Agency Risk

[pmeswani]

Ok no probs, but if you could first send me £150 to cover transaction charges. My Nigerian bank details are ....

Would a Rubber cheque do? The ones I use likes to bounce a lot.

[Ruprect]

In all seriousness this sounds like a problem with the agency. There is no way I would still be working if this hadn't been sorted out.

[Crossroads]

I've just "downed tools" on one of my current contracts. The useless agency paid on time for the first 5 invoices on time, then 3 times in the next 10, and has just managed a run of 10 straight late payments, with 3 more overdue and 3 others still outstanding.

They were advised that this would be my course of action if they did not stick to the payment terms stipulated in the contract.

The project is close to completion and although I have a good relationship with the client it is highly unlikely there will be any work in the future from them, so it wasn't a hard decision.

The client fully understands my position...the agency isn't happy but it's their problem to sort out!

[kryten22uk]

How late were they late?

Every signle invoice over the 18mths has been late for me. Usually averaging around 6weeks to payment. The reason given is that the client always leaves it to the full 30days, but then add on the buffer days either side for them to receive my invoice and send their own to the client along with the 3-5 working day payment delay from agent to me.

My contract and invoices state 30days payment, but the agent believes that it can wait until the client pays before they pay me. Theoretically, they have a business relationship with my company and hence the payment status of the end client is irrelevant, and the agency should honour my invoices in a timely fashion regardless of whether they've been paid or not.

I worked out that if I submit retrospective claims for late payment compensation as per Commercial Debts act, then I'm owed just over £3k compensation+interest.

[Starkraving]

I've been in similar situations before.

The way I handled it is:

Speak to the client and explain the situation. You don't want to withdraw your services but you need them to help resolve the issue.

Get an email off the client asking you to do work. Ask them to also state the basic terms. This is sufficient for a contract to be in place, I believe. They have asked you to do work and therefore they must pay, regardless of the agency issue.

I find it's easier to do it this way than to withdraw your labour which may antagonise the client (I know it's not your fault). If they refuse such an email, though, I would consider leaving.

[dropcliffsnotbombs]

My previous contracts have been on weekly payment terms so I've never been owed huge amounts at any one time. I've just started a new contract where I can only invoice once a month and on 30 day terms. Stories like this make me a bit nervous....especially when I keep hearing that agencies are shedding staff everywhere.

[kryten22uk]

Just a little update on this. I finally got a signed contract through, so only 3mths into the contract! But payment delay is getting worse. Around 7-8weeks now. I sit next to my manager, so I can see when the agency invoice arrives, and sometimes is well over a week from the point the aknowlege receipt of the invoice i email them!

[kryten22uk]

This is getting daft now. I was paid for february work but nothing since. Noone answering phones or emails. There are only a couple of people at the small agency and an optimist might say its due to them being on hols for HalfTerm. But clearly a lot bigger downside.

Is late payment a breach of contract? Can I terminate the agency and continue to work direct without falling foul of the 6mth restriction clause? Or does that clause remain valid?

[SlimRick]

If they have breached contract - then it is no longer valid. Read your payment terms carefully, or copy that section on here so we can have a read.

[kryten22uk]

The contract states that the agency agrees to pay within 30 days of invoice date. Not sure to what extent a breach of contract invalidates the other clauses though.

I have just received an email from the agent who says the "for some reason" the payment didnt go through, and he's only just noticed. He says he's out of the country at moment and will redo the payment on his return; albeit he didnt give a return date.

I've drafted an email stating my intention to apply the "The Late Payment of Commercial Debts (Interest) Act 1998" to this and any future late payments. The late payment is over £20k, so 8%pa interest for a month is not insignificant. This will destroy our faux-friendly relationship, but there's no way I'll renew with them ever again anyway.