Insurance For Non Payment By Client

[DeludedAussie]

Just about to go direct with a client in Manchester and I am a bit concerned that they might not pay invoices or go bankrupt before I have been paid

Its a smallish company who have been running for 6 months

Do QDOS provide any type of insurance which covers this?

[doodab]

You need to look for invoice factoring services. Basically you sell the debt to someone for less than face value and let them take the risk.

You could also take your own risk reduction measures i.e. issue weekly invoices with quick payment terms.

[DeludedAussie]

You need to look for invoice factoring services. Basically you sell the debt to someone for less than face value and let them take the risk.

You could also take your own risk reduction measures i.e. issue weekly invoices with quick payment terms.

Yes but then the client knows that you have sold the debt and that you dont trust them

I would be much happier with insurance to cover this - I cant believe that this does not exist

[doodab]

Yes but then the client knows that you have sold the debt and that you dont trust them

I would be much happier with insurance to cover this - I cant believe that this does not exist

But they are more likely to pay up if they know they are dealing with a big company rather than a one man band.

Such insurance does exist:

Credit Insurance

But bear in mind that if you insure against non payment then the insurer will enforce strict paper trail requirements & credit limits, charge you a chunk of money, and you will still have to do the credit control yourself. They will probably do their best to avoid paying up if the tulip hits the fan, just like any other insurance company. And of course they may refuse to insure you or refuse to insure certain risks.

IMO, your best bet is to negotiate appropriate payment terms i.e. to ensure that you never extend them more than a week or two's worth of credit. That is a reasonable level of risk for being in business on one's own account.

[DeludedAussie]

But they are more likely to pay up if they know they are dealing with a big company rather than a one man band.

Such insurance does exist:

Credit Insurance

But bear in mind that if you insure against non payment then the insurer will enforce strict paper trail requirements & credit limits, charge you a chunk of money, and you will still have to do the credit control yourself. They will probably do their best to avoid paying up if the tulip hits the fan, just like any other insurance company. And of course they may refuse to insure you or refuse to insure certain risks.

IMO, your best bet is to negotiate appropriate payment terms i.e. to ensure that you never extend them more than a week or two's worth of credit. That is a reasonable level of risk for being in business on one's own account.

Did nt this catch a lot of people out when recruiters and end clients went bust in 2008?

What was learnt from that and did PCG not step in any pay?

[malvolio]

Just about to go direct with a client in Manchester and I am a bit concerned that they might not pay invoices or go bankrupt before I have been paid

Its a smallish company who have been running for 6 months

Do QDOS provide any type of insurance which covers this?

PCG Plus membership, as well as all the usual things like investigation protection (not insurance, they don't sell insurance... ) and jury service cover includes protection against defaulting debtors. For £230 a year...

[VectraMan]

PCG Plus membership, as well as all the usual things like investigation protection (not insurance, they don't sell insurance... ) and jury service cover includes protection against defaulting debtors. For £230 a year...

Not if you go direct. Only provides insurance against agents going bust, otherwise I wouldn't have lost £8K two years ago.

I would try to negotiate weekly invoicing with 1 week terms. That way the most you can lose is 2 weeks worth. But that may be a hard sell.

[v8gaz]

I believe PCG is looking at extending agency default cover to include direct clients. Not much use for right now, but should be a good addition.