Going direct with client for first time

[ChimpMaster]

Hello all

For several years now I have been contracting through agencies, but now I have an opportunity where I will be able to go direct to a client. The client is in agreement with the principle of doing this, so no problems there.

I'm just wondering how I should go about this. I'm not a member of the PCG, but I've heard they supply direct client/contractor contracts, so I may join for that (as well as the insurance).

I'm a little concerned about payment schedules, i.e. an agency would factor and pay me within a month. Would I specifically need to agree this with the client, or would they expect me to fall into line with their normal (no doubt longer) supplier payment schedules?

Is there anything else I should look out for when going direct?

[SueEllen]

Payment depends on what you negotiate just make sure it's written in the contract. The general rule of thumb is if you don't ask you don't get.

Some companies are late and bad payers because they want to extend their credit line, other companies are prompt payers. If they are late payers don't hesitate to put your foot down and refuse to provide your services until they pay up. Make sure you don't negotiate this out of your contract.

Ideally if the contract isn't a standard PCG one you want a lawyer to review it to make sure you don't leave clauses in that can screw you or forget to put simple things in.

[mudskipper]

I work direct which is great, but getting paid on time can be a struggle. Last invoice took over 10 weeks - so 14 weeks from when I'd worked. Just bad management I think, as they then paid that, plus the following 2 months invoices at the same time. Definitely get it written into the contract, and the day the first payment is late (if it is) kick up a big fuss, so that it doesn't become the norm.

[ShandyDrinker]

My best contract so far was direct with the client. They were prompt payers. It helped to have payment terms of 7 days following invoice in the contract (this was at their request). Occasionally payment was a week or two late but nothing that couldn't be dealt with by talking to someone in accounts. More often than not it happened as a result of a period end.

I suspect I was lucky with this client. Another very small business client took 3 months to pay an invoice once and it was only for a few hundred pounds...

[SueEllen]

I suspect I was lucky with this client. Another very small business client took 3 months to pay an invoice once and it was only for a few hundred pounds...

To be fair it doesn't depend on business size or the size of the invoice it's just the company's or finance department ethics in paying their bills.

I've had small businesses that have paid promptly, small businesses that didn't, and a large business whose finance department didn't resulting in them annoying the top management of the department who then compensated me.

[Normie]

As others have said, it very much depends on the client and the contract. I contract direct and luckily I invoice on the last Friday of the month, and the money is in my account on Wednesday the following week.

[Hex]

I'm direct. I use the PCG direct contract with 30 day payment terms. I've had a few months where they were a few days late, but generally they pay by about the 25th of the month.

Obviously it depends on your client. If I did it again, I would change it to 7 day payment terms and see if I could get them to agree to this.

[ChimpMaster]

Hey all. Thanks for the responses so far - looks like this contract could get the go-ahead, with no agent

Just so that I have got this right, assuming I bill monthly, I would add the 20% VAT on top and submit that to the client, right?

I'm going to apply payment terms of 30 days, which I think is fair. I'm thinking of having no notice period on supplier (my) side, which I believe is more IR35 friendly.

Any other advice for my first direct contract would be gratefully received!

[ShandyDrinker]

Just so that I have got this right, assuming I bill monthly, I would add the 20% VAT on top and submit that to the client, right?

Yes...

Any other advice for my first direct contract would be gratefully received!

Get to know the accounts/payments department/team well!

Otherwise I'd hope you'll find it a much more enjoyable experience than working through an agency...

[Hex]

Hey all. Thanks for the responses so far - looks like this contract could get the go-ahead, with no agent

Just so that I have got this right, assuming I bill monthly, I would add the 20% VAT on top and submit that to the client, right?

I'm going to apply payment terms of 30 days, which I think is fair. I'm thinking of having no notice period on supplier (my) side, which I believe is more IR35 friendly.

Any other advice for my first direct contract would be gratefully received!

For notice, I would recommend allowing them to give notice immediately and you having to give a month. That is what I have in my contract. The fact they can get rid of you with no notice is good from IR35 perspective (mutuality of obligation etc). This clause has been picked out as being good by the contract reviews I have had. I personally don't have a problem with the client being able to terminate immediately. My warchest is healthy and if they don't want me to work for them I'd rather they just said and I'll go on my way.