Contracting Company payment date, fixed or not?

[nhendrix]

Hi,

I started about 6 months ago as a contractor in the UK. My contracting company is Smartwork in Bristol.
I am being paid on a monthly basis, and they invoice the company where I work on a monthly basis. They have stated from the beginning they cannot give me a fixed payment date, as they are dependent on the payment for the invoice they send out. Which results in unexpected delays every month and me never knowing when I will be paid.

I just want to know if this is the way it usually goes? Or if a contracting company usually pays on a fixed day of the month, whether or not they have received payment for the invoice already?

I feel like something is wrong and I should be able to receive my payment every month on the same day.

Any insight would be greatly appreciated, thanks!
N. Hendrix

[GillsMan]

Hi,

I started about 6 months ago as a contractor in the UK. My contracting company is Smartwork in Bristol.
I am being paid on a monthly basis, and they invoice the company where I work on a monthly basis. They have stated from the beginning they cannot give me a fixed payment date, as they are dependent on the payment for the invoice they send out. Which results in unexpected delays every month and me never knowing when I will be paid.

I just want to know if this is the way it usually goes? Or if a contracting company usually pays on a fixed day of the month, whether or not they have received payment for the invoice already?

I feel like something is wrong and I should be able to receive my payment every month on the same day.

Any insight would be greatly appreciated, thanks!
N. Hendrix

By contracting company, I presume you mean the agency? This would ring alarm bells to me. If they can't pay you until they've been paid, then they might not have a lot of cash in the bank which means an increased risk of insolvency and you not getting paid what you owe.

I've seen this clause before in contracts, i.e. "we won't pay you until we've been paid" and I've always asked for it to be removed. Personally, I'd be happy to walk away from a gig with that clause in.

The way I look at it is the agency keeps a reasonable margin on your daily rate. So every day you get paid, they get paid too. They rightly get remunerated for finding the gig, maintaining some sort of relationship with your client. But also, that money should be for 'factoring'. If the agency isn't offering a factoring service, I'd question what they are offering.

Not sure what the advice is given that you're mid-contract and experiencing these issues now. Probably not much more you can do other than try to negotiate with them. When does your contract come up for renewal? I'd tell them that they need to amend their terms to something more favourable, preferably 7 day terms. If they refuse, ask for a higher daily rate to cover the risk. If they still refuse, walk. Or swallow the inconvenience.

HTH.

[Sausage Surprise]

Do you invoice the Agency or just wait till some money appears in you company account?

[Ticktock]

By contracting company, I presume you mean the agency?

Hi,My contracting company is Smartwork in Bristol.

A 5 second search reveals it to be an umbrella company.

So the complaint is that the umbrella company are waiting for payment before they pay nhendrix.
I can't remember exactly what used to happen when I was with an umbrella, but I think I had different paydays each month. I can't see any umbrella company paying out before they've received the funds.

[GillsMan]

A 5 second search reveals it to be an umbrella company.

So the complaint is that the umbrella company are waiting for payment before they pay nhendrix.
I can't remember exactly what used to happen when I was with an umbrella, but I think I had different paydays each month. I can't see any umbrella company paying out before they've received the funds.

My first contract I went umbrella for the first three months. It was Parasol and they paid weekly, on time every week. Having subsequently worked direct for the client, I can tell you that their payment terms were 30 days, and a couple of times it took 45 days to get payment, so Parasol definitely factored.

[Ticktock]

My first contract I went umbrella for the first three months. It was Parasol and they paid weekly, on time every week. Having subsequently worked direct for the client, I can tell you that their payment terms were 30 days, and a couple of times it took 45 days to get payment, so Parasol definitely factored.

Fair enough - I can't really remember how things operating with Giant when I used them, except I know I was paid monthly. I guess, like so much else, it depends on what was in the contract you signed.

[nhendrix]

Hi all,

it is in fact an umbrella company and they have explained to me they can't pay out before they have received the funds from the company I work for. This company is actually very slow and this makes for the payment coming late all the time. Apparently not in the hands of Smartwork.

thanks for your responses!
This was my last month in the UK, so hopefully no more contracting for me..

[Wanderer]

My first contract I went umbrella for the first three months. It was Parasol and they paid weekly, on time every week. Having subsequently worked direct for the client, I can tell you that their payment terms were 30 days, and a couple of times it took 45 days to get payment, so Parasol definitely factored.

Really? A mate worked through them and he didn't get paid until the agency paid Parasol. Maybe things have changed....

I can't see how an umbrella could do factoring for ~£100/month either - the risk is just too great.

[GillsMan]

Really? A mate worked through them and he didn't get paid until the agency paid Parasol. Maybe things have changed....

I can't see how an umbrella could do factoring for ~£100/month either - the risk is just too great.

Yup, just checked my invoice history, and I'd invoice every week and get paid within 7 days. This was back in May-August 2010, though, so things may well have changed since then.

[VectraMan]

Yup, just checked my invoice history, and I'd invoice every week and get paid within 7 days. This was back in May-August 2010, though, so things may well have changed since then.

Was there an agent? Again my experience of Parasol many years ago was that they paid when the agent paid them. The agent was doing factoring, but then they take their 15% at least to be able to afford to do factoring. Umbrella companies obviously can't afford to take that risk.

Sounds like the OP is direct via an umbrella with no agent. So yes, that is normal. This is one of the downsides of going direct; getting money out of the client can be a bitch, even if you think you have a good relationship.