45 Day Payment Terms - Ridiculous or what?

[Peter Loew]

I am working through a small consultancy and only now have they said that payment terms are 45 days. I think this is absurd. Yes, I should have made sure prior to starting work but it all happened so fast!

When I questioned this, I was told the auto email I get back from the system is a marking for getting paid up to 45 days later. I am thinking of invoicing every 2 weeks rather than monthly.

Clearly they await payment from the client co prior to paying me.

Anyone on absurd payment terms like this?

P

[northernladuk]

They are not really absurd. Terms can be up to 90 days but for contracting it is pretty unacceptable due to the amount of risk you are shouldering. I have had this offered in the past but negotiated down to 30 days which, although longer than I would have liked, passed off without a hitch.

Why have they only told you now? Did you not clear it with them first and have it put in the contract? If they did what did the actual contract say?

You also say you are working with them. Did you not clariffy this before you started?

[Peter Loew]

They are not really absurd. Terms can be up to 90 days but for contracting it is pretty unacceptable due to the amount of risk you are shouldering. I have had this offered in the past but negotiated down to 30 days which, although longer than I would have liked, passed off without a hitch.

Why have they only told you now? Did you not clear it with them first and have it put in the contract? If they did what did the actual contract say?

You also say you are working with them. Did you not clariffy this before you started?

My negligence in rushing through for this contract. The contract does stipulate the following:

Within 2 working days of timesheets being agreed the Consultant shall present invoices to CO for the Fees due in accordance with clause 7.1 describing in reasonable detail the matters to which the invoice relates. CO shall make payment of correct and approved invoices within 45 days of receipt of the invoice or within 2 days of the receipt of payment from the customer, whichever is the later.

I did give it to my bloody accountant to review and fat lot of good that did.

There is nothing in the contract that says I can't invoice them every 2 weeks, or 1 week for that matter so that is what I will do to mitigate my risk. The contract does say that they request timesheets monthly, but they have made no such request from me.

[Gentile]

I've worked up to 30 days before (which was longer than the initial term of the contract in that case!), but usual is more like 7-14 days. I'm not that bothered, provided the agency sticks to the agreed terms. I doubt I'd go as far as 45 days in this climate, though. 30 days is about the maximum; after that I'd only consider longer payment terms if the agency was a reasonably-sized outfit with a solid financial history, and even then I'd add a premium on top of my rate for the additional risk I'd be taking by investing a significant amount of my Ltd's time up front.

[SimonMac]

My negligence in rushing through for this contract. The contract does stipulate the following:



I did give it to my bloody accountant to review and fat lot of good that did.

There is nothing in the contract that says I can't invoice them every 2 weeks, or 1 week for that matter so that is what I will do to mitigate my risk. The contract does say that they request timesheets monthly, but they have made no such request from me.

Reading that it seems you are able to invoice weekly, which is a good trade off for the 45 days payment, it just might be squeaky bum time until the first payment drops into your account, but my current gig was monthly invoicing and 30 days payments so was no better than yours

[northernladuk]

My negligence in rushing through for this contract. The contract does stipulate the following:

If I review nothing else it would be rate and payment days lol.. But then I never forget to review my contract whatever the rush. It doesn't take long to read the important bits. I think you need to send yourself an email to rant at yourself.

I did give it to my bloody accountant to review and fat lot of good that did.

And why should your accountant have picked it up? There is nothing wrong with 45 days from his perspective. He is your accountant not your business manager. Also at the end of the day you are responsible not your accountant so this is the second person you have pointed the finger at for your failings.

There is nothing in the contract that says I can't invoice them every 2 weeks, or 1 week for that matter so that is what I will do to mitigate my risk. The contract does say that they request timesheets monthly, but they have made no such request from me.

You do weekly timesheets? It seems you have no choice when to invoice, you do it within 2 days of submitting timesheets or am I missing something here?

I wouldn't go causing trouble or making yourself unpopular. There is only one person to blame in this situation IMO.

[northernladuk]

I take it if you rushed it through you didn't have it IR35 checked either???

[Peter Loew]

I take it if you rushed it through you didn't have it IR35 checked either???

Yep did have it IR35 checked.

[Peter Loew]

If I review nothing else it would be rate and payment days lol.. But then I never forget to review my contract whatever the rush. It doesn't take long to read the important bits. I think you need to send yourself an email to rant at yourself.



And why should your accountant have picked it up? There is nothing wrong with 45 days from his perspective. He is your accountant not your business manager. Also at the end of the day you are responsible not your accountant so this is the second person you have pointed the finger at for your failings.



You do weekly timesheets? It seems you have no choice when to invoice, you do it within 2 days of submitting timesheets or am I missing something here?

I wouldn't go causing trouble or making yourself unpopular. There is only one person to blame in this situation IMO.

Yes yes I am a bad contractor I know, thanks for the telling off, I actually needed it. Just so you know, I will write the following 100 times in an email to myself:

NEXT TIME, YOU MUST CHECK PAYMENT TERMS AS WELL AS GET THE CONTRACT IR35 REVIEWED. BAD, BAD CONTRACTOR. THIS IS A LESSON YOU HAVE NOW LEARNT. GOOD LUCK WITH YOUR CASHFLOW BIT*H

P

[BolshieBastard]

I am working through a small consultancy and only now have they said that payment terms are 45 days. I think this is absurd. Yes, I should have made sure prior to starting work but it all happened so fast!

When I questioned this, I was told the auto email I get back from the system is a marking for getting paid up to 45 days later. I am thinking of invoicing every 2 weeks rather than monthly.

Clearly they await payment from the client co prior to paying me.

Anyone on absurd payment terms like this?

P

With respect, there's really no excuse getting caught like this even if things did happen quickly. 'I generally only accept weekly invoicing, what are your payment terms?' is one of the first questions I ask when an agent makes an offer.

That said, my last agent tried to "palm" 60 day terms on me. I wasnt "mason"-ing around with them and told them no way I was accepting that. We eventually agreed on fortnightly billing.