Agency change of payment terms

**kingcook** · 11 February 2014, 08:18

What does it say in the contract about payment terms?

If you originally agreed to 7 days (and it's stated in the contract) and they want to change it to 30 days, that's a change of contract.

Perhaps you could start chaging them interest from a previously agreed timescale?

Does the contract say that they can change the payment terms from time to time? I wouldn't know if that were legal or not.

It happened to me a couple of years ago, although not a big of a gap between changes. I just agreed to it because it was my last payment of the contract anyway.

If I had reason to believe that the agency had cash flow problems, I would probably not agree to a change such as this.

IANAL.

**northernladyuk** · 11 February 2014, 08:50

Some ideas:

1 Get a credit check on agency.
2 Join PCG plus for cover (7.5k?) in case agency fails.
3 Don't agree. Talk to end client if there's a problem.
4 Agree but increase your rate slightly.
5. If you are on monthly timesheets and invoices, request a mive to weekly as a quid pro quo.
6. Move on. Aren't you bored yet?

**SneakySimon** · 11 February 2014, 10:00

Thanks

Originally posted by northernladyuk View Post

Some ideas:

1 Get a credit check on agency.
Just done that, seem ok though thats up until mid August 2012

2 Join PCG plus for cover (7.5k?) in case agency fails.
Looks good - I remeber seeing this on a differnt thread but was searching for the wrong name - £220 PA seems a pretty good for £7500 of cover.

3 Don't agree. Talk to end client if there's a problem.
On that!

4 Agree but increase your rate slightly.

5. If you are on monthly timesheets and invoices, request a mive to weekly as a quid pro quo.
They refused to move to weekly - there systems don't accodate apparently

6. Move on. Aren't you bored yet?

Haha - getting that way but it is steady work with good pay and I am able to WFH which is great as I have a 2hr commute - fairly rare situation in the City!

**jmo21** · 11 February 2014, 10:10

Originally posted by SneakySimon View Post

They refused to move to weekly - there systems don't accodate apparently

bollocks!

**DirtyDog** · 11 February 2014, 10:15

If the contract says seven day payment terms, then that's what they are legally obliged to stick to. If they want to change that, then they need to negotiate.

Personally, unless there was an increase in the rate that they are paying (and make sure it's not being passed onto the client), I don't see why I should increase my business risk to help them. They agreed the contract, they either need to stick to it, terminate it or pay me a premium to agree a new one.

If it was the other way round (they agreed 30 day terms and you suddenly said you wanted 7 day terms because that's what your systems require), they'd be more than happy to tell you where to go, so I'd do the same.

They aren't going to get rid of you, piss of the client, and kill the golden goose just because you think they should stick to what they agreed.

Point out that they keep paying late, and so that sets alarm bells ringing. Point out that you should really be charging them interest and penalties for late payment, but have let it slide so far.

Put briefly - refuse.

**kevpuk** · 11 February 2014, 10:24

Originally posted by SneakySimon View Post

<snip>
1. My bank pays agency immediatly on my timesheet being approved
<snip>

What others ^^ have said......

To me, a particularly worrying part of what you have said is that the Client is paying Agency immediately on approved timesheet, so there can be very little argument as to why the Agency cannot pay you more or less immediately.
I guess we can objectively understand why an Agency has longer payment terms to reflect delay in funds from Client(s), but when the dosh is in their hands anyway there is no sensible reason not to pay you straight away!

**Safe Collections** · 11 February 2014, 10:25

Originally posted by SneakySimon View Post

1. My bank pays agency immediatly on my timesheet being approved
2. In the past 6 months, majority of payments to me from agency have been late - variety of excuses
3. The agency moved office - I am no real estate expert but certainly to what seem to be cheaper offices

You are absolutely right to have some concerns with this proposed change to the agreed terms, as any one of the points above would likely be an indicator of cash flow problems. But all three together means it is a virtual certainty that something serious is amiss.

We would not recommend any increase in credit terms at all based on what you have said. The agency agreed 7 days in the contract so if they want to change these to your detriment then they need to be offering you something significant, such as an increase in your rate.

Problem is, if they do have cashflow issues they could agree an increase and then go pop, thus never paying you anything anyway.

As others have said PCG do have agency default cover, but our understanding is that it is not retrospective, so you would need to check it covered you in this instance. If it does cover you it would cover £7.5k eventually, so does mitigate some risk.

Credit insurance is unlikely to be useful, as no credit insurer will cover an invoice to any company that isn't rock solid financially.

Can't you leverage you long time commitment to the client to keep your payment terms as they are? Or go direct/elsewhere and stay with client co?

If you want to PM us the agency name we are happy to have a quick look for anything untoward

**SneakySimon** · 11 February 2014, 11:01

Credit Check

Thats for suggestion - plan to stand firm on the 7 day and see what they come back with.

FYI, I did an Experian credit search and they are certainly a mixed bag with a worsening payment pattern and Experian rate them as high risk (on the cusp of maximum risk) mixed with a handful of positives..

**eek** · 11 February 2014, 11:02

WSCS

Emphasis that you won't accept any change in payment terms and that they have already been late a few times.

Then the next time they are late with payment extract yourself from the contract and move to another agency...

Agency change of payment terms