Ridiculous invoicing terms

[ShortStraw]

I've just had an agency trying to pull a fast one with me. I noticed in the contract:

"We expect invoices weekly with a signed timesheet from the client. All invoices will be paid 30 days after the end of the month in which they were received"

So what they are saying is that if I put in an invoice on the 1st January, I will get it paid on the 2nd March (by BACS, so it would be even later).

The consultant wasn't much help so in the end I spoke to the financial director, who gave the classic "but it's always been like that, that's how everyone is paid".

I told him no way was I waiting until the 30th August to receive payment for work done this week (or the start of September if you wait for the funds to clear). It's just not worth exposing yourself to that level of risk in the current climate.

A bit of posturing, an "I'll get back you" response and suddenly I'm on a nice 14 day payment cycle from receipt of invoice.

Don't be afraid to stand up for yourself people.

[Pistachio]

I don't blame you. Whilst you wouldn't blink at those terms if they were for a monthly invoice cycle, doing it like that is just insane for weekly invoicing.

I presume they just want to limit the amount of work they do? No other excuse for it.

[JeffreyC]

I've noticed more and more agencies stretching out their payment terms. I presume that it has something to do with them picking up more bad debts.

It's annoying, because one of their main functions (apart from recruiting) is to bridge the gap between the client and you and factor the invoices.

[Bel]

Originally Posted by ShortStraw

I've just had an agency trying to pull a fast one with me. I noticed in the contract:

"We expect invoices weekly with a signed timesheet from the client. All invoices will be paid 30 days after the end of the month in which they were received"

So what they are saying is that if I put in an invoice on the 1st January, I will get it paid on the 2nd March (by BACS, so it would be even later).

The consultant wasn't much help so in the end I spoke to the financial director, who gave the classic "but it's always been like that, that's how everyone is paid".

I told him no way was I waiting until the 30th August to receive payment for work done this week (or the start of September if you wait for the funds to clear). It's just not worth exposing yourself to that level of risk in the current climate.

A bit of posturing, an "I'll get back you" response and suddenly I'm on a nice 14 day payment cycle from receipt of invoice.

Don't be afraid to stand up for yourself people.

I agree, two week in arrears is reasonable in any climate. Any longer isn't in your best interests and rather negates the point of using recruiters. It can be dangerous if you've opted out of the Agency Regs, because the Agency Standards Office (that investigate complaints) won't intervene on your behalf. Effectively, you're no different than if you've worked direct to a client.

But that would still mean waiting a full six weeks from the start of a new engagement for payment relating to your first invoice submitted at the end of that first month. Painful, if you've been on the bench for a while and funds are drying up. But no longer than two weeks after submitting your next invoice (the same wait, but now you've got your first payment it's not so painful).

NB: recruiters cannot refuse to pay you for work completed, even if you don't submit a timesheet. But they do have the right to delay payment and check that you did work the hours or days you are invoicing for.

Recruiters often give the impression that they can lawfully compel you to submit a signed timesheet to qualify for payment at all - it's the timesheet not the work done that matters.

This is not true.

[The SMG]

Originally Posted by ShortStraw

I've just had an agency trying to pull a fast one with me. I noticed in the contract:

"We expect invoices weekly with a signed timesheet from the client. All invoices will be paid 30 days after the end of the month in which they were received"

So what they are saying is that if I put in an invoice on the 1st January, I will get it paid on the 2nd March (by BACS, so it would be even later).

The consultant wasn't much help so in the end I spoke to the financial director, who gave the classic "but it's always been like that, that's how everyone is paid".

I told him no way was I waiting until the 30th August to receive payment for work done this week (or the start of September if you wait for the funds to clear). It's just not worth exposing yourself to that level of risk in the current climate.

A bit of posturing, an "I'll get back you" response and suddenly I'm on a nice 14 day payment cycle from receipt of invoice.

Don't be afraid to stand up for yourself people.

I started a post on this very subject quite recently. Having thought about it, in the current climate where contractor supply massively outweighs demand (from clients AND agents) you certainly have a lot less room for negotiation. It's a cash flow thing - the agency are merely attempting to use us as an interest free account on the assumption that they'll be getting paid from the client much sooner than they'll be paying Mr / Mrs contractor.

I'm pleased that you managed to negotiate a 14 day payment cycle. Tell me, how did you do it?

G

[Azazel]

Originally Posted by The SMG

I started a post on this very subject quite recently. Having thought about it, in the current climate where contractor supply massively outweighs demand (from clients AND agents) you certainly have a lot less room for negotiation.

I know. It's great, isn't it?

Originally Posted by The SMG

It's a cash flow thing - the agency are merely attempting to use us as an interest free account on the assumption that they'll be getting paid from the client much sooner than they'll be paying Mr / Mrs contractor.

Please don't forget that in these days cash flow affects us all. Many of our clients are pushing for longer payment cycles. Agencies often get paid MUCH later than the contractor. We had someone the other day saying they wouldn't do business with us without a 6 month payment cycle. Needless to say, we didn't do business with them. It's not like they were Tesco or anything.

[curleyted]

What's the typical payment cycle to agencies Azazel?

[dodgy_Dave]

Sometimes a month or two after you've been paid curleyted.

Just think, all this could be yours if you went direct. It pays to use us

[bez]

But don't you just factor that using another company anyway?

[The SMG]

Originally Posted by curleyted

What's the typical payment cycle to agencies Azazel?

Most of the upper contracts that I've seen state that the client should pay the agency within 14 days of invoice. This of course never happens in practice for two reasons.

1. I've never once come across an 'efficient' agency payroll / accounts receivable team. If the invoice is late after 15 days, they probably won't even chase until its somewhere closer to 45 days late.

2. The client is fully in the driving seat, particularly if they're big and high volume recruiter. Most agencies want PSL status and will do whatever it takes to look after the client. If that means biting the bullet and getting their invoiced paid on 60 day terms then that's what they'll do.

G