The last few years have been a really interesting adventure for me - I've set up two businesses and things are moving in the right direction. Along the way I've made some mistakes but more importantly; learnt from them.
Hopefully :)
This one relates to B2B late payments and lessons learned in preventing the situation. It's definitely worth getting a background in your monetary rights from UK Plc too.
When I first started it would have been fair to say that I was a novice in the world of contracting and it's nuances - Only good advice from my accountants and contractor colleagues really got me moving. However it was soon clear that even that wouldn't solve the underlying problem: What do you do if the customer doesn't take your invoice due dates seriously?
The first example is from my time working as a contractor for Woodrow Mercer. I don't think the recruiters themselves are really at fault but that doesn't excuse the accounting department. Most agencies seem to have rude and unprofessional accounts department staff - with few exceptions - and they frequently seem to attempt to bully or turn their nose up at contractors.
One agency, ERG, were particularly bad at this back in 2012 - I was sent threatening emails from senior recruiters and directors when I terminated the contract with them. They made wild [incorrect] guesses about where I'd taken the next contract and on recruiter even attempted to get in touch with relevant hiring managers. It was all bluster, aiming to play on the submissive psyche normally present in technical people. However I just prepared the particulars of claim document I'd need to take them to court for non-payment - they paid before the deadline to pay expired though.
Woodrow Mercer failed to pay on time on three separate occasions - the worst thing about this was that the client involved were such a nice bunch to work for. Really well gelled group of people who enjoy what they do. The second time payments were missed there was no excuses or apologies from WM so I called them.
They sent me an abrupt email saying that they'd pay one invoice but the other would have to wait - regardless of the fact that they were legally obliged to pay on both invoices due dates. In that scenario they did pay, but one week late on one and two weeks late on the other invoice.
The third time they missed payments I'd had enough of being passed off with bluster and excuses - Had a word with the client manager and respectfully noted that I would not be returning to site until the invoices were settled. One invoice is still outstanding 11 months on although for a relatively nominal fee. They've since stated that they will "...rigorously defend.." any claim in the courts - I may update that with another approach depending on some parallel research.
Wind the clocks forward a year or so and two other agencies have attempted to bully their way out of late payments. In both cases both the contract and the invoice T's and C's supported an instant late charge along with interest growing daily.
Uniting Ambition fell short of the mark after neglecting to pay the final invoice on due date (I would have been fine with it had their been discussion beforehand, some reasonable negotiation solves a lot). They attempted to negotiate a portion of the fines but then paid in full when I delivered a "notice before action". If it was the first time they'd paid late I might have let it slide but they'd failed to pay every single contractor at that client (~30 people) on the first invoice date. No apology was given and only a few vague excuses. An inexcusable attitude.
In all cases a reasonable discussion up front prevents any of this - Just a phone call to say there's payment problems and that your invoice will be 5 days late will make a huge difference to your planning. Having said that consistent late payments should give you all the indication you need. Try doing some research first and getting a credit check of the company before you sign a contract with them. That's often due cause for respectfully requiring them to change the payment terms on your contract. Talk to your bank about their B2B credit checking offering. You can throw the payment terms on any contract they offer back at them if they telling you they do 30 days payment but their credit rating barely supports 7.
Normally a lot of contract terms in the UK make it very tricky in relation to IR35 - never mind just getting paid. Lots of unprofessional agencies initially reject requests to change the contract; "it's a standard contract we use for everyone and do not change it". It's all bullshit. A contract review by your accountant or legal representative is worth every penny.
I work with other types of organisation directly and although some of these problems are common elsewhere, the attitude towards invoice due dates is not. You've worked hard for your rate and perhaps even worked far away from home to do so, why should getting paid be a struggle?
