Not when I started, but after I'd been contracting for five years I ended up in a contract where the client ran out of money so couldn't pay me. I figured that because I was hired through a recruitment agency I was safe, but apparently not.
For those who aren't aware 'contracting' in Europe refers to what is effectively a short term employee who charges X/day. Clients usually pay net 30 - 60 and often you work through a recruitment agency. The agency is supposed to vet the employer and provide a good source of candidates, but for the fees they charge clients (10-30%) IMO they don't provide anything near that value.
This led to mistake after mistake on my part and now the client owes me £40k. I ended up working with a soliticor, and we have now agreed on terms for then to repay me, but I ended up with a pretty bad deal (it's effectively an interest free loan to them).
I've learnt quite a lot of lessons though:
- Under no circumstances work for free, if a client asks you to, it simply means they do not value your time. There's plenty of businesses who are willing to pay you so it's not worth the hassle. The only exception I'd say is if you are getting founder level equity (10s of %) in a startup you believe in.
- I had a bad feeling about this contract from my first week when I got in the office, guess I should have listened to my gut feeling :-)
- If a client is putting a lot of stress or pressure on you, fire them. There's plenty of good clients out there.
You'll also see terms like "2/10 net 30", which means if the client pays in 10 days, they get a 2% discount. Otherwise payment in full is expected by day 30. Your accountant would have a "Sales Discount" account to record it as an expense if they get you the check early.
For those who aren't aware 'contracting' in Europe refers to what is effectively a short term employee who charges X/day. Clients usually pay net 30 - 60 and often you work through a recruitment agency. The agency is supposed to vet the employer and provide a good source of candidates, but for the fees they charge clients (10-30%) IMO they don't provide anything near that value.
This led to mistake after mistake on my part and now the client owes me £40k. I ended up working with a soliticor, and we have now agreed on terms for then to repay me, but I ended up with a pretty bad deal (it's effectively an interest free loan to them).
I've learnt quite a lot of lessons though:
- Under no circumstances work for free, if a client asks you to, it simply means they do not value your time. There's plenty of businesses who are willing to pay you so it's not worth the hassle. The only exception I'd say is if you are getting founder level equity (10s of %) in a startup you believe in.
- I had a bad feeling about this contract from my first week when I got in the office, guess I should have listened to my gut feeling :-)
- If a client is putting a lot of stress or pressure on you, fire them. There's plenty of good clients out there.
- Do not ever work for free https://youtu.be/jVkLVRt6c1U