Reply to: "Invoice will be paid by" payment term in contract

[Spacecadet]

It's highly unprofessional to say getting the money is more important than doing the work. That suggests if you can cut corners and do shoddy work without the client noticing, you should since it's a better profit/time reward.
A craftsman should take pride in their work.

Providing shoddy work to the end client risks profit so for that reason cutting corners is a no-no

[d000hg]

So you work for the fun of it then?

The point of running a business is to generate profit. Providing a service to a client is merely a means to that end.

It's highly unprofessional to say getting the money is more important than doing the work. That suggests if you can cut corners and do shoddy work without the client noticing, you should since it's a better profit/time reward.
A craftsman should take pride in their work.

[Spacecadet]

If you're a public sector permie, maybe...

So you work for the fun of it then?

The point of running a business is to generate profit. Providing a service to a client is merely a means to that end.

Your best position to argue is to show a pattern of payment over the life of the contract. So if you were there for six months and all invoices (bar the last one) were paid within XX days of invoicing, then you can argue that this was 'accepted' by both sides as an implied term of the contract. As such, you could legally enforce that term in court. I would provide the agency with a reminder of this pattern and that you wish to affirm that payment approach and that they honour it.

And unless there is a term in the contract that clearly states payment to yourself is dependent upon payment from the client - most usually are tied to the provision of a signed timesheet - the agency cannot withhold payment.

In cases where the agency doesn't pay, and are adamant about not paying, then I typically inform them I will contact the client within XX days and serve the invoice upon them, and withhold intellectual property rights until payment is made, meaning the client cannot use your work products until they have paid for them. Works brilliantly.

[theroyale]

by default it's 30 days unless otherwise stated. The agency will know this full well....

Ah, the b******s!

Thanks for all the replies; will make sure I get a payment clause into my contract from now on...

[Not So Wise]

Is it "ok" (i.e. is it done, standard etc etc) for contractors to enforce a "pay within x days" clause in their contracts? If so how many days? In an ideal world if I am invoicing weekly and an agency tells me verbally "We normally honour your weekly invoice by friday next", i.e. 10 days, then I'd like to see that go into my contract.

Yes it ok. My normal demands are:
Invoice weekly: Pay within 30 days or less
Invoice monthly: Pay within 7 or 14 days or less (depends on how good/solvent agency is)

Basically keep my exposure down to 5-6 week's or less

Never accept payment dependant on 3rd party (client) paying anywhere in contract

Never accept the verbal/email "we normally pay in .." stuff, if agent is not willing to put it in the contract i don't accept contract.

Only takes one agency/client folding in your career to make you very forceful/adamant on such things

[d000hg]

You've done well to get the promise of 45 days in writing. That's a pretty good deadline.
Yes it's absolutely normal to put payment terms in your contracts. 30 days is OK - that's about the minimum you can expect from a direct client and about the maximum you'd expect from an agency.
We shouldn't forget that getting the money is more important than doing the actual work, and contract terms should reflect that.

If you're a public sector permie, maybe...

[TykeMerc]

I always make sure payment terms are written into the contracts, usually 14 days. Apart from some negotiating (ok basically insisting) I've not had any hassle getting terms written in for the last 15 years.

I learned the hard way back when I used to supply hardware and labour and was left chasing >300k for months.

[thunderlizard]

You've done well to get the promise of 45 days in writing. That's a pretty good deadline.
Yes it's absolutely normal to put payment terms in your contracts. 30 days is OK - that's about the minimum you can expect from a direct client and about the maximum you'd expect from an agency.
We shouldn't forget that getting the money is more important than doing the actual work, and contract terms should reflect that.

[MarillionFan]

Once had a similar type situation. Contracted through an agency that was primarily a perm recruiter. They didnt have experience of contracts, but were of course happy to add their 15% on top.

Anyway clientco was slow to pay them. I was on a month and after a couple they kept saying 'but we havent been paid, we cannot pay you until we get paid'.

Alarm bells ringing, I eventually went to HR and said this is not on. HR didnt like the agency either, and so I went direct and the agency was told to buzz off, and no there would be no sign on fee. They had six months of 15% for nothing, and so all parties just got on with it.

[Wanderer]

I've successfully argued to the agency's director that my contract being honoured has no dependency on the client paying them

Good work. It's the agencies problem, not yours though. Your contract is with the agency not the client so tell the agency to pay up.

- but the sticking point now is the duration: the agency is telling me - correctly - that there is no set time within which they will have to pay me

As doodab says, by default it's 30 days unless otherwise stated. The agency will know this full well....

[VectraMan]

WHS. Now you've agreed 45 days you can't do much else, but I would have started proceedings against the agent as soon as it looked like a problem (proceedings being a solicitors letter informing them of your intent to start adding interest at the 30 day point and the threat of further action).

I'm not sure you'll get that far insisting on your own payment terms with agents, and even if you do it won't guarantee that they'll pay. It'll still be up to you to take legal action to enforce the terms. So you're not really any better off.

[doodab]

The late payment of commercial debts act says interest can be charged after 30 days unless something else has been agreed.

Late Payment of Commercial Debts (Interest) Act 1998 (c. 20)

[SueEllen]

There is no set time in law when payment is due it's what's agree. So therefore you need to make sure your payment times are in the contact.

Some companies will only accept monthly invoicing and will pay 7, 14, 30, 60 or 90 days after receiving the invoice.

In future put payment terms into the contract. Try and get 7 days after invoicing whether you are invoicing weekly or a monthly, and add a clause that services will be discontinued if payment is not received within that time.

Be pleasant and say I know you will pay but to make it clear to both sides we should have this agreed in writing. If they decide to be awkward then unfortunately you are going to have to get a solicitor to draft the terms.

[Spacecadet]

Just because there are no payment terms stated in the contract doesn't mean that there are no payment terms.
Payment terms are usually 30 days, so it is a fair assumption to make that an invoice should be paid within a month.