Reply to: Payment terms

[Hobbes]

I did a gig using RealStaffing last year. Payment terms were: submit invoices weekly - first payment after 28 days of first invoice, then weekly payments after that.

Also found out they were taking a huge margin (~48%) but that's another story...

[Scrag Meister]

1st contract, self billed weekly on Tues, paid Fri
2nd contract, invoice monthly paid wthin 4 days
3rd contract, self billed monthly, paid by 26th of the next month, i.e. approx 21 days lag.

Seems my payment terms are going downhill.

[SueEllen]

I know that payment terms are negotiable but as yet have never had to do it but whats to stop the agency just saying 'we only run one payment run a month' I could not say whether that's true or not so how could you argue that I would just have to accept it.

Nothing.

Though I doubt a large agency even if they have contractors who all invoice monthly, runs one pay run a month.

They likely do the invoicing monthly because it's easier for them i.e. in matching up your invoice to theirs with the client.

Though doing weekly timesheets indicates they could easily do weekly pay runs as many weeks in the year span more than one calendar month.

[Wanderer]

nothing has been signed! I got an offer...and I accepted verbally but not signed anything. but now its the negotiating terms that are under way right now.
they said the client pays the agency 45 days. the agency pays contractors 28 days - which is fair enough but still no reason for not asking the agency to pay weekly since after all they are a big agency (£££)

The payment terms between the agency and the client are not your concern. The only thing an agency does once it's introduced you to the client is to factor the payments so they can just get on with it.

If you could get 7 day payment terms on a weekly invoice then go for it but 14 day terms and invoice weekly is a pretty reasonable arrangement in my opinion. There is no reason why a reasonably sized agency can't run weekly invoicing and payments.

[pmeswani]

It's quite simple, you make it clear what your terms are for accepting the contract, if they won't (can't would be a lie from the agent) meet them then you politely decline to accept the contract and find another one.

WHS. Obviously you have to negotiate what is acceptable to you. If the agent won't budge, walk away from the contract. There's always a choice when it comes to negotiation. Accept the terms, negotiate more favourable terms or walk away if you can't get a mutually accepted terms and conditions.

[TykeMerc]

I know that payment terms are negotiable but as yet have never had to do it but whats to stop the agency just saying 'we only run one payment run a month' I could not say whether that's true or not so how could you argue that I would just have to accept it.

It's quite simple, you make it clear what your terms are for accepting the contract, if they won't (can't would be a lie from the agent) meet them then you politely decline to accept the contract and find another one.

[robin]

I know that payment terms are negotiable but as yet have never had to do it but whats to stop the agency just saying 'we only run one payment run a month' I could not say whether that's true or not so how could you argue that I would just have to accept it.

[TykeMerc]

Thanks.

but its just a bit of common sense and logic - there is no real reason for such a big company to hold the funds if other agencies can do it weekly, why cant they?

lets see how it goes

Of course they can do it, they simply prefer not to and will only pay quickly if they're forced to by contract terms agreed.
They're adopting a commercial position of taking as long to pay as they can negotiate, that's common sense and logic from their viewpoint.

[firehawk]

Thank-you. I appreciate that

[TykeMerc]

Thanks

nothing has been signed! I got an offer...and I accepted verbally but not signed anything. but now its the negotiating terms that are under way right now.

they said the client pays the agency 45 days. the agency pays contractors 28 days - which is fair enough but still no reason for not asking the agency to pay weekly since after all they are a big agency (£££)

Ah well if there's no contract yet then payment terms are up for negotiation, your first post implied the contract was running already.
If longer than 7 or 14 days is unacceptable to you then make it clear that you simply won't accept the contract with payment terms that you don't like.

How long the client takes to pay the agency is irrelevant and if they mention it in the negotiation politely remind them that your commercial relationship is with the agency not the client.

[firehawk]

it would be an internal (not outsourced) accounts that they have. if other agencies can do it - doesnt make sense why they can't But i know what you are talking about

[pmeswani]

Thanks.

but its just a bit of common sense and logic - there is no real reason for such a big company to hold the funds if other agencies can do it weekly, why cant they?

lets see how it goes

They aren't hiding / witholding funds. To do a payment run, it would probably cost them money to process the batch transaction. (I don't know the cost, so I won't give figures). If they increase the number of transactions they have to make, they will have to pay more in payment fees. Why would any company want to pay more transaction / payment fees? I don't know if your agent does payment runs internally, or if they have outsourced it. I also don't know what bank / transaction fees they have to pay.

HTH.

[firehawk]

Thanks.

but its just a bit of common sense and logic - there is no real reason for such a big company to hold the funds if other agencies can do it weekly, why cant they?

lets see how it goes

[pmeswani]

Sure

well some business gotta learn! funny thing is just had a phone call from the same company but different location but for the same client and different location and she said that it maybe possible to change it to 14 days... as for 7 days it can be done but must be given to the MD for approval (but cannot as he is not in the country!)

If you really have to have 7, you could always tell the agent that you are happy to wait for the MD to approve it. You might be surprised how quick they can turn it around. If you can live with 14 days, then I would take it rather than negotiate further down, especially if you don't need to.

[firehawk]

Sure

well some business gotta learn! funny thing is just had a phone call from the same company but different location but for the same client and different location and she said that it maybe possible to change it to 14 days... as for 7 days it can be done but must be given to the MD for approval (but cannot as he is not in the country!)