Reply to: Recruitment Agency Not Paying Invoice after 2 months, what to do?

[Safe Collections]

Red for a reason. That's a liquidity issue. It *could* be the case that they're trying it on so they don't have to try as hard to figure out where the money is coming from, but their debts shouldn't be your problem. That said, a friend lost a printing business because his main client went bust with debts outstanding.

Agreed. We have seen many a profitable business sunk by an unexpected bad debt.

[LondonManc]

This would be our view, an offer of an extended credit period in return for payment of the OPs additional fees has been made but not accepted by either party as yet.

If the agency can't or wont agree to pay the fees you have incurred then push for immediate payment as the talk of using the funds for an unrelated legal action makes us very nervous...

Red for a reason. That's a liquidity issue. It *could* be the case that they're trying it on so they don't have to try as hard to figure out where the money is coming from, but their debts shouldn't be your problem. That said, a friend lost a printing business because his main client went bust with debts outstanding.

[Safe Collections]

Exactly - you have effectively said you will agree the new payment terms, if they agree to pay your additional accountant fees. They haven't done that, so there's no reason not to start chasing the debt.

This would be our view, an offer of an extended credit period in return for payment of the OPs additional fees has been made but not accepted by either party as yet.

If the agency can't or wont agree to pay the fees you have incurred then push for immediate payment as the talk of using the funds for an unrelated legal action makes us very nervous...

[NotAllThere]

If your reply is the very last email on the subject, the agency has neither accepted that they will pay your accountancy fees, nor is there anything in there to say that you have accepted their payment date. Search for dunning process and get it started.

Exactly - you have effectively said you will agree the new payment terms, if they agree to pay your additional accountant fees. They haven't done that, so there's no reason not to start chasing the debt.

[jmo21]

But now that I have to wait for this invoice to be paid it means I have to keep my company trading and hence pay my accountant the monthly fee which I wouldn't have done had I been able to make it dormant in December.

Was December your company year end?

If not, then you would not necessarily "save" a couple of months accountancy fee, your accountant allows you to pay their whole fee for the year split into 12 monthly payments for convenience.

You might be able to agree a reduced percentage if you do not work the whole year, but also may well be paying the whole lot.

[LondonManc]

Ok, thanks for the quick replies.

The thing is that I didn't explicitly say "I accept that you can pay me at some point before the 28th Feb" but instead the emails went like this:

From the agency director:
"The remainder of the cash owed to you (c£7k) will be paid to you no later than 28th February."

My reply:
"Please let me know that you accept that you will pay my monthly accountancy fees for every month that this invoice remains unpaid from 01/01/2017. So if the invoice was paid in February then I would need two months worth of accountancy fees."

Have I implicitly accepted that he can pay me anytime until the 28th Feb?

EDIT: I left this contract (on amicable terms with the client) in order to go back to permanent work so this was the final invoice to the agency. The client is fully aware of whats going on and has stopped working with the agency because of their dishonesty.

If your reply is the very last email on the subject, the agency has neither accepted that they will pay your accountancy fees, nor is there anything in there to say that you have accepted their payment date. Search for dunning process and get it started.


I presume that you want accountancy fees because they're coming out of the 7k fee to wind up your limited co?

[northernladuk]

I guess that does seem a bit random without explanation but the reason for asking them to pay accountancy fees is that I quit that contract (giving proper notice and on good terms with the client etc.) in order to go back to permanent work. Because of that I was going to have my accountant pay off all my vat, corp tax etc and make my company dormant since I'm not going to be using it anymore. But now that I have to wait for this invoice to be paid it means I have to keep my company trading and hence pay my accountant the monthly fee which I wouldn't have done had I been able to make it dormant in December.

Sadly sometimes that is the price of doing business. Being paid late isn't uncommon but you can't just throw any old thing in. If you are going to put pressure on an agent it has to look serious. Quote late payment acts, follow well know procedures to get it back on so on. Chucking your accountant fees in looks like you don't know what you are doing so they are just going to laugh it off and take no notice. If you are going to get rather sharp responses to that comment on here how seriously so you think the agent is going to take it?

[SueEllen]

This is the crux of what I'm asking. By muddying the waters with the "accountancy fee thing" does this mean that I definitely have wait until the end of February? Like if I got a debt collection agency to contact them tomorrow will they just respond and say "we told him we'd pay by the 28th feb" and then the debt collection won't be able to do anything until then?

As stated by myself, WTFH, Bee, RonBW and teapot418 you have given the agent the consent to pay you on 28th February. So you will have to wait until 1st March to chase them for a bad debt if they don't pay by then.

m0n1k3r is presuming your contract states they won't pay you until they get paid but none of my contracts state this, and even if it does because you didn't inform the agency they should pay you as per your contract but told them to pay your accountancy fees, you can chase them now but they may just tell you to feck off.

Oh and the debt collector to use is Safe Collections who frequently posts on here.

[SueEllen]

Yes ok, I might have been a fool if thats what you'd like to call me but I'm a programmer by trade, not a businessman, and had only been contracting for around half a year. Mistakes were made and now I have to deal with them which is why I've started this thread.. Though I guess lets just hope somebody else in a similar situation might read all of your "you should have.." advice and benefit from that at least

If you are a contractor you need to be a businessman or businesswoman as well. In fact if you are a business person first you will get contracts which people with better programming or whatever skills don't get due to their way of thinking.

For starters HMRC doesn't care if your accountant screws up your company accounts, your VAT return or steals all your money so you can't pay them as it is ultimately your responsibility to ensure your business is in good order. Likewise judges don't either if you end up having to go before them for any reason.

This is why when people first appear on the forum saying they are new we point them to the links on CUK navigation (which is over there -->) and tell them to read them.

In future if you don't really know what to do especially when you are replying to people by email, research first and then answer. And we have had people coming here asking about chasing debts many many times. Unlike you they don't make the mistake of giving agents time to not pay them.

[chuck32]

Thanks again for the feedback everybody.

Why have you asked them to pay your accountancy fees? I'm struggling to see the link between not getting paid what you are owed and a completely unrelated business expense that you were going to incur anyway.

I guess that does seem a bit random without explanation but the reason for asking them to pay accountancy fees is that I quit that contract (giving proper notice and on good terms with the client etc.) in order to go back to permanent work. Because of that I was going to have my accountant pay off all my vat, corp tax etc and make my company dormant since I'm not going to be using it anymore. But now that I have to wait for this invoice to be paid it means I have to keep my company trading and hence pay my accountant the monthly fee which I wouldn't have done had I been able to make it dormant in December.

As others have said, google payontime for sample letters. You can charge interest on late invoices, however you have muddied the waters with the accountancy fee thing.

If you're an IPSE+ member, you have protection in case of non-payment. It does sound like you need to wait till the 28 Feb though.

This is the crux of what I'm asking. By muddying the waters with the "accountancy fee thing" does this mean that I definitely have wait until the end of February? Like if I got a debt collection agency to contact them tomorrow will they just respond and say "we told him we'd pay by the 28th feb" and then the debt collection won't be able to do anything until then?

And no I'm not an IPSE+ member.

More fool you.
You should have sent an email stating something like:
...

Yes ok, I might have been a fool if thats what you'd like to call me but I'm a programmer by trade, not a businessman, and had only been contracting for around half a year. Mistakes were made and now I have to deal with them which is why I've started this thread.. Though I guess lets just hope somebody else in a similar situation might read all of your "you should have.." advice and benefit from that at least

[m0n1k3r]

Hi, I'm an IT contractor who was working for a client via a recruitment agency. I'm working under my own limited company. The client would pay the agency and the agency would take their cut and then pay me. However for the final invoice which was just shy of £7k, the client paid the agency for my work but the agency never paid me.

It turns out they used that money to pay for their own legal fees for a completely unrelated court case. This invoice was due to be paid on 01/12/16 so currently its around 2 months late. One of the directors at the agency emailed me in December to say they would be paying me the full amount of the invoice by 28th Feb. I then replied asking if he would agree to pay me my monthly accountancy fees for every month that the invoice remains unpaid and he responded in agreement. The problem is that for various reasons I don't trust that they are making an effort to pay me back by 28th.

So my question is, given that the director has told me he will pay me by the 28th Feb, is it still possible to take legal action against them using a solicitor? i.e. sending a letter-before-action or something similar.

Any help would be much appreciated. Cheers

Since they've already been paid, if they haven't responded, have a solicitor such as Business Debt Collection & Recovery Solicitors | Thomas Higgins Limited send them a late payment demand letter, then submit to the small claims court 2-3 weeks later (7 days as is generally suggested is simply not enough time).

It is an EU directive, and one that I hope the UK won't abolish.

[teapot418]

As others have said, google payontime for sample letters. You can charge interest on late invoices, however you have muddied the waters with the accountancy fee thing.

If you're an IPSE+ member, you have protection in case of non-payment. It does sound like you need to wait till the 28 Feb though.

[SueEllen]

In future credit check both the agency and client.

Also google the directors of the agency and client if they haven't been around for a long time.

Then also look at the previous companies the directors of the agency and client have run.

[SueEllen]

Ok, thanks for the quick replies.

The thing is that I didn't explicitly say "I accept that you can pay me at some point before the 28th Feb" but instead the emails went like this:

From the agency director:
"The remainder of the cash owed to you (c£7k) will be paid to you no later than 28th February."

My reply:
"Please let me know that you accept that you will pay my monthly accountancy fees for every month that this invoice remains unpaid from 01/01/2017. So if the invoice was paid in February then I would need two months worth of accountancy fees."

Have I implicitly accepted that he can pay me anytime until the 28th Feb?

EDIT: I left this contract (on amicable terms with the client) in order to go back to permanent work so this was the final invoice to the agency. The client is fully aware of whats going on and has stopped working with the agency because of their dishonesty.

More fool you.


You should have sent an email stating something like:

Dear agency director,

In reference to your email stating my full invoice will not be paid until 28th February 2017, I need to make it clear that I am not interested in your internal affairs and will expect your full payment as per our contractual agreement on 31st December 2016.

regards,
chuck32

Then you shouldn't have engaged any further.

Once the invoice is late you should have done Dunning. (Google it if you don't know what the term means.)


Agencies can do invoice factoring so they pay you before they get paid. This is part of the reason they take commission of our payments.

[SussexSeagull]

If money is that tight for the agency I wouldn't give them any breathing space.