Agency paid invoice 2 weeks late - advice please
Discussion
Hello all
Looking for a little steer on normal etiquette here as I have not experienced this situation before.
My Ltd Co (PM Services) invoices my agency on a monthly basis. The process is submission of an invoice, which is processed and paid 7 days later.
The most recent invoice was not paid and I raised this issue with the agency. They cited a billing system error and have paid the invoice within 4 days of me raising the query, though it did take 4 emails this week to get an explanation from them.
I was understandably irritated by the delay in payment; whilst it did not cause any cash flow problems in this instance, their failure to respond promptly to my query and the general principle of them failing to pay me is pretty poor.
I've not come across this before, though a colleague of mine had a vaguely similar situation where if I remember rightly they were compensated with something like £100 of vouchers as an apology.
I'd appreciate anyone chipping in with their experience and whether it would be reasonable to expect something similar or other kind of compensation. The agency take a generous cut of my daily rate and in my eyes have failed to keep to their end of the agreement; luckily in this instance not causing any real damage, but had the potential to and failed to act in a suitable apologetic manner.
Looking for a little steer on normal etiquette here as I have not experienced this situation before.
My Ltd Co (PM Services) invoices my agency on a monthly basis. The process is submission of an invoice, which is processed and paid 7 days later.
The most recent invoice was not paid and I raised this issue with the agency. They cited a billing system error and have paid the invoice within 4 days of me raising the query, though it did take 4 emails this week to get an explanation from them.
I was understandably irritated by the delay in payment; whilst it did not cause any cash flow problems in this instance, their failure to respond promptly to my query and the general principle of them failing to pay me is pretty poor.
I've not come across this before, though a colleague of mine had a vaguely similar situation where if I remember rightly they were compensated with something like £100 of vouchers as an apology.
I'd appreciate anyone chipping in with their experience and whether it would be reasonable to expect something similar or other kind of compensation. The agency take a generous cut of my daily rate and in my eyes have failed to keep to their end of the agreement; luckily in this instance not causing any real damage, but had the potential to and failed to act in a suitable apologetic manner.
You would have to the penalty clauses built into your agreement with the agency, e.g. 2% per month for late payment.
You could of course threaten legal action, but that wont do your relationship and good I imagine, but if it's just a one off you might just have to make do with a bit of a moan at them.
You could of course threaten legal action, but that wont do your relationship and good I imagine, but if it's just a one off you might just have to make do with a bit of a moan at them.
Thanks Sid. Yes there's no reason to consider anything serious like legal action; as you say, it would do more harm than good and I believe this is a one off.
Just was annoyed at the delay in getting an answer and the lack of contrition - I was thinking if I made a fuss it might send the message that I don't consider their behaviour to be acceptable.
Just was annoyed at the delay in getting an answer and the lack of contrition - I was thinking if I made a fuss it might send the message that I don't consider their behaviour to be acceptable.
I make a point of hassling people who haven't paid on the due date; email on the day reminding that it's due, text message a few days after that then daily phone calls if needed. Most pay on time with small minority needing to be chased. My terms are +28 days though so imho I'm right to get pissed if they're late! Don't get too uptight this time just chase it up if it happens again imho.
TX.
TX.
For a one off mistake I would just let it slide in the interests of keeping a good working relationship. If they get the hump with you asking for compensation they could easily pull the plug on any future work that goes your way.
I have an agency at the moment that every few months will "forget" to pay the invoice on time. I just send them another e-mail with the invoice attached and after they apologise I always get it the following week when they do the next billing run on their end. For the energy of one extra e-mail and a week late I don't bother too much just to keep the peace, and the work coming in.
If it was more than a week or so late however, then I'd stop work on any of their projects until the matter was sorted, just incase it was signalling cash flow problems.
I have an agency at the moment that every few months will "forget" to pay the invoice on time. I just send them another e-mail with the invoice attached and after they apologise I always get it the following week when they do the next billing run on their end. For the energy of one extra e-mail and a week late I don't bother too much just to keep the peace, and the work coming in.
If it was more than a week or so late however, then I'd stop work on any of their projects until the matter was sorted, just incase it was signalling cash flow problems.
It happens.. You could charge them a late payment fee - a statutory right.
However as a one off I'd let it slide. Say that in future you will charge them, and keep an eye on it.
A lot of companies are very late payers and they could be living 'hand to mouth'
Do not let it keep happening as I know of a few contractors who have had their agency go bust - even after the client has been invoiced for your work - and so the contractor has been left out of pocket..
However as a one off I'd let it slide. Say that in future you will charge them, and keep an eye on it.
A lot of companies are very late payers and they could be living 'hand to mouth'
Do not let it keep happening as I know of a few contractors who have had their agency go bust - even after the client has been invoiced for your work - and so the contractor has been left out of pocket..
Fotic said:
I wish my ltd company got paid 4 days after chasing a 7 day payment termed invoice.
Me too! I invoice 4-5 weeks in arrears and then payment is 30days after that.If it happens once and was sorted quickly, whats the problem?
If it happens again then you might want to start considering whether the agency is starting to have cash flow issues, in which case speak to your 'client' and let them know about the payment issue and arrange a new method of invoicing/payment (change of agency, going direct with the client etc).
You can claim a debt recovery charge and interest under the late payment legislation - see www.payontime.co.uk
You may not endear yourself to them if you do this however.
You may not endear yourself to them if you do this however.
Our payment terms are 'payment due upon delivery of invoice' yet our customers assume 30 days and we never get paid after 4 - 11 days. The agency is your customer and, in the extreme, if you become a pain in the backside they may replace you with another supplier of PM services. This is why we wait 30 days, send a polite letter at 30/60 days, send a stern letter at 90 days and follow up with a director phone call/small claims thereafter. I recommend that you build up a cash float and basic credit control schedule/procedure for all customers.
Eric Mc said:
In business, 30 days credit is normal.
So - are you REALLY in business or actually a disguised employee?
Have you taken on board the implications of IR35?
Having spoken to many hiring managers, recruitment consultants, and contractors, I'd say there were some shocking misunderstandings of IR35. So - are you REALLY in business or actually a disguised employee?
Have you taken on board the implications of IR35?
Here's a question for you. How close to being disguised is this?
A client provides work-wear with your name on it. Because they want to present a corporate image to their customers. (The contractor travels around the UK visiting suppliers of the client, to provide consultancy, using training material with the clients corporate logo, and the supplier (who is effectively a paying customer of the consultancy) is not aware if they are dealing with an employee or a contractor).
It amazes me that businesses work like this - being paid so far after providing goods / service. It must be a nightmare to manage cash flow and a huge risk of never getting paid.
Ok I'm only a sole trader but in my 3 little business my payment terms are as follows:
Racing instruction - £100 deposit on booking, full payment 14 days before training day.
Model car parties (kids parties and corporate events with RC cars) £50 booking deposit and full payment 14 days before event.
Driving lessons - either bulk pre payment for 10 hours or payment at beginning of lesson - 2 strike policy on last minute cancellations before insisting on pre payment.
Ok I'm only a sole trader but in my 3 little business my payment terms are as follows:
Racing instruction - £100 deposit on booking, full payment 14 days before training day.
Model car parties (kids parties and corporate events with RC cars) £50 booking deposit and full payment 14 days before event.
Driving lessons - either bulk pre payment for 10 hours or payment at beginning of lesson - 2 strike policy on last minute cancellations before insisting on pre payment.
Whether IR35 applies will be assessed based on a number of factors - wearing a corporate uniform is suggestive of an employer/employer relationship - but it is not conclusive in itself. For instance, people operating bona fide self employed franchise operations may be required under the terms of the franchise to use certain logos, clothing, uniforms, packaging, advertising etc.
Racingben said:
It amazes me that businesses work like this
Do you have any businesses as clients? Business to business relationships normally end up with these credit terms/invoicing processes.Business who perform business to consumer sales of occasional items often demand payment up front.
Sometimes though even private individuals are given credit - e.g. if you pay someone to refit the bathroom or build an extension you may not have to pay in full up front.
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