Reply to: Invoices

[Sockpuppet]

which credit agency do you use johnny?

I use:
http://www.quickcreditreports.co.uk/

Salesscope report.

Gives you all the real info that you need for £3.

[chef]

which credit agency do you use johnny?

[johhnysalad]

Forget the rubbish about how real businesses wait 30/60/90 days. Real businesses get paid as soon as possible.

Of course they do, and anyone who would rather wait 30 days over 7 is a fool. Almost all agencies will start out asking for 30+ days - they are a business and many will have to factor the difference between paying you and the client paying them.

I run a credit check on the agency which shows me a recommended credit limit to offer. I work out from that how much credit will be with the agency on the terms they ask for, if it's higher than the limit, I use the credit report to negotiate it down.

If I bill £10k/month on 30 days, at any one time, I will have £20K "at risk" - £10K unbilled, and £10k unpaid. If the credit ref advises £10K limit, I'd offer 14 days terms.

[TheFaQQer]

dam 232 is a low post count for a year!

Remember, LR posts don't count any more, so it could be much more than that - mine more than halved not long ago.

[NotAllThere]

I am new to contracting so wanted to gain some views on the above.

I am up to date in presenting my invoices to my client (the EB) but they seem to be settling the invoice one week in arrears.

To be honest, I am not comfortable with this but, as it is early in our 'relationship, am not sure whether to raise it as an issue.

Would welcome any thoughts or feedback on others' scenarios.

TIA.

Forget the rubbish about how real businesses wait 30/60/90 days. Real businesses get paid as soon as possible. If you can get paid immediately after submitting invoices, do so. Though it is true that 30-90 days is not uncommon, and sometimes you may just have to accept that to get the contract. It seems payment terms vary according the niche of the agency. I've been contracting since 1995, and when going through an agency, the usual has been 7 days, the worst I've had is 21 days, the best was on receipt of faxed invoice and signed timesheet, with the originals following. That meant money in my account the day after I sent the fax!

Anyway - what matters is your contract. Are you being paid 7 days later than the contract specifies, or are you being paid 7 days after they've received your invoice? If the latter, don't worry - though do check what your contract says about payment. If the former, remind them politely that consistent late payment is a breach of a contract term. You can then also add a statutory admin fee and interest, which do consititute a legal debt. See here.

[poser]

dam 232 is a low post count for a year!

[poser]

Hicks,

on my second contract now where i get paid 5 days after invoice is recieved, first contract had to wait, it was 30 days. it was also quite tough as cash was minimal, but your a business now, and once you get a few payments, youll be on your feet in no time.

(wow ive been reading on here for nearly a year)

[Turion]

I've never had a weekly invoicing contract in 9 years. Always monthly and them sometimes waiting several weeks for payment. Agencies often have set payment dates and if you miss you are delayed until the next one.

TBH it sounds like you are doing low value stuff and living a hand to mouth existence. What happens if at the end of contract you are benched for a month or two. Not an uncommon occurence. In your situation you should go permie. At least you have some security.

[TheFaQQer]

As for 7 days, christ no. You're still thinking way to much like a permie...

cash-in-hand builder / temp

[miffy]

What would be a reasonable amount of time? 7 days?

Also, what would be the best wording to use?

I always give them 30 days (no reason why you shouldn't as you're a business after all remember). I think that should be the minimum. Again, depends on your contract, ensure you're up to speed with what's contained within it. Most agencies will pay faster than your terms anyway.

As for wording, theres plenty of invoice examples to be found dotted around the net, mine reads...

Terms:
Payment to be made within 30 days receipt of this invoice, as per the contract governing this agreement.
Please pay either by cheque (to the above address) or via BACS to the following bank account, quoting the invoice number as a reference.

As for 7 days, christ no. You're still thinking way to much like a permie...

[TheFaQQer]

Thank you for your feedback and you are right, I think I am concerned because I have just started out and there is not a lot of cash flow at the moment.

Also, a very good tip regarding the due date being included on all future invoices.

What would be a reasonable amount of time? 7 days?

Also, what would be the best wording to use?

A reasonable amount of time is whatever you agreed in the contract - if that is 7 days then fantastic, lucky you. If that is 90 days, then unfortunate but still reasonable.

If you feel that you need to use wording, then something like "Payment Terms: 7 days from receipt of invoice" should suffice.

If it's a real problem, then you could offer a discount for early payment - but to be honest, it's never going to happen if they are already paying in 7 days. It'll take 3 days to clear payment, so unless you're expecting cash, what more can they do??

[Sockpuppet]

I still don't see the problem.

Are you expecting payment the same day as invoicing? Are you expecting the agency to pay £40 for a CHAPS transfer each week? A Bacs transfer takes 3 working days so if you are getting paid on the 7th day then they are authing it after 2.

A reasonable amount of time is what has been agreed. Is 60 days reasonable? Yes, becuase that is what we agreed.

If your getting paid after 7 days then be thankful. Your not going to get paid any faster.

Cash flow is your problem not the clients. You really should be able to survive for 3 months at any time without any money. I've had to take 2 clients to court to get paid. It was fixed price work not this quasi-employment most contractors do. They decided that as it was low value they thought I wouldn't bother chasing payment.

Virtually guaranteed payment after seven days is a luxury.

[Hicks]

Thank you for your feedback and you are right, I think I am concerned because I have just started out and there is not a lot of cash flow at the moment.

Also, a very good tip regarding the due date being included on all future invoices.

What would be a reasonable amount of time? 7 days?

Also, what would be the best wording to use?

[Sockpuppet]

I am new to contracting so wanted to gain some views on the above.

I am up to date in presenting my invoices to my client (the EB) but they seem to be settling the invoice one week in arrears.

To be honest, I am not comfortable with this but, as it is early in our 'relationship, am not sure whether to raise it as an issue.

Would welcome any thoughts or feedback on others' scenarios.

TIA.

Wow.

Are you saying you get paid 7 days after invoicing? Geez!

I get paid 60 days after invoicing!

You want to work as a business and get the perks (dividends) start acting like one.

[moorfield]

I am new to contracting so wanted to gain some views on the above.

I am up to date in presenting my invoices to my client (the EB) but they seem to be settling the invoice one week in arrears.

To be honest, I am not comfortable with this but, as it is early in our 'relationship, am not sure whether to raise it as an issue.

Would welcome any thoughts or feedback on others' scenarios.

TIA.

Check your contract - but one week is pretty good. Shouldn't be much of a problem for you once your cashflow gets going. Tip - make sure you have "Due Date" stated on your invoices in case you do need to chase up / dispute.