Agency Credit Check

[boxman]

I don't think you'll get a personal guarantee from a director but it might be worth asking. The best move I feel is to limit your credit exposure as much as possible if you can't get a formal credit rating for the agency. In this case I always start by insisting that invoices are submitted weekly and paid within 7 days and then sit back and wait and see the reaction. As you're in business to make a profit then there's no point in working hard only to not get paid. You need to consider how much (in cash terms) you can afford to lose if the agency doesn't pay up and what happens to your contract in this situation.

In my view contracts have become far too one-sided in the past couple of years with agencies attempting to hold all of the cards and insisting on uncommercial contract terms from contractors. If the agency is not in a position to pay invoices then you shouldn't have to rely on lawyers to show that this is a material breach and yourco should be free to contract with the end client direct or via another agency immediately without question. If an agency isn't happy with this then frankly you have to ask yourself why not. If they're that concerned that they might go into administration then personally I'd run a mile. In the final analysis I'd rather take a lower paying gig and get paid than a top dollar contract where I might not!

[Sockpuppet]

Thinking about this today.

Wanted to get an increase to £3000 on the business card...sodding hotel bills and they wanted a personal guarantee for the money.

Anyone forced said agency director to provide a personal guarantee for the money.

[thunderlizard]

I always get customers credit checked unless they're blatently so blue-chip it's not worth it.
Administration clause is sensible too. It won't bother your tin-pot agency director because by the time the firm goes into administration they'll be half way to Thailand anyway.

[Gonzo]

Just wondered how many people here run credit checks on their agency before accepting a gig?

There seems to be a lot of small agencies around, set up recently with no accounts or credit rating available. With the switch to monthly invoicing (rather than weekly) the credit risk has gone up considerably as it could be nearer 2 months before the first invoice is due for payment at which point I'm not keen to find out that the agency can't pay and owe me (say) £20k+.

When I get the contract reviewed I'm going insist that an "administration" clause is inserted so that in the event of the agency going into administration or liquidation that this is specifically noted as a material breach of contract and myco is free to contract direct with the client or another agency as I see fit.

Any thoughts on this matter and other approaches/experiences would be useful please.

thanks

Rob

If the company is new then a credit check is not going to tell you an awful lot about them, other than be very careful.

If no accounts have been filed, and they have not been going long enough for their bad debts to have got to court, then there is not a lot that a credit check is going to be able to tell you.

I think that is a good idea for the extra clause, I will remember that myself Afterall, if they are new and small they are not going to want to risk jeopardising the gig, or am I missing something?

[boxman]

Just wondered how many people here run credit checks on their agency before accepting a gig?

There seems to be a lot of small agencies around, set up recently with no accounts or credit rating available. With the switch to monthly invoicing (rather than weekly) the credit risk has gone up considerably as it could be nearer 2 months before the first invoice is due for payment at which point I'm not keen to find out that the agency can't pay and owe me (say) £20k+.

When I get the contract reviewed I'm going insist that an "administration" clause is inserted so that in the event of the agency going into administration or liquidation that this is specifically noted as a material breach of contract and myco is free to contract direct with the client or another agency as I see fit.

Any thoughts on this matter and other approaches/experiences would be useful please.

thanks

Rob