Agency change of payment terms

[TykeMerc]

Thats for suggestion - plan to stand firm on the 7 day and see what they come back with.

FYI, I did an Experian credit search and they are certainly a mixed bag with a worsening payment pattern and Experian rate them as high risk (on the cusp of maximum risk) mixed with a handful of positives..

That alone would make me give them an emphatic no with absolutely no room to negotiate. Under no circumstances would I agree a negative change to payment terms and any lateness would see them put on stop immediately with breach of contract action following rapidly, I'd put that in writing too.

I would also say since you know the client so well that a subtle word would be wise.

It's your business risk and up to you to manage it, with what you describe I'd be ultra cautious.

[Boney M]

Get out of there and use another agency on the clients approved list

[Gordon Ice]

- First reaction would be to tell them to jump and kiss my royal a**
- Once I'd calmed down I'd be busy negotiating the newly proposed terms to something I am comfortable with (e.g. fortnightly billing); it's all about how much exposure you're willing to take against the risk the Agency goes bust. PCG Plus offers you some cover for this scenario and is IMHO worthwhile.
- Be careful of the usual trick of the Agency offering 30 days with monthly invoicing - at its worst this is essentially 60 days payment terms :-(
- Worst case if you have no other option than to accept 30 days terms insist on weekly invoicing

And about those late payments, I suggest you get busy with some kind of credit control and demonstrating that you aren't prepared to take sh*t. Read up on the Late Payment legislation and get busy rattling their cage - https://www.gov.uk/late-commercial-p...-debt-recovery

Think like a business, act like a business.

[Safe Collections]

Thats for suggestion - plan to stand firm on the 7 day and see what they come back with.

FYI, I did an Experian credit search and they are certainly a mixed bag with a worsening payment pattern and Experian rate them as high risk (on the cusp of maximum risk) mixed with a handful of positives..

Good to see you already pulled a report, it certainly sounds like the agency has significant problems. Are you locked into the contract in any way or can you use a different agency? If you are locked in it might be possible to use the increased risk as a means of negotiating your way out...

If they have not met the payment terms in the contract, the contract is void.

Actually it is our understanding that late payment in and of itself, does not necessarily give rise to a breach of contract. In an ideal world you would need to have the entirety of the contract reviewed to ascertain if a breach has occurred. Just so you know

[JoJoGabor]

THis has all the signs of them about to go pop, so there is probably more than a 50% chance you will lose money. If they have not met the payment terms in the contract, the contract is void. I would have a word with the client and ask to move to a different agency.

Don't go more than 7 day payment terms at all, I would even ask for a rate increase stating you've done a credit check and the risk has gone up with dealing with them, and make sure you have PCG+ insurance.

[eek]

WSCS

Emphasis that you won't accept any change in payment terms and that they have already been late a few times.

Then the next time they are late with payment extract yourself from the contract and move to another agency...

[SneakySimon]

Credit Check

Thats for suggestion - plan to stand firm on the 7 day and see what they come back with.

FYI, I did an Experian credit search and they are certainly a mixed bag with a worsening payment pattern and Experian rate them as high risk (on the cusp of maximum risk) mixed with a handful of positives..

[Safe Collections]

1. My bank pays agency immediatly on my timesheet being approved
2. In the past 6 months, majority of payments to me from agency have been late - variety of excuses
3. The agency moved office - I am no real estate expert but certainly to what seem to be cheaper offices

You are absolutely right to have some concerns with this proposed change to the agreed terms, as any one of the points above would likely be an indicator of cash flow problems. But all three together means it is a virtual certainty that something serious is amiss.

We would not recommend any increase in credit terms at all based on what you have said. The agency agreed 7 days in the contract so if they want to change these to your detriment then they need to be offering you something significant, such as an increase in your rate.

Problem is, if they do have cashflow issues they could agree an increase and then go pop, thus never paying you anything anyway.

As others have said PCG do have agency default cover, but our understanding is that it is not retrospective, so you would need to check it covered you in this instance. If it does cover you it would cover £7.5k eventually, so does mitigate some risk.

Credit insurance is unlikely to be useful, as no credit insurer will cover an invoice to any company that isn't rock solid financially.

Can't you leverage you long time commitment to the client to keep your payment terms as they are? Or go direct/elsewhere and stay with client co?

If you want to PM us the agency name we are happy to have a quick look for anything untoward

[kevpuk]

<snip>
1. My bank pays agency immediatly on my timesheet being approved
<snip>

What others ^^ have said......

To me, a particularly worrying part of what you have said is that the Client is paying Agency immediately on approved timesheet, so there can be very little argument as to why the Agency cannot pay you more or less immediately.
I guess we can objectively understand why an Agency has longer payment terms to reflect delay in funds from Client(s), but when the dosh is in their hands anyway there is no sensible reason not to pay you straight away!

[DirtyDog]

If the contract says seven day payment terms, then that's what they are legally obliged to stick to. If they want to change that, then they need to negotiate.

Personally, unless there was an increase in the rate that they are paying (and make sure it's not being passed onto the client), I don't see why I should increase my business risk to help them. They agreed the contract, they either need to stick to it, terminate it or pay me a premium to agree a new one.

If it was the other way round (they agreed 30 day terms and you suddenly said you wanted 7 day terms because that's what your systems require), they'd be more than happy to tell you where to go, so I'd do the same.

They aren't going to get rid of you, piss of the client, and kill the golden goose just because you think they should stick to what they agreed.

Point out that they keep paying late, and so that sets alarm bells ringing. Point out that you should really be charging them interest and penalties for late payment, but have let it slide so far.

Put briefly - refuse.

[jmo21]

They refused to move to weekly - there systems don't accodate apparently

bollocks!

[SneakySimon]

Thanks

Some ideas:

1 Get a credit check on agency.
Just done that, seem ok though thats up until mid August 2012

2 Join PCG plus for cover (7.5k?) in case agency fails.
Looks good - I remeber seeing this on a differnt thread but was searching for the wrong name - £220 PA seems a pretty good for £7500 of cover.

3 Don't agree. Talk to end client if there's a problem.
On that!

4 Agree but increase your rate slightly.


5. If you are on monthly timesheets and invoices, request a mive to weekly as a quid pro quo.
They refused to move to weekly - there systems don't accodate apparently

6. Move on. Aren't you bored yet?

Haha - getting that way but it is steady work with good pay and I am able to WFH which is great as I have a 2hr commute - fairly rare situation in the City!

[northernladyuk]

Some ideas:

1 Get a credit check on agency.
2 Join PCG plus for cover (7.5k?) in case agency fails.
3 Don't agree. Talk to end client if there's a problem.
4 Agree but increase your rate slightly.
5. If you are on monthly timesheets and invoices, request a mive to weekly as a quid pro quo.
6. Move on. Aren't you bored yet?

[kingcook]

What does it say in the contract about payment terms?

If you originally agreed to 7 days (and it's stated in the contract) and they want to change it to 30 days, that's a change of contract.

Perhaps you could start chaging them interest from a previously agreed timescale?

Does the contract say that they can change the payment terms from time to time? I wouldn't know if that were legal or not.

It happened to me a couple of years ago, although not a big of a gap between changes. I just agreed to it because it was my last payment of the contract anyway.

If I had reason to believe that the agency had cash flow problems, I would probably not agree to a change such as this.

IANAL.

[SneakySimon]

Hi, question people may be able to offer some advice on.

Been in current contract for 3.5 years. The current payment terms are 7 business days from timesheet / invoice submission.

The agency now want to change that to be 1 month payment terms so January would be paid to me 6th March etc

Had a number of reasons / excuses from them but I am slightly uncomfortable for the following reasons:

1. My bank pays agency immediatly on my timesheet being approved
2. In the past 6 months, majority of payments to me from agency have been late - variety of excuses
3. The agency moved office - I am no real estate expert but certainly to what seem to be cheaper offices

My concern is that they have cashflow issues hence the change to payment terms so my risk is increasing with the month dalay.

Anyone any ideas - I am loathe to leave the role I am in as it is well paid and I enjoy it. I have reviewed my options and I see the following:

* Try to negotiate with agency though doubt they will help
* Take out invoice insurance - presumably expensive?
* Speak to bank HR as i know in past some have been moved onto Reed

Any other suggestions would be appreciated.