Changed payment terms

[tranceporter]

Just had an email from the agency:

Hi Guys,

Just so there is no confusion and as detailed in previous emails from our accounts team, the payment terms for deadlines are detailed above in the PDF document for the next 4 months.

Essentially, the deadline is on the 2nd working day, to be paid on the 30th working day. This is because we are moving towards an electronic timesheet system that will make it easier for you in future to invoice us. This should be coming into effect in the coming months and I will let you know when this is in place.

Can you confirm receipt of this email please J If you have any questions then please let me know and I will contact our accounts team.

As per current payment terms, I am supposed to raise invoice on the first friday of the new month for the previous month, and get paid on the next friday, which is excellent. I have even worked with agencies having 15 days payment terms. But 30 days in fecking unacceptable! How can they just change it like that
Anyone else here had their payment terms changed mid contract?

[borderreiver]

It's even worse than 30 days ... it says the 30th working day. So that's what, 6 weeks payment terms??

[kingcook]

Can you confirm receipt of this email please J If you have any questions then please let me know and I will contact our accounts team.

Questions:

1) Please point me to the part of our agreement that states you can change payment terms without prior approval from both parties.

2) Are you happy for me to start charging late payment fees and/or interest charges?

3) If you have any questions then please let me know and I will contact our accounts team.

[TheFaQQer]

How can they just change it like that
Anyone else here had their payment terms changed mid contract?

They can't. Remind them of the contract. If they want a new contract, with new payment terms, then you will be open to negotiations about that.

Alternatively, wait until they are late and hit them with late payment interest and penalties. And then tell the client that the agency is in breach of contract.

[northernladuk]

They can't. Remind them of the contract. If they want a new contract, with new payment terms, then you will be open to negotiations about that.

Alternatively, wait until they are late and hit them with late payment interest and penalties. And then tell the client that the agency is in breach of contract.

This is true but haven't we had at least 2 posters in the last couple of months that spotted a clause allowing this and couldn't get it removed? They can do it if it is in the contract.

Late payment isn't breach of contract. You can band it around to scare them but if they will know there is nothing you can do in this case. I am sure they have had more than enough contractors try this one to know their rights I am afraid.

Have you had any problem with this client at all in the past or heard anything detrimental? I have been on 30 days for 2 consultancies in a row and I cannot remember one day they were late in all that time. Might be worth doing a bit of digging about the agency to see what the risk is before throwing teddy out of the cot IMO.

[tranceporter]

It's even worse than 30 days ... it says the 30th working day. So that's what, 6 weeks payment terms??

Nope, it is the 30th of the month and not 30th working day. Thank heavens for that. From the pdf:

Please ensure that your timesheets are for one calendar month from the start of one month till the end of that month and do not cross over into the following month. The deadlines for the next 4 months are as follows:

March 2013 Timesheets
Timesheets and invoices to be submitted by Wednesday 3rd April 2013
Funds clear on Tuesday 30th April 2013

April 2013 Timesheets
Timesheets and invoices to be submitted by Thursday 2nd May 2013
Funds clear on Thursday 30th May 2013

May 2013 Timesheets
Timesheets and invoices to be submitted by Tuesday 4th June 2013
Funds clear on Friday 28th June 2013

June 2013 Timesheets
Timesheets and invoices to be submitted by Tuesday 2nd July 2013
Funds clear on Tuesday 30th July 2013

[tranceporter]

They can't. Remind them of the contract. If they want a new contract, with new payment terms, then you will be open to negotiations about that.

I did ask them to re-negotiate by at least paying weekly instead of monthly, to alleviate the "30 days" payment clause, but apparently their "new automated electronic payment system" can't handle that. Load of bollocks.

[Andy Hallett]

30 days and monthly timesheets is a bit harsh, also they can't unilaterlay change your terms. I presume if you miss the deadline you go another month as they run one payroll? You are building up a large exposure.

The electronic timesheet issue is a red herring. When we put it in we moved from a weekly payments run in UK and Monthly in Europe, to a daily payment run.

[tranceporter]

30 days and monthly timesheets is a bit harsh, also they can't unilaterlay change your terms. I presume if you miss the deadline you go another month as they run one payroll? You are building up a large exposure.

The electronic timesheet issue is a red herring. When we put it in we moved from a weekly payments run in UK and Monthly in Europe, to a daily payment run.

Thanks for that. Just hoping that the agency is not becoming cash strapped. Yup, if I miss the invoice deadline, then it rolls over to the 15th of the next month.

[TheFaQQer]

Late payment isn't breach of contract. You can band it around to scare them but if they will know there is nothing you can do in this case. I am sure they have had more than enough contractors try this one to know their rights I am afraid.

Anything which breaches a contract clause which is valid is a breach of contract.

Whether it is a sufficiently egregious breach to allow for termination of the contract is a different question.