Short Term Contract Debt Collection

Trading as a limited company the creditor provides IT consultancy services and specialises in database management systems. They work mostly for large companies through recruitment agencies on short term contracts. The business model has served the director of the company well, they enjoy the flexibility of short-term contracts and taking on new challenges regularly. They have built up a good reputation in the 5 years that the company has been operating and they are able to command fees of up to £800.00 per day.

New Contract Agreed

The company director is based in London; however, they often work remotely from home, which has enabled them to work on projects for companies based in the UK, France, Germany, Hong Kong and the United States. They were approached by an Oxford-based recruitment agency with the offer of a six-month contract working for one of the UK’s largest insurance companies. At a rate of £600.00 plus VAT working 22 days per month, the offer was accepted, and the contract was duly signed by all three parties.

Everything went well, the director enjoyed the work and the insurance company were happy with the work. Invoices were submitted at the end of each month and paid 14 days later as per the contract. That was until the end of month 5 when the director was offered a six-month contract extension. Unfortunately, the director was unable to agree to the extension as they had a holiday booked and would then be starting work on a new contract through a different recruitment agency. Although the working relationship with the end employer was unaffected, the relationship with the recruitment agency soured when the month 5 invoice was not paid on time. The invoice was still unpaid at the end of the six-month contract when the creditor issued the final invoice.

Contract Completed as Agreed

When the company director chased for payment of the overdue invoice they were baffled when the agency advised that they were disputing the invoice on the grounds that the days worked did not match the days invoiced. The bafflement turned to anger when a search of social media sites led to the discovery that the recruitment agency had a reputation for disputing invoices at the end of contracts.

Advocate were instructed to collect payment of the overdue invoice and commenced action the same day. Upon receipt of a Notice of Court proceedings, the debtor responded by regurgitating the same spurious dispute. Aware that our client had completed the contract to the end employers satisfaction and left on good terms, we enquired if they would be prepared to contact them for confirmation of the days worked. The client was quite happy to do this and the IT manager who oversaw the work at the insurance company was more than happy to supply logs from their internal system that captured the information required to prove that our client had indeed worked on the 22 days invoiced.

Payment Agreed

As soon as we presented the evidence to the debtor they agreed to arrange a same-day payment. The payment including Advocate’s fee was received that day and the total invoice sum of £15,840.00 was transferred to our client via a faster payment.

The client contacted us again 11 days later as the final invoice was due for payment that day. We discussed us commencing action immediately, which given the debtor’s earlier conduct in raising a spurious dispute would have given our client satisfaction. However, it was agreed the client would contact the debtor to request payment and advise that if payment was not made immediately, Advocate would again be instructed and again additional charges would have to be paid.

The invoice was paid the next day. And the following day our client began their holiday looking forward to starting yet another new contract on their return.

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