Originally posted by edison
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Reply to: Small agency and payment terms
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Previously on "Small agency and payment terms"
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Originally posted by heathen666 View Post
That's an excellent tip about the credit report. I was working for an agency who were fairly small, they seemed to only have two or three employees. As I was working for a large PS company I didn't really check out the agency as they were paying on time as agreed (monthly billing with 30 day payment terms). But as soon as Covid hit we weren't paid, which with those terms leaves you approx 45 days down. A week later we all got an email saying the business was no longer trading.
Many years ago my brother lost £20k when an agency he used to sub-contract for (non-IT) informed him they were about to go into administration.
The warning signs had been there with regular excuses that he couldn't be paid until the client paid, indicating severe cash flow problems. More and more invoices got paid later and later and the loss was equivalent to about 60 days worth of work.
All his work had come through this one agency for years and he trusted them - there wasn't even a contract!
So, better to be safe than sorry.
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Originally posted by edison View PostYou can get an online Experian Business Credit Report for any UK business for about £20. Well worth it when contracting with small entities/agencies and even larger ones. It gives you details on how good the company is at paying invoices etc and has an overall score which indicates the likelihood of bankruptcy.
I've used it a couple of times. The first time the report said the company was extremely creditworthy. When I used it with another company, there were several red flags but after investigating further, they all had a logical explanation.
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After 6 months out of work I wouldn't be worrying about this to be honest. Ideally you would want weekly pay but I wouldn't fight hard personally. Risk is part of being a contractor end of the day.
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You can get an online Experian Business Credit Report for any UK business for about £20. Well worth it when contracting with small entities/agencies and even larger ones. It gives you details on how good the company is at paying invoices etc and has an overall score which indicates the likelihood of bankruptcy.
I've used it a couple of times. The first time the report said the company was extremely creditworthy. When I used it with another company, there were several red flags but after investigating further, they all had a logical explanation.
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My last contract was via a very small agency and they paid weekly after I said I wasn't happy about the level of risk. Paid on time, every time for 18 months. Contact with them was so much better than with the bigger outfits.
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Originally posted by BigDataPro View PostIf you are a much preferred candidate for the client and therefore to the agency, negotiate for a weekly payment. This will help limit your losses as well as to understand agency's financial position.
I didn't get it they took someone who was much cheaper basically happy to work for a v low rate....
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If you are a much preferred candidate for the client and therefore to the agency, negotiate for a weekly payment. This will help limit your losses as well as to understand agency's financial position.
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Originally posted by Protagoras View Post
Not sure whether this would be considered as 'insurance' but looks as if IPSE still has an offering to provide some compensation for agency / client failure.
https://www.ipse.co.uk/become-a-memb...ure-cover.html
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Originally posted by courtg9000 View Post
There is to my knowledge no insurance product available for this.
https://www.ipse.co.uk/become-a-memb...ure-cover.html
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Originally posted by Cookielove View PostIt’s not a start up.
it’s not wfh either.
I think you are getting confused the client isn’t a start up.
My concern is around the agency the agency that contacted me is not your usual big agency. He is a one man band agent he is the sole person working for the agency that he has setup. I’ve looked at his website and Companies House.
His company the agency name has accounts filed with CHouse and last few years are in big losses and owing with no money in the bank…so cash flow issues or something…
My concern is will I get paid as he would be paying me into my limited company …it’s not like the big agencies who factor their debts and pay you weekly before they even get paid by the client.
Do some due diligence by all means but realise that across all sectors are too many recruitment agencies for the amount of business available and every day someone somewhere sets a new agency up on their jack jones thinking they will make it. Some do and some don't.
If 30% of all the recruitment agencies in the world went bust tommorow it would not make a difference to the market. It would inconvenience clients a little but thats it.
The chumps that set up on their own after being made redundant would find it difficult to get the business from the clients and the agencies that are left would probably not bother expanding their teams.
Contractors and agency temps - employees would loose money for sure but for the most part the end client won't actually care.
My advice is try and limit exposure. Limited credit to the agency etc. Keep the agent onside, build a relationship with him or her.
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Go for it. If you get it drill down hard on the agency what the payment terms are. No point stressing about it until you get the gig.
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Originally posted by Protagoras View PostIs there the option may be to obtain insurance against non-payment in the case of agency failure? I think that this should be possible for an 'outside' gig.
Of course it makes sense to negotiate prompt payment terms and steer clear of monthly invoicing, but that's desirable for all contracts.
I suppose another question is how much the work costs to perform. Having to pay out for travel, accommodation etc makes the risk rather different from, say, WfH where the losses would be limited to the opportunity cost.
Invoice/Debt factoring comes close but you will find that you get clobbered on the terms and fees and thus this would render this avenue financially unviable.
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Is there the option may be to obtain insurance against non-payment in the case of agency failure? I think that this should be possible for an 'outside' gig.
Of course it makes sense to negotiate prompt payment terms and steer clear of monthly invoicing, but that's desirable for all contracts.
I suppose another question is how much the work costs to perform. Having to pay out for travel, accommodation etc makes the risk rather different from, say, WfH where the losses would be limited to the opportunity cost.
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Thanks all!
it’s such a bad situation at the moment sure a lot of people are in the edge…
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