Reply to: First contract, direct with client

[Qdos Contractor]

Hey all

Ok so I've taken the plunge and started contracting, yay! Got my first contract, but it's direct with the client which is making it extra complicated. I've had a look around but still a little confused and I'm hoping for some advise.

1. Contract. I have to supply it. I've read a few posts about it but for the templates they suggest the pages don't exist any more. Can anyone recommend one?

- A few posts suggest getting it checked for IR35 compliance, can anyone recommend someone to do the checking (is this defo required)?

2. Invoicing. Do I invoice weekly? Monthly from when I started? Calendar month? I'm assuming I don't need to get a timesheet signed off or anything, isn't that just for the agency?

3. Payment terms. I'm going to stick 30 (15?) days in and see what they say, is this the right approach?

4. From what I can gather Nixon Williams are crap now, can anyone recommend an accountant with contractor experience? I read through the second half of the sticky but it's mostly complaining.

Sorry for the simple questions, I've read a lot but most of the guides cover this in broad strokes and don't give any examples or recommendations!

Thanks

Hi Talisman

Here is the link to the contract templates everyone has been mentioning: https://www.qdoscontractor.com/ir35/...ract-templates We updated them just last week to reflect GDPR as well

Do make sure you read through the terms though and check that they will accurately reflect how you will be working with your client.

Happy contracting
- Gemma

[tomtomagain]

This is exactly what I was looking for. So, say invoices are submitted on the 1st for the previous calendar month. Perfect. Thanks!

Yep, sticking to 30 days. That's reasonable, any more and they can shove it.

Just thought I'd mention this, although you might have already figured it.

You will be invoicing on the first day of the month for the previous month and then being paid (hopefully) at the end of that month. So you'll need to go around 60 days without receiving payment.
I.e. You bill for May in June and receive it 1st July ( or potentially end of June ). Bill June in July and get paid September.

Also, when you do submit an invoice, double-check that they actually get it and ask them directly if there is anything wrong with it that will prevent payment ( plenty of companies just won't tell you that there is something "wrong" with it until you've missed the payment run ( for example, missing a PO reference off it or having the wrong legal entity on the invoice ).

Once you get the first one through the rest should be plain sailing.

[northernladuk]

He introduced PC, and they adjusted their rate accordingly.

Indeed. I've sent my apology in writing but I haven't paid them all the money they wanted back yet.

[WordIsBond]

Yep, been reading loads about it, definitely outside. To summarise (I haven't had this confirmed with an accountant yet so please go easy!):

If you've been reading about it, you may know more about it than your accountant. Going direct probably decreases the likelihood of an investigation, and few are investigated anyway, but keep your eyes open, and keep a dossier of anything that says "independent" or "not subject to control".

Good luck.

[northernladyuk]

maybe to you it is

He introduced PC, and they adjusted their rate accordingly.

[northernladuk]

Firstly, thank you all for the replies!!! Very helpful. Seems like IPSE and QDOS are very much what I want.

IPSE+ is a no brainer. PI/PL and contract checks via QDOS is up to you but used by a lot of us.

Ahh that's exactly what I was looking for. I'll check them out thank you. Yeah I've been reading a lot around IR35, I'm going to double check everything with my accountant (when I get one) but I think* I'm mostly ok.

Just be careful. Your accountant does your finances. They aren't specialist in contract law or your working practices etc. I'd go to the specialists to be completely OK (or as much as you can be with IR35).

Thanks for that. Yeah I know I get to dictate the terms but I was wondering what was generally 'standard' as it were or for some examples.

I'm surprised you haven't been told to go for 7 days. The idea is to reduce your exposure as much as possible. 30 days is pretty common but plenty of clients pay per week. If the client is big enough I'd be happy to negotiate but no more than 30.
[quote]

Spoon-feeding would be nice But more specifically I was referring to the direct contract guide on the site which suggest the PCGroup but their contracts page just 404s.

PCG is now IPSE. Although you no longer have the links you should be able to find the same information on the IPSE pages.

[pr1]

It's a £100 and that's not what you'll get in your pocket

maybe to you it is

[northernladuk]

if you want me earn to £150 through no effort on either of our parts pm me your name and email and I'll "refer" you to gorilla

It's a £100 and that's not what you'll get in your pocket

[northernladyuk]

if you want me earn to £150 through no effort on either of our parts pm me your name and email and I'll "refer" you to gorilla

£140 and I'll bung the OP back a tenner.

[pr1]

Brilliant, I was thinking about going with Gorilla anyway, that's that confirmed.

if you want me earn to £150 through no effort on either of our parts pm me your name and email and I'll "refer" you to gorilla

[Talisman]

Firstly, thank you all for the replies!!! Very helpful. Seems like IPSE and QDOS are very much what I want.

Go to the IPSE or QDOS pages and have a dig around there. Can't remember the links but there are templates on there.

Yes it is deffo required generally. You'd imagine the IPSE and QDOS templates are fully compliant so shouldn't need checking. Just make sure you don't alter them too much. Do, however, take time to do a lot of reading about IR35 in the meantime. It's not just about ticking boxes.

You get to write the contract so you dictate the terms and see what they say. If you don't feel comfortable just ask them what's best for them and see if you agree. Obviously 90 days in arrears is out of the question.

As above. You get to write the contract so put what you want in.

Second half of sticky? The NW one or the accountant recommendation one. The first post of the accountant recommendation one is all you need really.


You mean they don't feed you the answers. Welcome to contracting and being your own business

Soz, 'advice'

Ahh that's exactly what I was looking for. I'll check them out thank you. Yeah I've been reading a lot around IR35, I'm going to double check everything with my accountant (when I get one) but I think* I'm mostly ok.

Thanks for that. Yeah I know I get to dictate the terms but I was wondering what was generally 'standard' as it were or for some examples.

The accountant recommendation one. Ahh ok, I ignored the first post as it was from 2011, I didn't realise it was kept up to date. Brilliant, I was thinking about going with Gorilla anyway, that's that confirmed.

Spoon-feeding would be nice But more specifically I was referring to the direct contract guide on the site which suggest the PCGroup but their contracts page just 404s.

Don't forget your PI/PL insurance. Normally it's in the contract, not sure about the templates, but I'd be getting it just in case. QDOS also supply this as do a couple of other providers. If you are looking for their templates have a look at PI/PL while you are there.

You've got a LTD company set up I assume?

Setting up the company today. Insurance is on my checklist (loads to do!), perfect I'll go have a look at them.

1) If you're a member of IPSE (which I would seriously recommend), you'll have access to a library of contract templates. Other contractors on this site have used them successfully.

2) Invoicing will be dependent on your negotiation with your client. Monthly invoices (stick to calendar months for simplicity) are likely to be your client's preferred option. However, and this moves us onto point 3...

3) 30 day terms are typical in my experience, but sometimes clients will have anything up to 90 days (and occasionally beyond). Remember that you're sticking this time onto your invoice schedule. If you started today, billed for May on 01/06, with 30 day terms you wouldn't get paid until 01/07. I would recommend not accepting payment terms of more than 30 days if you're billing on a monthly cycle.

This is exactly what I was looking for. So, say invoices are submitted on the 1st for the previous calendar month. Perfect. Thanks!

Yep, sticking to 30 days. That's reasonable, any more and they can shove it.

Is this by chance your former employer? Because if they are letting you come up with a contract, presumably you've got a relationship with them?

I bill monthly, and my contract specifies payment terms of 30 days, beyond that I charge interest at 18% accruing daily. If they choke on that, ask if they were planning to pay you late. They'll say of course not but what if something goes wrong? You say, 'Well, I'm running a business, you know.' Then, you can be Mr Nice Guy and say you'll give them a fifteen day grace period where no interest is payable once every six months, but if it isn't paid by 45 days, interest accrues from day 30.

If you are hurting for cash flow, you maybe shouldn't have made this move, but you can offer them a 2% discount if they pay in 15 days.

Do you know anything about IR35? Are you inside or outside or uncertain?

Not an former employer, no, but someone I used to work with.

That's perfect re: the interest. I'll make sure it's in. Not hurting for cashflow at all, but equally I'm not extending them a 90 days line of credit voluntarily!

Yep, been reading loads about it, definitely outside. To summarise (I haven't had this confirmed with an accountant yet so please go easy!):

-The contract is for specific tasks over a time period so can demonstrate control.
-No set working hours. No line manager. No perks etc.
-Right of substitution.
-Own equipment.
-non exclusive
-Most importantly, my company also gets income from other non-contracting sources (I own a few other tech companies I'll be merging in).

Thanks

[BR14]

Is this by chance your former employer? Because if they are letting you come up with a contract, presumably you've got a relationship with them?

I only work direct myself but have some employees and have worked through an agency for them a couple times now. I do my own contracts, the IPSE template should work fine for you.

I bill monthly, and my contract specifies payment terms of 30 days, beyond that I charge interest at 18% accruing daily. If they choke on that, ask if they were planning to pay you late. They'll say of course not but what if something goes wrong? You say, 'Well, I'm running a business, you know.' Then, you can be Mr Nice Guy and say you'll give them a fifteen day grace period where no interest is payable once every six months, but if it isn't paid by 45 days, interest accrues from day 30.

If you are hurting for cash flow, you maybe shouldn't have made this move, but you can offer them a 2% discount if they pay in 15 days.

Just about everything is negotiable. If there is a provision they don't like, feel free to negotiate it away but expect to get something in return. But make your proposals a little better than you'd be willing to accept, too. If they accept the proposal, you're ahead. If they don't, well, you've left yourself some room to negotiate.

Do you know anything about IR35? Are you inside or outside or uncertain?

WWISBS
and there's nothing worse than them ripping your arm off on a daily rate. , 'cos you know then, you could've got more

[WordIsBond]

Is this by chance your former employer? Because if they are letting you come up with a contract, presumably you've got a relationship with them?

I only work direct myself but have some employees and have worked through an agency for them a couple times now. I do my own contracts, the IPSE template should work fine for you.

I bill monthly, and my contract specifies payment terms of 30 days, beyond that I charge interest at 18% accruing daily. If they choke on that, ask if they were planning to pay you late. They'll say of course not but what if something goes wrong? You say, 'Well, I'm running a business, you know.' Then, you can be Mr Nice Guy and say you'll give them a fifteen day grace period where no interest is payable once every six months, but if it isn't paid by 45 days, interest accrues from day 30.

If you are hurting for cash flow, you maybe shouldn't have made this move, but you can offer them a 2% discount if they pay in 15 days.

Just about everything is negotiable. If there is a provision they don't like, feel free to negotiate it away but expect to get something in return. But make your proposals a little better than you'd be willing to accept, too. If they accept the proposal, you're ahead. If they don't, well, you've left yourself some room to negotiate.

Do you know anything about IR35? Are you inside or outside or uncertain?

[Kevin]

Hello,

Firstly, congratulations on the new gig. It's an exciting time when you land your first contract, so enjoy this time. Onto your questions:

1) If you're a member of IPSE (which I would seriously recommend), you'll have access to a library of contract templates. Other contractors on this site have used them successfully.

WRT contract checking, AFAIK the IPSE ones 'pass', but if there's any negotiation with your client around specific clauses then I'd recommend having it professionally reviewed. There are a few options out there; I have my professional insurance provider assess mine which suits my circumstances (QDOS), but there are other providers available all with different levels of assessment and turnaround times. Again, if you become a member of IPSE you will have access to subsidised contract reviews.

2) Invoicing will be dependent on your negotiation with your client. Monthly invoices (stick to calendar months for simplicity) are likely to be your client's preferred option. However, and this moves us onto point 3...

3) 30 day terms are typical in my experience, but sometimes clients will have anything up to 90 days (and occasionally beyond). Remember that you're sticking this time onto your invoice schedule. If you started today, billed for May on 01/06, with 30 day terms you wouldn't get paid until 01/07. I would recommend not accepting payment terms of more than 30 days if you're billing on a monthly cycle.

4) I'll let others chime in here.

Good luck

-Kevin

[northernladuk]

Don't forget your PI/PL insurance. Normally it's in the contract, not sure about the templates, but I'd be getting it just in case. QDOS also supply this as do a couple of other providers. If you are looking for their templates have a look at PI/PL while you are there.

You've got a LTD company set up I assume?