Agency looking doomed....

[uk contractor]

Interesting point raised about NOT invoicing the agency, so that they never get the money from the client, but as pointed out this will likely exacerbate their problems.

I agree you should - collectively if at all possible - approach the agency and state that you have concerns over their ability to pay you. When it's only rumours this is a bit tricky, and knowing if you can trust what they say is also tricky.

You could demand a switch to billing weekly but switching agency based on a rumour, if they have paid you to date, wouldn't be contractually OK.

Invoice the agency for their fees ONLY not the contractor money IME when an agency is going under the temptation for them to disappear with the contractors funds or use it elsewhere to prop up another of their failing businesses is huge IME a lot of smaller agencies are run by people who also run several other small enterprises at once!

This way the agency still gets their precious hard earned fee(s) & the contractors get their essential salary win win why does the agency need to hold onto the vast majority of the contractor money for a few days the interest cannot be that much anymore

[d000hg]

Invoice the agency for their fees ONLY not the contractor money IME when an agency is going under the temptation for them to disappear with the contractors funds or use it elsewhere to prop up another of their failing businesses is huge IME a lot of smaller agencies are run by people who also run several other small enterprises at once!

This way the agency still gets their precious hard earned fee(s) & the contractors get their essential salary win win why does the agency need to hold onto the vast majority of the contractor money for a few days the interest cannot be that much anymore

What the agency charges as fees is none of your business.

[SueEllen]

Invoice the agency for their fees ONLY not the contractor money IME when an agency is going under the temptation for them to disappear with the contractors funds or use it elsewhere to prop up another of their failing businesses is huge IME a lot of smaller agencies are run by people who also run several other small enterprises at once!

This way the agency still gets their precious hard earned fee(s) & the contractors get their essential salary win win why does the agency need to hold onto the vast majority of the contractor money for a few days the interest cannot be that much anymore

Contracts are enforceable by law so what you are suggesting won't work especially when the administrators come on board.

In addition some agencies pay their contractors before they get paid themselves by their client.

[d000hg]

In addition some agencies pay their contractors before they get paid themselves by their client.

Probably many/most, in fact - it's one reason agencies get into trouble in the first place as they need quite a substantial buffer to accommodate slow-paying large clients.

[Safe Collections]

Word is from the client that my current agency may be having some "cashflow" problems. There are 5 of us here working through said agency, who pay monthly i.e. invoice at end of 4 weeks and payment received for 4 weeks the following week.


Anyone come across this before? How can you get out of this without breaching some handcuff clause?


I don't fancy losing 5 weeks money so how can any agency demise be pre-empted?

It should be noted that whilst it *may* be possible to agree a mutual withdrawal of any handcuff clause between YourCo and the Agency, it is by no means guaranteed to hold water if the company is placed in to formal administration or liquidation. An administrator or receiver could theoretically challenge the agreement if they consider it to be "to the detriment of creditors".

It is unlikely in our opinion given that most dodgy agencies simply cease to trade (with the directors/shareholders pocketing the contents of the current account on their way out of the door) but it still remains a potential risk.

We would be very interested to know exactly how ClientCo found out the agency has financial problems, we can't imagine a circumstance when it would be appropriate for a supplier to inform a client of it's potential insolvency.

Could it be a rumour started by a different agent? It wouldn't be the first time we have seen a competitor try and blacken the name or reputation of a company to win business...

[NotAllThere]

Probably many/most, in fact - it's one reason agencies get into trouble in the first place as they need quite a substantial buffer to accommodate slow-paying large clients.

Perhaps that's how the client know they agency is having trouble. The client has decided not to pay some large bills from the agency just yet.

[DaveB]

Perhaps that's how the client know they agency is having trouble. The client has decided not to pay some large bills from the agency just yet.

Or the Agency have been chasing the client for outstanding payments and let slip they have cash flow problems as a result.

[TheFaQQer]

Bear in mind that if you have invoiced the agency, depending on how you account for VAT you may still be liable for the VAT amount.