How long to wait till getting paid ?

**malvolio** · 24 January 2006, 14:21

Does nobody ever do any homework? "Hey, let's leap off this cliff and see what happens..."

Ask your umbrella. The only real-world benefit to having agencies or umbrellas in the loop is that they pay you whether or not the client has paid them. So assuming you've already got an umbrella in mind, you should know the answer. If you haven't, well there's another selection criterion to use.

If you're between contracts, there isn't a cashflow problem - no cashflow, no problem. Getting money into your personal bank account then is an exercise I leave to the reader (for now) but as a hint, it requires a bit of forethought and reserves of cash. Living to your means is probably not a wise move, which is why us greedy contractors charge more per hour than permies.

Usual advice (yawn... again) Read the guides here and on the PCG website (especially the PCG website - and think about joining them). Then bring any other questions back here and try again.

**freshblue** · 24 January 2006, 14:22

Are you going Direct? If so be careful to negotiate a decent payment term. If you are using an Agency then they will generally pay within a few days of receipt of timesheet and invoice (with the latter coming from your brolly). Most Agenices also have payment schedules so you can work your finances around that too.

The Agency or client will then pay the umbrella and they will pay you. If you are working Monthly then assume an extra 7-10 days and about 5 days more if weekly (accounts for onward processing and BACS). A decent brolly will turn the payment around the same day they get paid and some even pay same day into your account.

The issue will be if you are direct and they stick to the usual "corporate" 30 days or whatever.... usually contractors are paid more quickly for obvious reasons.

**el duder** · 24 January 2006, 14:25

cash injection

not so sure about cash injection..

but if you need a meat injection i know someone who can help you out.

**BillHicksRIP** · 24 January 2006, 15:54

Nathan - pick your umbrella wisely. I was in the same boat as you, but stupidly signed with Prosperity4 after leaving my permie job. By the end of the second month I'd had only £400 of my earnings (at £35 p.h.) out of these scumbags, due to them only paying monthly, and refusing to give me an iterim payment. Before I signed, they'd assured me an interim payment between their regular monthly payment cycle would be no problem, as I was worried, as you are now, about the gap between permie wage, and contractor payments. To make things worse, all this was happening over Xmas, so I ended up 2K overdrawn, and 4K on the credit card. I made it through by the skin of my teeth, and nearly lost everything thanks to Prosperity4.

Look for an agency that pays weekly, and ask them to put in writing when you'll receive your first payment.

**Jakes Daddy** · 24 January 2006, 15:54

Originally posted by el duder

if you need a meat injection i know someone who can help you out.

Thanks for the offer, but I'm more of a giver than a reciever; and when giving I tend to avoid back door mishaps. Call me picky, but just the way I am !

**Rebecca Loos** · 24 January 2006, 15:58

Ask your umbrella. The only real-world benefit to having agencies or umbrellas in the loop is that they pay you whether or not the client has paid them

Have you ever come across an umbrella that pays you whether they have been paid by the agency or not?
Doubt it

Agencies, yes. Umbrellas, no.

**boredsenseless** · 24 January 2006, 16:01

Originally posted by BillHicksRIP

Nathan - pick your umbrella wisely. I was in the same boat as you, but stupidly signed with Prosperity4 after leaving my permie job. By the end of the second month I'd had only £400 of my earnings (at £35 p.h.) out of these scumbags, due to them only paying monthly, and refusing to give me an iterim payment. Before I signed, they'd assured me an interim payment between their regular monthly payment cycle would be no problem, as I was worried, as you are now, about the gap between permie wage, and contractor payments. To make things worse, all this was happening over Xmas, so I ended up 2K overdrawn, and 4K on the credit card. I made it through by the skin of my teeth, and nearly lost everything thanks to Prosperity4.

Look for an agency that pays weekly, and ask them to put in writing when you'll receive your first payment.

Never ever go contracting without a safety net behind you. Contracts can fall through, clients might not pay, payments may be delayed due to errors in invoices or just the old fashioned 'Our b@lls are bigger than yours' mentatility that some big corporates take.

If you invoice monthly and can realise that invoice as cash in the company account within 40 days of sending it you are doing well. I work on 30 days with every company I do business with, and even with chasing and a good relationship with the accounts department it never gets paid before at least 30 days have passed.

Remember that even if a company says 7 days or 30 days it actually is meaningless - what matters is when they actually pay, yes they will be late but until you get to the point of issuing proceddings they can just settle up at any time and avoid court. Thats why at least 3 months outgoings in the bank is a basic starting point to contracting and I would suggest much more if you want to feel comfortable.

BEFORE the flamers jump on me - I'm not saying that any of the above is right and I agree companies should play fair with their small suppliers but the sad fact is most don't and its only fair that the questioner should be aware of the risks you take as a contractor

**Jakes Daddy** · 24 January 2006, 16:03

Originally posted by freshblue

Are you going Direct? If so be careful to negotiate a decent payment term.

I will be going direct, as the potential client is a company I already have a relationship with and have already spoken with them about contracting for them. If this takes off, I will take your advice and negotiate the payment term accordingly.

Originally posted by BillHicksRIP

Nathan - pick your umbrella wisely. I was in the same boat as you, but stupidly signed with Prosperity4

I have looked at P4, but decided against them for a number of reasons; but primarily because they dont publish their rates anywhere, and when I asked them they said "get your contract, then talk to us and we'll work it out". I smelt a rat (sounds like its based on a faily high percentage), so decided against them.

I am almost decided on Parasol - is this a good choice ?

Cheers

Nathan

**boredsenseless** · 24 January 2006, 16:04

Originally posted by Jakes Daddy

I will be going direct, as the potential client is a company I already have a relationship with and have already spoken with them about contracting for them. If this takes off, I will take your advice and negotiate the payment term accordingly.

I have looked at P4, but decided against them for a number of reasons; but primarily because they dont publish their rates anywhere, and when I asked them they said "get your contract, then talk to us and we'll work it out". I smelt a rat (sounds like its based on a faily high percentage), so decided against them.

I am almost decided on Parasol - is this a good choice ?

Cheers

Nathan

How big is the company you are going direct with? If you have a decent relationship with them and then suddenly you stick a faceless umbrella in the middle they might get a bit miffed.

How long to wait till getting paid ?