Paid when paid contract terms - insurance?

[ladymuck]

In negotiations with a potential new consultancy client and they've stated they align payment terms with the payment terms agreed with their customers. This to me implies a 'paid when paid' contract.

I was wondering if anyone is aware of any insurance products that might pay out should the customer not pay the consultancy and therefore not pay MyCo?

[eek]

not directly because I don't think any such product can exist but the consultancy really should be using someone like Sonovate to handle that side of things..

Personally it's a risk too far - unless I'm picking the end client why should I have any of the risk

[ladymuck]

Yeah, there's several alarm bells ringing on this one. I know the end client so I'm not too concerned about payment (but know that they do occasionally "forget"). When someone gets offended that I've done a credit check and inform them I'm only willing to extend credit equivalent to one months' invoicing, I start wondering what else I need to worry about.

Maybe I'll stick with pursuing the inside job.

[courtg9000]

I "think" that the only thing that would get you coverage is invoice factoring BUT be warned invoice factoring for the recruitment and consultancy sectors is very expensive in terms of rates and in some cases the rates can be prohibitive. The industry regards these sectors as high risk.

[Eirikur]

Not sure if I would be happy with 180 days (or similar) payment conditions