Typical payment period from agency

[booms]

Hi,

First time contractor and trying to confirm what's normal/that I've not been taken for a ride.

I've been offered a contract where at the end of the month, I need to submit my invoice within the first few business days; and then will be paid a month after that.

An example is

- Work in December
- Submit invoice by 6th January (maybe a pain to find someone to sign it during holiday season)
- Get paid on 3rd February

Does this seem reasonable?

Thanks for your help.

[MrMarkyMark]

Hi,

First time contractor and trying to confirm what's normal/that I've not been taken for a ride.

I've been offered a contract where at the end of the month, I need to submit my invoice within the first few business days; and then will be paid a month after that.

An example is

- Work in December
- Submit invoice by 6th January (maybe a pain to find someone to sign it during holiday season)
- Get paid on 3rd February

Does this seem reasonable?

Thanks for your help.

Not unheard of unless you can negotiate better.
I would recommend credit checking the agency, just in case they have money problems.

Given the state of the economy these days, I always insist on a weekly payment.
i.e. work one week, invoice Monday, paid Friday.

That limits me to the potential exposure of "only" losing one weeks money.
The risk of losing money, if an agency goes under is very real, I've heard of people losing £20K+ before.

[oliverson]

Hi,

First time contractor and trying to confirm what's normal/that I've not been taken for a ride.

I've been offered a contract where at the end of the month, I need to submit my invoice within the first few business days; and then will be paid a month after that.

An example is

- Work in December
- Submit invoice by 6th January (maybe a pain to find someone to sign it during holiday season)
- Get paid on 3rd February

Does this seem reasonable?

Thanks for your help.

It varies a lot. I've had similar terms to those on only one contract in the c. 13 years I've been doing this. I've also had a fair few where you get your timesheet signed and invoice submitted by Monday 17:00 and the funds are in your account that Friday (Resource Solutions typically).

The clear downside for you is having to wait such a lengthy period of time (not that it's lengthy in the other industries where 3 month payment terms are common) which may be compounded if you have significant expenses to make it happen. But the plus side of course is when it ends you still have a month to come in. You could end up landing another contract on shorter terms and get a double month.

[MrMarkyMark]

It varies a lot. I've had similar terms to those on only one contract in the c. 13 years I've been doing this. I've also had a fair few where you get your timesheet signed and invoice submitted by Monday 17:00 and the funds are in your account that Friday (Resource Solutions typically).

The clear downside for you is having to wait such a lengthy period of time (not that it's lengthy in the other industries where 3 month payment terms are common) which may be compounded if you have significant expenses to make it happen. But the plus side of course is when it ends you still have a month to come in. You could end up landing another contract on shorter terms and get a double month.

I fail to see any plus side of them (the agency) having 2 months of my money.
Enron and Lehman's being two fine examples of companies "who were too big to fail"

[LondonManc]

It's unusual but not a red flag. Smaller businesses often have monthly runs - we're a business and while it's in our interest to get paid as soon as possible, it's down to the individual how much non-payment you want to expose yourself to.

That said, if you go direct, the model that you've described can be exactly what happens - getting paid for January's work in March is something that I've had happen to me and is a model that you'll probably have to accept if you go direct.

[MrMarkyMark]

It's unusual but not a red flag. Smaller businesses often have monthly runs - we're a business and while it's in our interest to get paid as soon as possible, it's down to the individual how much non-payment you want to expose yourself to.

That said, if you go direct, the model that you've described can be exactly what happens - getting paid for January's work in March is something that I've had happen to me and is a model that you'll probably have to accept if you go direct.

Very true, hence why I recommended the credit check.
If you are truly direct it can take 3 months .

Out of the bigger players I believe McGregor Boyle is one of the few that does not do weekly payment terms these days.

[LondonManc]

Very true, hence why I recommended the credit check.
If you are truly direct it can take 3 months .

Out of the bigger players I believe McGregor Boyle is one of the few that does not do weekly payment terms these days.

McGregor Boyall

Good agency though.

[oliverson]

I fail to see any plus side of them (the agency) having 2 months of my money.
Enron and Lehman's being two fine examples of companies "who were too big to fail"

If you're the kind of contractor who blows all he/she earns and has no warchest, it's worth knowing you still have a month to come when you're struggling to find your next contract in a market like this.

[jamesbrown]

Hi,

First time contractor and trying to confirm what's normal/that I've not been taken for a ride.

I've been offered a contract where at the end of the month, I need to submit my invoice within the first few business days; and then will be paid a month after that.

An example is

- Work in December
- Submit invoice by 6th January (maybe a pain to find someone to sign it during holiday season)
- Get paid on 3rd February

Does this seem reasonable?

Thanks for your help.

In my experience, that's completely standard for working direct (if anything, at the better end of the spectrum), but I'd expect better terms through an agency.

[MrMarkyMark]

If you're the kind of contractor who blows all he/she earns and has no warchest, it's worth knowing you still have a month to come when you're struggling to find your next contract in a market like this.

That's as maybe, however I would rather the cash was in my company account, rather than being used by the agency to pay other contractors.

In fact, that's how people lose money, an agency goes bust and you are at the end of the line with a lot of other people who wish to be paid.

So, sorry, as I said earlier I can't see any advantage there at all there really.