Direct contacting

[absolute]

Hi,

I am new as IT contractor and I would like to know if it's easy for you to contract directly with an end customer.

Excluding the difficulty, is it a good idea to do it ?
if it's not, can you explain to me why it's not ?

Thanks,

[RichardCranium]

I am new as IT contractor and I would like to know if it's easy for you to contract directly with an end customer.

No.

Excluding the difficulty, is it a good idea to do it ?

You ought to get a higher rate, but ...

if it's not, can you explain to me why it's not ?

... you - arguably - take a higher risk of not being paid, and lose the factoring service most agencies provide.

[Spacecadet]

Hi,

I am new as IT contractor and I would like to know if it's easy for you to contract directly with an end customer.

Excluding the difficulty, is it a good idea to do it ?
if it's not, can you explain to me why it's not ?

Thanks,

I've done it three times and excluding late payments I've never had a problem. Chucking toys out of the pram can solve the payment issue but its much more professional just to be a bit vocal about it and make sure you have cash in the bank to keep you going.

In a way its easier than with an agency as the clients have all been happy to use my contract and I've not had to get time sheets signed to get paid and I've not had to go through an agency to haggle rate increases or sort out extensions.

Payment involves emailing the invoice to the accounts receivable, CC in the appropriate manager to authorise and it gets paid.

The hardest thing about working direct is getting the direct clients in the first place. 2 of them I've had contacts in there already who got me on board. Current direct client cold called me offering an interview and almost immediate start.

[Boo]

you - arguably - take a higher risk of not being paid

If you read these forums you will come across a few contractors who have been stiffed by their clients, but many, many who have been stiffed by intermediaries like Albany, various agencies and dodgy payment compaines etc etc.

Istm that if your client is remotely blue chip then there is essentially no likelyhood that they will avoid paying you (delay is another issue) but a substantial chance that any intermediary will do that.

Boo

[northernladuk]

and I would argue you have less chance going direct as a new contractor as they are shouldering an unknown risk. Will you bail, fold, not deliver? They would be happier letting an agent deal with you if you are still starting. If you have years of delivering and seeing contracts through you will look a lot safer bet... IMO anyway..

[nomadd]

Hi,
I am new as IT contractor and I would like to know if it's easy for you to contract directly with an end customer.

Depends who the "end customer" actually is. None of the large clients I deal with would touch you with a barge pole as a direct contractor. But many smaller clients, especially those with whom you had an existing relationship, would probably be more willing. Mind you, they'd want to reduce costs also, so you wouldn't necessarily be left "better off".

[The Agents View]

Depends who the "end customer" actually is. None of the large clients I deal with would touch you with a barge pole as a direct contractor. But many smaller clients, especially those with whom you had an existing relationship, would probably be more willing. Mind you, they'd want to reduce costs also, so you wouldn't necessarily be left "better off".

WHS

Bigger clients have the majority of the financial risk removed by having either a big supplier, preferred supplier, or a series of agencies with whom they have relationships. From their point of view, it's much easier to set up an agency and get one invoice for 30 or 40 people, than have each of those people set up as a supplier, and then pay each invoice seperately. Added to factoring costs, having some legal cover for IR35 etc, and (given the current economy) it gives them the chance to call the agency a consultancy, and not have the resources they need, put on the headcount numbers - that means the numbers look good for the City, hence the reason the bigger businesses go down that route.

There are small clients out there who will work with you direct, and in some circumstances, the bigger ones will too, but as a general rule of thumb, it has far more hurdles, and will essentially leave you no better off (client will want you cheaper because there's no agency margin - you don't really think they'd want to pay you that money do you?)

[VectraMan]

and I would argue you have less chance going direct as a new contractor as they are shouldering an unknown risk. Will you bail, fold, not deliver? They would be happier letting an agent deal with you if you are still starting. If you have years of delivering and seeing contracts through you will look a lot safer bet... IMO anyway..

I'm not sure there's any real benefit or extra safety to the client of having an agent. They're shouldering an unknown risk either way.

Last time I worked direct the client went bust and I lost a month's income. I had an old client offer me a direct contract last year (which I couldn't take), and another more recent client wanting me to go direct - in both cases looking to save the agency fee, which of course wouldn't have been passed on to me. But as the argument about whether agency cuts matter goes, being cheaper to the client is to your benefit as it means they're more likely to keep you on.

[The Agents View]

I'm not sure there's any real benefit or extra safety to the client of having an agent. They're shouldering an unknown risk either way.

Last time I worked direct the client went bust and I lost a month's income. I had an old client offer me a direct contract last year (which I couldn't take), and another more recent client wanting me to go direct - in both cases looking to save the agency fee, which of course wouldn't have been passed on to me. But as the argument about whether agency cuts matter goes, being cheaper to the client is to your benefit as it means they're more likely to keep you on.

Which is why the big players use the establish businesses, who are on a firm financial footing. Risk aversion. It's also why contractors often like the agency scenario - if the client goes bust, the agency still has to pay out.

As for your rate being lower, meaning your more likely to be kept on - that's codswallop! Delivery is what will keep you working for the client. If you're tulip, then it doesn't matter if you're being paid £1.50 per hour - it's £1.50 an hour which could be better spent. Equally, if you're absolute mustard and you're bringing in tangible, real life benefit, then it doesn't matter if you're paid £1m per hour, as long as your return is a few times that!!

[BoredBloke]

I was on the preferred supplier list to GSK for about a year and never once had a late payment. They paid 30 days after they got the invoice and were spot on time wise. I then worked direct for Valeant in the US and in the end left being owed just over £30,000 in fees and expenses. I billed them in the September and eventually got paid in April.

Not done it since!