Reply to: Lorien

[stek]

30+ day terms were relevant when postage took 3-5 days and it took 5 business days for a standard cheque to clear. In this day and age when payment can be made very easily and quickly and in an automated fashion I see no reason for terms to exceed 14 days. You've done the work, the client presumably has the funds available. Why on earth shouldn't you be paid within a week?

FYI my proper professional services clients have no issues with 14 day payment terms - one paid late once, I sent them a reminder and they've always paid on time since for any other ad-hoc or project work I've completed for them. B2B - no agencies.

If you google "Accountancy Invoicing Best Practice" it appears most businesses are very accepting of 14 day terms, with some places suggesting that even 7 is becoming more widely accepted.

Why is it acceptable to give a client 30 day terms and suffer the exposure?

You're living in cloud-cuckoo land mate, it's not a matter of what's acceptable, it's business, get money in as early as possible, pay money out as late possible.

Doesn't really apply to contractors though, since the out of the agents fees come some level of factoring.

[stek]

What did you used to do with the pension money?

Used it as cash flow, spent it, never got cash in, went bust, lost it, everybody laid off, company went bust, got a a new job.
This was about 1990, before you had to ring fence such monies.

[mattfx]

Thanks for posting your experiences SE.

[SueEllen]

Sorry - I posted a smidgen before you added the link.


Would depend on a number of things; whether I had any other opportunities in the pipe, was on the bench or not and what the war chest looked like. Obviously I wouldn't turn down work if I had nothing else on - for the most part something is better than nothing (although there are exceptions to that like the helpdesk / infrastructure post on here recently). However if I was in a position of strength during negotiation, then I would absolutely argue for 7 day invoicing.

I've had 7 day invoicing in the past. Unfortunately finding the person to approve my timesheet every 7 days which I had to do in person was a PITTA as he was frequently on another site. So I tended to have 2 invoices paid every 14 days.

In regards to 30 day terms - with one agent, who isn't a prize a-hole, I discovered that while I was invoicing every month and being paid within 7 days he could only invoice the client every 90 days.

With clients who use 30 days I have walked when they have paid late.

[mattfx]

Read the link I posted above.

Sorry - I posted a smidgen before you added the link.

I assume next time you get a mandated 30 day term in a contract you'll be turning it down

Would depend on a number of things; whether I had any other opportunities in the pipe, was on the bench or not and what the war chest looked like. Obviously I wouldn't turn down work if I had nothing else on - for the most part something is better than nothing (although there are exceptions to that like the helpdesk / infrastructure post on here recently). However if I was in a position of strength during negotiation, then I would absolutely argue for 7 day invoicing.

[northernladuk]

I answered your question - I wanted to know why you think 30+ day terms are acceptable - not why my agent / client thinks so

Read the link I posted above. I don't really like them but I'm not going round saying it's unacceptable. It happens. With the right client and agent and some diligence it's not really a problem. It's likey the agent is on worse. It's just business.

I've been on longer terms more than not over my 10 years and not a hiccup to date.

I assume next time you get a mandated 30 day term in a contract you'll be turning it down

[mattfx]

Ask them when it's in your contract. You will come across it regularly even with agents... And they are probably factoring that as well.

I answered your question - I wanted to know why you think 30+ day terms are acceptable - not why my agent / client thinks so

[northernladuk]

Why is it acceptable to give a client 30 day terms and suffer the exposure?

Ask them when it's in your contract. You will come across it regularly even with agents... And they are probably factoring that as well.

There are many reasons business have long payment terms.

https://mobile.nytimes.com/2015/04/0...suppliers.html

[SueEllen]

30+ day terms were relevant when postage took 3-5 days and it took 5 business days for a standard cheque to clear. In this day and age when payment can be made very easily and quickly and in an automated fashion I see no reason for terms to exceed 14 days. You've done the work, the client presumably has the funds available. Why on earth shouldn't you be paid within a week?

FYI my proper professional services clients have no issues with 14 day payment terms - one paid late once, I sent them a reminder and they've always paid on time since for any other ad-hoc or project work I've completed for them. B2B - no agencies.

If you google "Accountancy Invoicing Best Practice" it appears most businesses are very accepting of 14 day terms, with some places suggesting that even 7 is becoming more widely accepted.

Why is it acceptable to give a client 30 day terms and suffer the exposure?

Lots of companies do things once a month.

For one of my clients it was the PM who did the bank transfers which she did once a month for all the projects she was involved in.

[mattfx]

Why isn't it? Lucky you aren't direct or have a proper B2B contract. You could be looking at 60 days plus.

30+ day terms were relevant when postage took 3-5 days and it took 5 business days for a standard cheque to clear. In this day and age when payment can be made very easily and quickly and in an automated fashion I see no reason for terms to exceed 14 days. You've done the work, the client presumably has the funds available. Why on earth shouldn't you be paid within a week?

FYI my proper professional services clients have no issues with 14 day payment terms - one paid late once, I sent them a reminder and they've always paid on time since for any other ad-hoc or project work I've completed for them. B2B - no agencies.

If you google "Accountancy Invoicing Best Practice" it appears most businesses are very accepting of 14 day terms, with some places suggesting that even 7 is becoming more widely accepted.

Why is it acceptable to give a client 30 day terms and suffer the exposure?

[northernladuk]

28 days is luxury, back in my accountancy days we could easily string out paying little people after 90 days and 120 not unheard of.

One of the reasons I’d never go direct...

We’d do all sorts, rubbing the magnetic numbers on the cheque going out so they couldn’t use the automatic machine, might get you an extra day, and rubbing the back with wax so they couldn’t stamp or write on it - another day.

If cash flow demanded it we’d adopt the old deliberately transposing figures ‘in error’ so they didn’t match the written amount. Could get a few days with that one but wise not to use it too often.

Don’t start me on what we used to do with the pension money...

What did you used to do with the pension money?

[stek]

Why isn't it? Lucky you aren't direct or have a proper B2B contract. You could be looking at 60 days plus.

28 days is luxury, back in my accountancy days we could easily string out paying little people after 90 days and 120 not unheard of.

One of the reasons I’d never go direct...

We’d do all sorts, rubbing the magnetic numbers on the cheque going out so they couldn’t use the automatic machine, might get you an extra day, and rubbing the back with wax so they couldn’t stamp or write on it - another day.

If cash flow demanded it we’d adopt the old deliberately transposing figures ‘in error’ so they didn’t match the written amount. Could get a few days with that one but wise not to use it too often.

Don’t start me on what we used to do with the pension money...

[ascender]

Ask them? If they are on a fixed percentage they shouldn't have any problems telling you. Probably near as dammit around 6%. A little up or down from that won't really make much difference.

I’ve asked for a meeting next week so will ask them, but good to be forearmed with a bit of info. I’m sure they will attend a pay lip service but I might as well try. Cheeky gits didn’t even find me the position in the first place....

[northernladuk]

My current agency Monarch had a nice payment scheme - Invoiced weekly for the first five weeks of the contract (paid at the end of the week following invoice) and then after week 5 moved to monthly payments.

Whenever I do professional services work during evenings and weekends I use 7 or 14 calendar day terms. 28 days to pay an invoice isn't acceptable in my opinion.

Why isn't it? Lucky you aren't direct or have a proper B2B contract. You could be looking at 60 days plus.

[mattfx]

My current agency Monarch had a nice payment scheme - Invoiced weekly for the first five weeks of the contract (paid at the end of the week following invoice) and then after week 5 moved to monthly payments.

Whenever I do professional services work during evenings and weekends I use 7 or 14 calendar day terms. 28 days to pay an invoice isn't acceptable in my opinion.