When IT agency does not pay, act extremely quickly

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agency does not pay
agency does not pay

Agency Does Not Pay

This article, on when an agency does not pay, was posted as Comments after an article.

Small Claims Court

Why leave it so long? If the sum owed, when the agency does not pay, is up to £5K you can use the Small Claims Court which requires no solicitor.

1. Invoke the Late Payments of Commercial Debts Act. On each invoice always put the outstanding amount. So if the new invoice is for £1100 and they owe you £1000 then the invoice is for £2100.

Mark it as outstanding. Do not forget the interest.

2. Tell the client

3. Once it looks like the bill may get to 5K.

a) Send the agency a letter telling them they have 7 days to pay up.

b) After that period send in the court papers and the fee.

c) Assuming you win. Go back to the agency and tell them you will instigate winding up if the amount owing is not paid.

d) Do not bluff. If the agency does not pay, then start the winding up proceedings.

Keep Client Informed When Agency Does Not Pay

At all times keep the client informed.

If you get to the point of having to bring in administrators, when the agency does not pay you, it is always better to be first in the queue.

As unsecured creditors we are at the bottom of the pile, so get the claim in early.

ITContractor.com Comment

We knew one contractor, on a project,when Chamberlain Scott went bust, who was owed £48,000 by the agency. There were several others in the 5 figures bracket.

IT Contractors tend to want to believe the agency when they tell them some cock and bull story about why they haven’t been paid.

As soon as the agency are in default by not paying the contractor within the period specified in the contract, the IT Contractor should act – or he, or she, will be tossing good money after bad.

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