Agencies and Late Payment Penalties

[Janner]

Just wondered has anyone had problems getting an Agency to pay late penalties. They have now taken a stance that their position is not flexible or negotiable as it is based on advice received from their legal representation. i.e.
- A supplier and purchaser can make their own contractual arrangements for interest to be paid, if payment is made late; if they do, then the Late Payment of Commercial Debts Act will not apply;
- The arrangement does need to be deemed substantial and it is up to the Court to decide whether a particular arrangement is or is not. With the burden of proof being on me the supplier and not them.

They claim that their contract makes provision for late payment charges, i.e.
“Subject as aforesaid the Supplier reserves the right to charge interest to Pendragon on any sums which have fallen due for payment at the rate 2% p.a. above the base rate of Lloyds TSB Bank plc as published from time to time. Such interest will begin to accrue from 30 days after the date when such payment falls due to be paid under this Agreement and will continue to accrue until judgement or sooner payment.”

[TheFaQQer]

So the contract effectively gives them an extra 30 days of credit, according to their legal representatives....

If you're a PCG member, it's probably worth ringing their legal helpline and see what they suggest - seems like this is an unfair term in the contract that any court would kick out.

Did you opt out of the agency regulations, in writing, before meeting the client? There may be some more protection you can get from being opted in.

[thunderlizard]

You don't have to accept that just because their position is legally advised, it's automatically non-negotiable, unless their legal adviser is Judge Dread.

However to me that seems like a reasonable provision for late payment interest The free 30 days credit is a little cheeky but not so bad as to be laughed out of court. Most of the creditors that supply my company do that kind of thing - if we pay a couple of weeks late there's no interest charged.

Do use the PCG legal line though. It's the 2nd best thing about them.

[TheFaQQer]

Do use the PCG legal line though. It's the 2nd best thing about them.

Go on, I'll bite - what's the best thing about them?

[Cheshire Cat]

Does anyone have experience of negotiating payment schedules with pimps?
Their "standard" is weekly invoicing with payment to follow after 28 days, which gives me a 5 week exposure. I think this is fairly reasonable, and it's not a deal-breaker, but obviously if I could reduce my LtdCo's exposure I'd rather do so. Anyone had any success/failure in this matter?

[ratewhore]

Does anyone have experience of negotiating payment schedules with pimps?
Their "standard" is weekly invoicing with payment to follow after 28 days, which gives me a 5 week exposure. I think this is fairly reasonable, and it's not a deal-breaker, but obviously if I could reduce my LtdCo's exposure I'd rather do so. Anyone had any success/failure in this matter?

Bearing in mind it's a B2B relationship, I always take the view that anything less than 30 days is a bonus. I have made amendments to payment terms in a contract, adding a statement 'subject to maximum payment terms of 30 days'. That is only where the payment clauses are over-complicated (i.e. invoice in by the 3rd friday kicks off payment on the following thursday blah blah blah).

Elan are farting around paying me right now and have missed 2 payment runs, however, bearing in mind they are still within the 30 day terms, I'm not creating a fuss about it.

[Sockpuppet]

My Agy pays within 3 working days which I am happy about.

For direct work its 30 days from invoice.

[Sockpuppet]

Go on, I'll bite - what's the best thing about them?

Legal expense cover?

[NotAllThere]

Does anyone have experience of negotiating payment schedules with pimps?
Their "standard" is weekly invoicing with payment to follow after 28 days, which gives me a 5 week exposure. I think this is fairly reasonable, and it's not a deal-breaker, but obviously if I could reduce my LtdCo's exposure I'd rather do so. Anyone had any success/failure in this matter?

Yes, I've successfully negotiated to terms agreeable to me. Otherwise I won't take the work. It depends on what leverage you have.

My experience over the last 13 years, leads me to expect payment within 7 days from agencies. The justification for having high margins, is that agency acts as a factor of the debts. They get the higher margins in return for taking the higher exposure risk. I've only accepted longer payment terms when the agency margin has been low. ( Though one agency gig I did had a fixed-by-the-client margin of 7%, and payment the day after invoicing! ).

[ratewhore]

but obviously if I could reduce my LtdCo's exposure I'd rather do so.

Run a credit check against them.