Choosing the Right Agency

You are in the pub having a pint of fresh orange and lemonade after a tiring game of 5 a side.  The subject of contracting through an agency comes up and one guy, who you know a bit, says:

“You should go with XYZ Ltd – they are really good.”

The next morning you google XYZ Ltd, find their telephone number (it’s a London number) and call them saying you wish to contract through them for an upcoming contract with client ABC Ltd. Simples eh !

Unfortunately not... You start your contract, work your first month, invoice XYZ Ltd and wait for the money to hit your bank account... And wait... And wait.

After 15 phone calls to XYZ Ltd and 15 promises of payment, you receive... a letter in the post from the recently appointed Administrators of XYZ Ltd. There is no prospect of recovering the money due to you from the Administrators – the few assets that XYZ Ltd will be swallowed up by the Bank that they owe a large amount of money to – the client, ABC Ltd, has already paid XYZ Ltd for your month’s work so will not pay you as well. You have worked a full month for nothing.

So how could you have avoided this situation? Without too much effort and very little cost actually – just do your due diligence! Try following this checklist:

- Find out the correct limited company name (or company registration number) of the agency and look them up on Companies House. They have a new Beta service which gives you heaps of info on the company for free!

- Check if their accounts filing is up to date – overdue accounts can be a sign of problems.

- Check if their latest accounts show them as profitable and their balance sheet as strong.

- If they are part of a group, check out the finances of the parent/holding company.

- Check out their website - most will look very professional – focus more on whether they have a local presence – who will be handling your contract and payments – are they named or is it just a service centre?

- Ask the agency for contractor references and take them up! How quickly do they get your contract out? Do they really pay on time every time?  Do they stay in touch throughout your contract? How easy is it to get hold of your named contacts?

If you get the right answers to the above questions you will go a long way to ensuring that next time you start a contract you WILL be paid - in full and on time!