comes to the office only on Fridays”, “We do not accept invoices sent by e-mail, please send it by traditional post”.
Tadeusz Broś from EULEO, confirms that translators are gradually losing their patience and refer recovery of their funds to professional debt collectors. Refusing to accept commissions from untrustworthy agencies, or the ones that do not have sufficient financial background is more and more common. Such is also the method of publishing agencies’ debts on debt exchange platforms, e.g. www.niezaplacone.info, together with charging and claiming interests and, so called, compensation (40 EUR) on the basis of Payment in Sales Agreement Act.
According to translators’ opinion, translation agencies’ work is as if doomed to marginalization. Favouring pathological, non-collaborative methods of cooperation with translators results in loss of the trust towards agencies. Although, it would be unfair to say that such a situation applies to all of the agencies. Nevertheless, one can risk a thesis, that 40% of translation agencies use their position on the market and live “at translators’ expense”.
As per Tadeusz Broś’s opinion, translation industry has huge growth potential of payment morality, because it cannot get any worse.
Consolidation of agency business, following the rules of business ethics, excluding nonsolid companies, end users’ rising awareness – this is the cure-all for low payment morality.