Reply to: Huxley - 28 Days to pay

[NotAllThere]

If you view it like this you will have nice low blood pressure and not get so up tight about something that really doesn't matter too much.

It's only really doesn't matter too much if they have a nice healthy credit rating.

[rawly]

All good and well but those payment terms don't generally fly when you are direct i.e. with no agent and in a B2B contract.

Personally I would be picky over someone that cannot use 'sought' correctly.

HTH

Fortunately for me, then, English Language is not the skill in question.... I'd do poorly at a Royal Mail Sorting depot I guess. But I doubt they'd pay my rate anyway.

[NickNick]

Timeframes

The place I'm at at the moment (sans agency) have 30 day terms, but in practice they pay within three days.

Which is nice.

[Ardesco]

It seems that for contractors using agencies it isn't standard terms. You said that recently agencies have started offering better terms. That isn't the case. It's recently that agencies have started on this 30 days kick. ( Depending on your definition of recently, but 3 or 4 years ago, 14 days was considered to be taking the mickey ). And they're getting away with it, because puritans like you think it is reasonable.

As businesses, it is obviously in their interest to stretch out the payment period as a long as possible. And as businesses, it is obviously in our interest to compress the payment period as long as possible. And that is where negotiation skills come in. Now that you realise that many contractors are being paid in fewer than 30 days, you've got a bit more leverage to get better payment terms. You should be happy.

I have no problem with people negotiating for a shorter payment time frame, but I still say that 30 days is a perfectly acceptable period of time to wait for your invoices to be paid. Anything sooner is a bonus.

If you view it like this you will have nice low blood pressure and not get so up tight about something that really doesn't matter too much.

[NotAllThere]

You are a business, agency is a business, it's standard terms FFS.

It seems that for contractors using agencies it isn't standard terms. You said that recently agencies have started offering better terms. That isn't the case. It's recently that agencies have started on this 30 days kick. ( Depending on your definition of recently, but 3 or 4 years ago, 14 days was considered to be taking the mickey ). And they're getting away with it, because puritans like you think it is reasonable.

As businesses, it is obviously in their interest to stretch out the payment period as a long as possible. And as businesses, it is obviously in our interest to compress the payment period as long as possible. And that is where negotiation skills come in. Now that you realise that many contractors are being paid in fewer than 30 days, you've got a bit more leverage to get better payment terms. You should be happy.

[Not So Wise]

Just out of interest, how does this affect bench time? Do you find agencies receptive or not?

Receptive? No.

Until I say "ok not taking the contract" (and meaning it) then I get seem everything I want (mainly pay timescales and business/IR35 unfriendly clauses taken out and friendly ones put in,rates are sorted out long before this and don't allow agencies to lower them). Main thing to always remember is once the client says they want you that you have the advantage for the first time because if you don't take the contract the client is going very unhappy with the agency no matter what the excuse

And in case wondering, I am in an area where they could probably find someone with similar skills in no time at all (though would struggle a bit to find someone with similar length of experience)

Only once in over 10 years have had the agency not give in, Computer People, and that argument was not about pay timescales but about contract clauses that would have turned me into Hectors Bitch (was virtually a temps contract and the "only one the agency will use") and even that worked to my benefit as got another contract 2 days later at about 20% more that lasted 2 years

Ever since avoided like the plague agencies that have reached the size where they think they can have everything their way and screw over the contractors every which way

[Dow Jones]

30 days rule

They still take 30 days to 'sort' him out

[ratewhore]

I take no rubbish from agencies - they get dumped if they piss me off.

Just out of interest, how does this affect bench time? Do you find agencies receptive or not?

[Ardesco]

Nothing unusual in that IMO. Sounds like standard B2B payment terms.

I don't know why you're all getting your knickers in a twist. 30 days is standard for a B2B relationship. In fact, the late payment legislation takes 30 days as standard as well so, if the agency does not pay within 30 days of invoice date, debt recovery costs and daily interest apply...

You are a business, agency is a business, it's standard terms FFS. Why is everybody getting on their high horse?? The arguments everyone is using to say the agency could pay quicker can apply to anybody.

If you are direct why shouldn't the end client pay you within 3 days? After all the money is just sitting in their account earning interest....

Do you always pay your untility/credit card bills within 3 days of getting them? Or do you leave them until the end of the month sometime? WHY!!! SO YOU CAN KEEP THE MONEY IN YOUR ACCOUNT??? BASTARDS!!!!

I see no reason the agency shouldn't do this and take 17%, they may not do a huge amount but they still have business running costs that have to come out of your rate as well and 3% isn't going to pay for tulip.

[Not So Wise]

All good and well but those payment terms don't generally fly when you are direct i.e. with no agent and in a B2B contract.

Direct is totally different senario as there is no middle man getting paid to provide a "service" (or who should be providing a service). There 30 days is perfectly acceptable, anything under that is a bonus

[oracleslave]

You make some very good points indeed.

Some people forget if you get a 6 or 12 month contract, then between the agency and the End Company, they are probably raising purchase orders for you services in 3 month chunks at the least. The Agency is probably getting your first 3 Months within the first 30 days of the contract, and then raking in the interest by dragging their feet on payment terms and processes.

I have never accepted payments more than 10-14 days, and for me same week payment has mostly been the norm. I would specifically reject an agency if it had a 30 day turnaround.

But, at the end of the day it all comes down to how sort after your skills are, to be picky and choosy like this. I take no carp from agencies, they get dumped if they piss me off.

All good and well but those payment terms don't generally fly when you are direct i.e. with no agent and in a B2B contract.

Personally I would be picky over someone that cannot use 'sought' correctly.

HTH

[rawly]

It comes down to what you consider agencies get paid for:

So why do I refuse to accept 30 days to pay on a monthly contract? Because we (contractor & client) are paying the "agency" for a service they are not providing.

But do I fault the agency for trying to do this? No because it their imperative to get maximum revenue for minim cost/effort, but I do find fault with the contractors that accept this, because they and the client are in effect paying for services they are not getting

And that is not a responsible way to run a business

You make some very good points indeed.

Some people forget if you get a 6 or 12 month contract, then between the agency and the End Company, they are probably raising purchase orders for your services in 3 month chunks at the least. Especially so if it is linked to a specific Project with its own cost centre. The Agency is probably getting your first 3 Months within the first 30 days of the contract, and then raking in the interest by dragging their feet on payment terms and processes.

I have never accepted payments more than 10-14 days, and for me same week payment has mostly been the norm. I would specifically reject an agency if it had a 30 day turnaround.

But, at the end of the day it all comes down to how sort after your skills are, to be picky and choosy like this. I take no rubbish from agencies - they get dumped if they piss me off.

[Not So Wise]

I don't know why you're all getting your knickers in a twist. 30 days is standard for a B2B relationship. In fact, the late payment legislation takes 30 days as standard as well so, if the agency does not pay within 30 days of invoice date, debt recovery costs and daily interest apply...

It comes down to what you consider agencies get paid for:

First off is the obvious, introduction of client to contractor.

Now first thing you need to realise here is that is all they do, introduce one to the other, they not "agents" in the real sense, aka marketing contractors on their books and seeking business opportunities for them.

They are actually doing the reverse, seeking contracts, any contracts and once they have them they just go "looking" (aka post to jobserve) for contractors to fill them (and most do this even when they have contractors on their books already that could fill the position). The whole term "Agency" is a misrepresentation. More accurate term is "introduction company"

Now a real agent, one who works for the contractor, can justify margins of 17% but there is no way an "introduction company" can, especially on the entire length of a long term contract. 1% to 3% would be more appropriate (and actually seen these to be the rates in other areas of business that basically do same thing)

So, over the years how have "agencies" justified this? By providing a factoring service (and actually been told this by agents themselves when trying to argue their rates down).

Now for a factoring service 15% is perfectly reasonable, add in the "introduction fee" and you are at the 17% that seems to be the industry standard (give or take a point or two)

So why do I refuse to accept 30 days to pay on a monthly contract? Because we (contractor & client) are paying the "agency" for a service they are not providing.

But do I fault the agency for trying to do this? No because it their imperative to get maximum revenue for minim cost/effort, but I do find fault with the contractors that accept this, because they and the client are in effect paying for services they are not getting

And that is not a responsible way to run a business

[oracleslave]

I don't know why you're all getting your knickers in a twist. 30 days is standard for a B2B relationship. In fact, the late payment legislation takes 30 days as standard as well so, if the agency does not pay within 30 days of invoice date, debt recovery costs and daily interest apply...

Which is what I said in the first reply to the OP yet the debate rages on

[ratewhore]

I don't know why you're all getting your knickers in a twist. 30 days is standard for a B2B relationship. In fact, the late payment legislation takes 30 days as standard as well so, if the agency does not pay within 30 days of invoice date, debt recovery costs and daily interest apply...