Reply to: Payment terms 30 days

[BA to the Stars]

Surely in this situation, you'd put your Direct Debit dates to a week after you've been paid like any other normal person? I've just had to move mine because work pay me on the 27th, instead of the 15th.... So I've changed mine to come out on the 3rd.

Plus....your direct debits have nothing to do with your limited company, so you should have enough money in your pot to pay yourself for a couple of months to cover this situation.

Just to clarify re direct debits and dates of collection

Direct debits - it is the business collecting the money that sets the dates of collection not the payee. You would have to ask the organisation to whom you are paying if they can adjust the payment dates

Standing order - it is the payee that sets the date when the funds leave the account

[The Agents View]

My agency pays via this method and I hate it. Each month I worry whether or not they will pay me. Payment was due yesterday and when I called them they said it will be made today as they had staff shortages!! Gets me so cross as direct debits etc. then get missed. There is no flexibility to change frequency. Its a case of like it or lump it. The only advantage is that the agency have a long term relationship with the client which means contractors stay for years in many instances on a good daily rate.

Surely in this situation, you'd put your Direct Debit dates to a week after you've been paid like any other normal person? I've just had to move mine because work pay me on the 27th, instead of the 15th.... So I've changed mine to come out on the 3rd.

Plus....your direct debits have nothing to do with your limited company, so you should have enough money in your pot to pay yourself for a couple of months to cover this situation.

[simplicity]

My agency pays via this method and I hate it. Each month I worry whether or not they will pay me. Payment was due yesterday and when I called them they said it will be made today as they had staff shortages!! Gets me so cross as direct debits etc. then get missed. There is no flexibility to change frequency. Its a case of like it or lump it. The only advantage is that the agency have a long term relationship with the client which means contractors stay for years in many instances on a good daily rate.

[ratewhore]

I've worked 30 days payment terms before on a number of occasions. I've been direct on 90 days as well so I don't really see what the issue is.

As long as I've credit checked the agency and they are good for the right amount then i understand it's a business decision for them and a constraint I can live with.

Can't say I agree with freaking out wanting the cash in the bank within the week but each to their own...

[PinkPoshRat]

What I have done in the past, where payment terms are on monthly payment basis, is ask whether I can be paid weekly for the first few weeks. So far it's always worked out ok.

[lukemg]

I don't give a sh1t what terms the agency is on, this is one of the very few things they are doing for the money. I want the cash asap, 7 days is ok, 14 is the absolute max.
Dig heels in, they will buckle rather than lose the contract.

[JamJarST]

And how much margin are they taking? Seriously, it's tulip like this that that agents are paid handsomely to deal with.

15%

[Wanderer]

I am on weekly invoicing with 30 day payment terms. They pay me on time (in fact always a few days early) I have looked at my agents vendor account and they are on 45 days terms with ClientCo. ClientCo appears to be late paying and their are 2 invoices outstanding which I have been paid on time.

And how much margin are they taking? Seriously, it's tulip like this that that agents are paid handsomely to deal with.

[JamJarST]

I am on weekly invoicing with 30 day payment terms. They pay me on time (in fact always a few days early) I have looked at my agents vendor account and they are on 45 days terms with ClientCo. ClientCo appears to be late paying and their are 2 invoices outstanding which I have been paid on time.

[craig1]

When an agency messes around with long payment terms, I usually ask them to significantly increase the daily rate to compensate for them having the use of my money for that longer period. Every agency so far has buckled at that point and given either 7 day or nominated weekly day terms*.

I'd especially hold out for short payment terms with a new agency you have no working relationship with. It's a long wait on monthly billing with 30 day terms to find out whether the agency will bother paying that first invoice.

* i.e. get invoice in by Monday to get paid on Friday or wait until next week.

[northernladuk]

Generally I would agree that 30 days is too long and negotiate to anything lower, 14, 7 days, whatever.

Oddly enough however I have been on 30 days for over a year now and have had one late payment and thats it. Still means I have over a month's risk hanging over me which will only surface when there is a problem though. Not overly happy about it but it's working. You won't instantly get screwed over the minute you sign up to it.

I am, however, happy the people paying me are are not going to go under at anytime in the foreseeable future.

[SorenLorensen]

30 days is taking the p*ss from an agency. I'd try to negotiate.

[inferno]

Is the agent paying you before they receive the money?

By the sounds of it they are not factoring the money but merely paying you once they've received the money.

If this is the case, then be prepared. I have known contractors not to receive money for 3 months with this set up.

[SueEllen]

Can you not invoice weekly? Then the money starts coming in sooner...

WHS

Ask to invoice weekly if they insist on 30 day terms. That way if the agency screws you over you can walk quicker.

[eek]

Can you not invoice weekly? Then the money starts coming in sooner...

Is the agent paying you before they receive the money?

By the sounds of it they are not factoring the money but merely paying you once they've received the money.