Client wants to relax invoice frequency

[LondonManc]

I'm from Yorkshire so you are just p***ing in the wind correcting me I'm afraid.

Sounds good and I'll order two of whatever you said though.

He said that tha's tawkin tulip lad.

I agree.

[BlasterBates]

Is there any truth to the heresay that some agents are investing delayed payments in the money markets? I can see that if you have 100 guys on the books, putting in a two month lag could provide opportunity to make a reasonable bit for the agent.

The other thing that surprised me about my agent is that the money that I get paid did not necessarily come from my end client. It's not a simple middleman arrangement. There is a bit of complexity in there because certain clients do not pay on time, and which contractor gets paid first depends on a few factors.

One of the key raison d'etre of an agency is to smooth payments to the contractor. Large companies always pay late to reduce their working capital. This is not so much that they can invest excess cash rather the opposite, so they can reduce their loans as all companies have debt, reducing the level of debt will increase profitability. Part of the costs of running the agency is in financing payment to the contractor. Larger agencies provide economies of scale in that instead of chasing lots of little debts they bill the client for all their contractors and chase one big debt.

[TheBA]

Thanks for the comments.

It's a large UK firm so not worried about the payment. To be honest, it's more about what's good practice especially as I only have a catch call with the director on a weekly basis. He's in a different office, I'm on my own up north. The other complication is that I'm claiming travel expenses 4 days a week, so that adds to the paperwork.

To be honest he's over egging it as it really doesn't sound complicated - print, sign, pass to PA. Apparently it's difficult to coordinate diaries with his PA.

That said it's a 12 month contract and they have few years worth of work so willing to compromise. Although his obsession with Terms of Reference documents is starting to grate.

As for being more B2B, I did suggest a PO before I started but they don't do them for contractors.

[Lance]

As for being more B2B, I did suggest a PO before I started but they don't do them for contractors.

I would be wondering why they don't do POs for contractors.
And insist on weekly time sheets as proof of delivery.

[Fronttoback]

One of the key raison d'etre of an agency is to smooth payments to the contractor. Large companies always pay late to reduce their working capital. This is not so much that they can invest excess cash rather the opposite, so they can reduce their loans as all companies have debt, reducing the level of debt will increase profitability. Part of the costs of running the agency is in financing payment to the contractor. Larger agencies provide economies of scale in that instead of chasing lots of little debts they bill the client for all their contractors and chase one big debt.

This is not the case with my agency. They do not finance anything- they do not borrow to pay me. This is one of the small issues I have with them, they are making risk free profit. If a client pays late, my pay can be late- this happens, one bank didn't pay up and my pay was late. That late paying bank was nothing to do with me, I didn't work for them. It makes sense for them to operate as you say- smoothing out the pay for me to isolate me from late paying get clients- but I have not seen that happening. I have only dealt with a few agencies though, most of my 12 years gigging has been direct.

[SueEllen]

This is not the case with my agency. They do not finance anything- they do not borrow to pay me. This is one of the small issues I have with them, they are making risk free profit. If a client pays late, my pay can be late- this happens, one bank didn't pay up and my pay was late. That late paying bank was nothing to do with me, I didn't work for them. It makes sense for them to operate as you say- smoothing out the pay for me to isolate me from late paying get clients- but I have not seen that happening. I have only dealt with a few agencies though, most of my 12 years gigging has been direct.

Don't sign contracts with a clause that states the agency will only pay you once they get paid by the client or similar.

[Lance]

Don't sign contracts with a clause that states the agency will only pay you once they get paid by the client or similar.

I've had contracts where expenses aren't paid till agency is paid. It's a pain but then I never had any huge outlay.
I agree though though. Don't agree to that for the services. How can you prove they're wrong if they rip you off using that as an excuse?

[Fronttoback]

Don't sign contracts with a clause that states the agency will only pay you once they get paid by the client or similar.

That sounds good in theory but if the agent has the gig and those are their terms, what can you do? Have you ever got an agency to change a contract from "pay you once they pay us" to "pay you regardless of whether we got paid"?

I'm in a niche market and deal with small agencies - maybe you are dealing with the big boys.

[SueEllen]

That sounds good in theory but if the agent has the gig and those are their terms, what can you do? Have you ever got an agency to change a contract from "pay you once they pay us" to "pay you regardless of whether we got paid"?

I'm in a niche market and deal with small agencies - maybe you are dealing with the big boys.

Yep - both big and small agencies. Helps if you get your contracts reviewed as changing that is normally the least of their headaches.

[Contreras]

This all sounds a bit familiar to me. Contract negotiated directly with client manager, it even passes with their "legal person", but the payment terms are conveniently overlooked. Your invoice goes in and finally Accounts Payable get involved, they have no sight of or care about the contract terms and are a law unto themselves. Client manager just wants an easy life.

I would:
- try to get signed off timesheets (but good luck with that)
- invoice as per contracted terms, resigning that they won't actually be met
- tactfully remind them that the original quoted rate was based on weekly

By invoicing against contracted terms it puts the timeline in your favour should a debt need chasing.

There may be some trading between sides, but ultimately you accept what's on offer.

Practically that means invoices may be batched and some technically paid late. It's also convenient for the client manager to blame the system when in fact your invoice has been buried on his/her desk waiting for approval.

Fwiw, I always go for signed paper timesheets, even when via agency with an online system. There is a limit to the legal jargon before the person approving it starts to feel uncomfortable vs. flattering their ego. My timesheets have no logo etc. simply titled "Timesheet", a plain table of days/hours, and the sign-off says:

Consultant: I certify that the time recorded above is an accurate record of services provided under contract between <MyCo> and <ClientCo> [or <AgencyCo>].
Signed: ........................ Date:..............

Client Manager: I certify that the time recorded above is an accurate record of the services provided to <ClientCo>.
Signed: ........................ Date:..............

I also add a note on ALL invoices (although not strictly necessary, being a statutory right):

Overdue payment is subject to statutory interest and charges in accordance with the Late Payment of Commercial Debts (Interest) Act 1998 as amended and supplemented by the Late Payment of Commercial Debts Regulations 2002 and the Late Payment of Commercial Debts Regulations 2013. The statutory interest or charges levied may include retrospective claims against previous overdue payments whether or not the principle debt has since been settled.

HTH.