Payment dependent on contracting company receiving payment first

[LondonManc]

A few years ago, I jumped on a new contract close to home after being on the bench for a while, quickly running out of cash.

The project was ill advised, the client was useless and things were going south quickly - and then I submitted my invoice for the first months work and was told to check my contract terms (I hadn't properly - big lesson there) that I wasn't going to be paid until the company i was contracted to (a small IT shop, never again) was paid themselves.

The end client would not pay their invoices on time, and started refusing to pay for anything till problems with the project were rectified (not my fault) so I ended up getting increasingly stressed worrying about money and the direction of the project.

I'll NEVER work for small IT shops, or for anyone who won't pay you until they get paid, again. Neither should you.

I'd agree with that for brand new clients for companies. Those with a longer standing relationship with clientco tend to be fine - I've had it where, say, you do February's work, invoice consultancy co for it, they get paid at the start of March and you get paid the day after it hits their account. It's generally six weeks from the end of the month that you get paid, but that's how many businesses operate. If you're running a business, you've got to accept terms like that at times but, as you hint at, you must consider how much risk you're exposed to.

[SlipTheJab]

To me the only benefit of agencies from a contractors perspective is them factoring invoices so you get paid before they do, alarm bells should ring if they can't even offer that while taking their 10-20% margin. Walk away.

[sal]

In general - avoid. But it all comes to managing risk/reward. If the payment term is a week or two (I doubt it is) and you don't have anything else lined up - it might be wort the risk. Anything above that too much of a risk in my book in any case.

[ChrisFromGreece]

Hi all

I have been offered contracting work with a company on a job by job basis, but one term concerns me. It is that my payment for jobs will only be paid to me once payment is received for that job by the contracting company.

Is this common? It seems a bit odd to me that I am being asked to share risk of non-payment and help manage their cashflow - or is this normal?

Cheers

Do you have anywhere a clause in the contract that says that you agree to opt out of the Agency Regulations?

[nucastle]

A few years ago, I jumped on a new contract close to home after being on the bench for a while, quickly running out of cash.

The project was ill advised, the client was useless and things were going south quickly - and then I submitted my invoice for the first months work and was told to check my contract terms (I hadn't properly - big lesson there) that I wasn't going to be paid until the company i was contracted to (a small IT shop, never again) was paid themselves.

The end client would not pay their invoices on time, and started refusing to pay for anything till problems with the project were rectified (not my fault) so I ended up getting increasingly stressed worrying about money and the direction of the project.

I'll NEVER work for small IT shops, or for anyone who won't pay you until they get paid, again. Neither should you.

[SueEllen]

Totally forgot that second bit - and there will be a clause that stops you checking whether the end client has paid the agency or not...

If the company realise clients are slow payers they should give you a longer payment term e.g. 21 or 30 calendar days rather than put you don't get paid if we don't.

As this stops arguments and you going legal/threatening to beat up the agent when you find that the end-client paid their bills promptly because they want you back and told you directly.

[eek]

Run don't walk away from this.

The company will lie to you about not receiving payment when the end-client will have actually paid them.

Totally forgot that second bit - and there will be a clause that stops you checking whether the end client has paid the agency or not...

Personally my viewpoint is that an agency has to do one thing for the money they are earning from me. And that is paying me ASAP regardless of how long the end client takes to pay them...

[SueEllen]

Run don't walk away from this.

The company will lie to you about not receiving payment when the end-client will have actually paid them.

[MrMarkyMark]

I've seen it on contracts before and every time I've continued looking or gone elsewhere...

+1 Avoid, this is how people lose a lot of money

[eek]

Hi all

I have been offered contracting work with a company on a job by job basis, but one term concerns me. It is that my payment for jobs will only be paid to me once payment is received for that job by the contracting company.

Is this common? It seems a bit odd to me that I am being asked to share risk of non-payment and help manage their cashflow - or is this normal?

Cheers

I've seen it on contracts before and every time I've continued looking or gone elsewhere...

[aboylikedave]

Hi all

I have been offered contracting work with a company on a job by job basis, but one term concerns me. It is that my payment for jobs will only be paid to me once payment is received for that job by the contracting company.

Is this common? It seems a bit odd to me that I am being asked to share risk of non-payment and help manage their cashflow - or is this normal?

Cheers