Procurement · 3 May 2016

Five questions freelancers should ask agencies before signing up

agencies
Failing to clarify terms in advance could lead to delays in getting paid

Despite the proliferation of exciting new platforms for finding freelancing opportunities, the majority of self-employed professionals are still working through agencies. Business Advice outlined the questions contractors should be asking before they hand over hard-won cash to intermediaries.

According to recent research by the Association of Independent Professionals and the Self-Employed (IPSE), 52 per cent of freelancers go through agencies to find their work, often giving up vast swathes of revenue in the process. If you’re one of them, here are a few things you should be certain of before signing on the dotted line.

(1) What do I get for my money?

With so many sites and apps out there allowing you to advertise yourself, find new clients and collect your fees, agents who charge commission to do the same thing should be offering something that online platforms can’t. Depending on your industry, this might mean utilising their contacts to find you work opportunities in quiet periods, organising industry networking events, or chasing late payers on your behalf.

(2) What’s your admin process like?

Recruitment is one of the most notoriously undisrupted industries out there – despite the fact that most smartphones can take archive-quality pictures of key documents, there are firms out there that still insist you hand-deliver paper timesheets in order to get paid, or will ask for an hour-by-hour time breakdown to be entered onto a complicated proprietary admin system. So make sure you know exactly what you need to do to get paid before committing to anything.

(3) Do I pay even if you don’t get me any work?

While many agents will charge fees that are a proportion of the revenue that they help you earn, others will levy a monthly fee which you pay irrespective of how much work you do for them. Depending on the fee and the reputation of the agency, it could be a risk worth taking, but if you do agree to a regular payment, make sure you’re certain about how long you’re committing to and what notice you have to gie to end the relationship.

(4) How much availability do you expect me to have?

One of the most common misunderstandings between agents and contractors – and something that can sour a relationship badly – occurs when a freelancer is looking for a couple of hours a week and gets bombarded with work until the agent gets sick of them turning it down and stops calling completely. It can work the other way round, too, so whether if you’re hoping to get your entire income from one agency or just looking for pocket-money on top of another job, check that this is a viable proposition at your initial meeting.

(5) Do you expect me to be VAT registered?

As long as a sole trader is earning less than the current VAT threshold of £82,000, the government doesn’t require them to register to charge VAT and pay it to the government. However, some large businesses will only work with VAT registered sole traders, while some agencies will assume you are not VAT registered. Failing to clarify this before you complete your first job with a new agency could lead to delays to getting paid, so be sure to iron out any queries before committing.

If you’re a contractor looking for a new working space, why not visit one of these exotic co-working spaces for a freelancing holiday?

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ABOUT THE EXPERT

Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics – as well as running a tutoring company.

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