Delay in payment..is it expected? - First time contractor

[BoltonLad]

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I guess you should have mentioned yrs is a std. b2b relationship on the first post; you're probably aware many(but not all) contractors go thru an agency.

In a way you're in a good position contracting directly, in another way it's not so good - you are exposed to slow payment from the principal client who more than probably regards yr invoice like any other invoice and pays on their normal terms, which is often 30 days nma (often 60 days), the govt have been trying to influence big business's to pay up on time but I don't know how much this is succeeding. BTW is the client a small company or a large co?

Medium sized one. If it a normal practice I will go on.

[Not So Wise]

But that only ever happens in a recession.

So be afraid.

Agency i had go bust under me was right in the middle of the Dot Com boom!!!!

[Moscow Mule]

Medium sized one. If it a normal practice I will go on.

In which case, they will have an Accounts Payable department. Telephone them and ask why they haven't paid within your contract terms. If they say some rubbish about "all invoices being paid within 60 days" tell them, not according to the signed contract I'm looking at.

Muppets at current clientco wouldn't pay an invoice until they had been chased twice so I was two months out before I realised. They made up for it by paying the third 20 days early.

I seem to have beaten the 60 days payment habit out of them and now they are pretty reasonable getting most payments to me in 35 days (still outside terms but not enough for me to care).

[stillooking]

Medium sized one. If it a normal practice I will go on.

as moscow mule said, it shouldn't really be accepted in this day and age. If you don't feel confident at shaking them and you can afford to be paid only six times a year then leave it, but do try and get 30 days payment at the least.

[BlasterBates]

Thank you for all the replies.

The contract is with the employer(thru my limited company). Not thru any agencies. The employer knew that I am a first time contractor. Whenever I ring the HR and finance, constant reply, 'will clear in a day or two'. Other contractors
thru agencies said that they got their payment cleared.

If you are direct it is quite normal for companies not to pay their bills on time. You have to chase them. That is one function of an Agency they pay you and then chase the bills. If you simply wait you probably won't get anything as companies pay suppliers as late as possible. You need to send the reminders, and a friendly reminder might not work, you may have to threaten charging interest.

[Spacecadet]

It's the duty of any good finance director to make sure that bills are paid as late as possible without damaging the companies credit rating or ability to operate.


Just keep hassling and making noise and make sure you hassle as high up the command chain as you can, they'll pay up.

[BoltonLad]

I have decided to wait for another week after looking at all the replies.

Thanks for sharing all your thoughts/exp.

Cheers,
BoltonLad.

[BoltonLad]

Just an update

After a long wait, the invoice got cleared. Bit of relief.

Thanks everyone for your inputs.

Cheers,
BoltonLad

[NickFitz]

After a long wait, the invoice got cleared. Bit of relief.

Thanks everyone for your inputs.

Cheers,
BoltonLad

It's good that you got your payment at last, but you should make sure that they don't try it on again in future.

I had a client (no agency) who were utterly useless at paying my invoices on time to start with. Thanks to having a manager who was willing to chase them, even to the extent of hassling the Finance Director (Europe) and telling him to tell his AP department to get their arses in gear, things gradually got sorted out for the first couple of months, but then started slipping again.

The thing that really pulled them into line was the "payontime" stuff that RichardCranium mentioned. When they were dicking me about again, and even my friendly manager was having problems getting any joy out of them, he gave me the email address of the head of the AP department. I sent her an email explaining their legal liability, and how much I was going to charge them for late payment, according to the current penalty interest rate.

Suddenly a payment that "would have to wait until the next payment run a week next Wednesday" was made within thirty minutes

So the moral is: if the manager who needs you to be there has any clout then get them to hassle AP on your behalf; alternatively, get hold of the email address of the right person and get thoroughly legal on their ass. Once they find that they will have to pay penalty interest for late payments, and realise that they will then have to justify that additional expenditure to their own bosses, they tend to find ways to expedite payment whatever the system might be

FWIW, I never had any further delays in payment from that client. Nor did I from the next non-agency client whose AP department received such an email.

[BoltonLad]

Thanks for sharing your experience and suggestions NickFitz.


Cheers,
BoltonLad