For UK recruitment agencies. We tell you which clients are paying late and whether payroll is covered, weeks before it becomes a problem.
Three things this week
They normally pay on day 31. Invoice 1042 is now on day 43.
£68k of the £142k you are owed sits with them.
That drops to 4 weeks if invoice 1042 slips again.
Your one job this week
Chase invoice 1042 before Friday's payroll
The email is already written. You check it and send it.
Example note. Figures are illustrative.
The problem
FinEngyne watches all of this for you and tells you early, while there is still time to do something about it.
What you get
Plain English, no dashboards to learn. If nothing important has changed, we keep quiet.
Clients paying later than they normally do, spotted before it hits payroll. Not just invoices past their due date.
Client A · 12 days later than usualA warning when too much of your money is sitting with one or two clients.
Top 2 clients · 48% of what you are owedHow many weeks of wages you could pay from the bank today, and whether that number is shrinking.
6 weeks of payroll coveredOne clear job each week, with the chase email written from your real invoice. You check it and send it.
Invoice 1042 · £18.2kHow it works
No software to install and nothing new for your team to learn.
Tell us how your agency runs: how often you pay workers, your usual client terms and your biggest clients.
We link Xero, Sage or QuickBooks with your permission. We only read your figures; we never change them.
Then every Monday after that, plus a heads-up in between only if something urgent changes.
Founding pilot
We set it up with you and go through the first notes together, so they are useful from week one.
Built for
Less suited to perm-only or executive search agencies, where there is no weekly payroll to fund.
Plus £250 one-off setup
Not bookkeeping, debt collection or financial advice.
Questions
Straight answers on cash, late payers, finance and tax, for every type of agency.
Last reviewed September 2026
By topic
Mostly from their own cash, invoice finance, or a mix of both. Temps are usually paid weekly while clients typically pay on 30 to 60-day terms, so the agency covers several weeks of wages up front.
Smaller and growing agencies often use invoice finance, sometimes called payroll funding, to release cash against approved invoices. Either way, the thing that matters is knowing how many weeks of payroll you can cover, and which clients could stretch that.
As a rough guide, about five weeks of payroll on 30-day terms and about nine weeks on 60-day terms. That is the time between paying a worker's first shift and the client's money arriving, if the client pays on time.
Use the full cost in the payroll figure: wages plus employer National Insurance, holiday pay and pension. Clients who pay late stretch the gap further, which is why it helps to watch payment habits client by client.
Because profit is counted when you invoice, but cash only arrives when the client pays. Every new placement adds wages this week and income weeks later, so a growing temp desk can use up cash even while it is profitable.
A big client paying late, or a VAT or PAYE bill landing in the same week as payroll, can squeeze cash further while the profit and loss account still looks healthy.
Compare the cash you expect to have each Friday with the wages going out, client by client, using when each client really pays rather than their terms on paper.
FinEngyne does this for you from Xero, Sage or QuickBooks. Each Monday it shows how many weeks of payroll are covered and which invoice would hurt most if it slipped.
Debtor days are the average number of days your clients take to pay you. For a temp agency, every extra day is another day of wages you are funding yourself.
If your weekly payroll is £20,000, clients paying a week later than usual ties up roughly another £20,000 of your cash. Looking at debtor days client by client, rather than as one average, shows who is causing it.
Yes, on most business-to-business invoices. Under the Late Payment of Commercial Debts (Interest) Act 1998 you can typically claim statutory interest at 8% above the Bank of England base rate.
You can also claim fixed compensation of £40 on invoices under £1,000, £70 on invoices from £1,000 to £9,999.99, and £100 on invoices of £10,000 or more. If no payment terms were agreed, the default is 30 days. Your contract can set its own remedy instead, as long as it is fair.
Source: Late Payment of Commercial Debts (Interest) Act 1998
Not a hard cap for private sector clients yet, but terms longer than 60 days can be challenged under the Late Payment Act if they are grossly unfair to you. Public bodies cannot set terms longer than 30 days, and public contracts pass 30-day terms down to their subcontracts.
The Commercial Payments Bill proposes a 60-day maximum for business clients and 30 days for public bodies. It is still going through Parliament and is not expected to come into force before 2027.
Start early, keep it factual and make it easy to pay. A friendly reminder before the due date, a clear note on the day, then a firmer message with the invoice, amount and approved timesheet attached usually works better than one angry email weeks later.
Send it to the right person, which is often accounts payable rather than the hiring manager. FinEngyne writes chase emails from your real invoices for you to check and send.
Look at when they actually paid past invoices compared with their terms. A client that normally pays on day 31 and has started paying on day 40 is a bigger warning sign than a single overdue invoice.
For large companies, the government's Check payment practices service shows their reported average days to pay suppliers and the share of invoices they paid late.
Source: Check payment practices, GOV.UK
You will usually be an unsecured creditor, which often means getting back only a small part of what you are owed, if anything. You may be able to reclaim the VAT on the unpaid invoice through bad debt relief once it is six months overdue.
The best protection is not letting too much of your money sit with one client, and noticing early when a client's payments start to slow.
Payroll funding is invoice finance set up for staffing. Once a timesheet is approved and invoiced, a provider advances most of the invoice value, often 80% to 90%, usually within a day or two.
When your client pays, you receive the rest minus the provider's fees. It means you can pay workers weekly without waiting for the client's payment terms.
With factoring, the provider also chases your invoices and your clients pay the provider directly, so your clients know you use finance. With invoice discounting, you keep chasing and collecting yourself, and the arrangement is usually confidential.
Factoring is more common for newer and smaller agencies. Discounting tends to suit established agencies with their own credit control.
It varies with the provider, your volumes and your clients. Pricing usually combines a service fee, charged as a percentage of invoices or turnover, and a discount charge, which is interest on the money advanced.
Some providers add fees for credit checks, bad debt protection or ending the agreement early. Comparing the total yearly cost, along with minimum terms and notice periods, gives a fairer picture than the headline rate.
Not always. It depends on how much cash you have compared with the weeks of payroll you need to fund. Some agencies grow on their own reserves and tight credit control; many use finance for a big new contract or a period of fast growth.
Knowing your real weeks of payroll cover, and how your clients actually pay, makes that decision easier, and helps you show a provider a clean position if you do apply.
No. FinEngyne is not a lender or a broker, and it does not give regulated financial advice.
It shows you where your cash stands, how your clients pay and how your position is changing, so any decision about finance is yours and better informed.
Under standard VAT accounting, yes. VAT is due on the invoice when you issue it, not when you are paid, and on temp invoices that includes VAT on the workers' wages. A slow client can mean paying HMRC before the client pays you.
If your VAT taxable turnover is £1.35 million or less, the VAT Cash Accounting Scheme lets you pay VAT when your client pays instead. You can stay in it until turnover reaches £1.6 million.
Usually, through VAT bad debt relief. You can typically claim once the debt is more than six months overdue, counted from the later of the invoice date and the due date, and it has been written off in your accounts.
Claims have to be made within four years and six months. Your accountant can confirm how it applies to you.
From 6 April 2025 employer National Insurance rose to 15% and the threshold dropped to £5,000 a year, so agencies with lots of temps pay more on every hour worked. The Employment Allowance rose to £10,500, which offsets some of it for smaller employers.
If charge rates were not updated, margins may be thinner than your last set of accounts suggests.
From 6 April 2026, if an umbrella company in your supply chain does not pay the right PAYE and National Insurance, HMRC can recover it from the recruitment agency, or from the end client if there is no agency. HMRC does not have to chase the umbrella first.
It is worth checking umbrella providers carefully and keeping a record of those checks.
PAYE is usually due by the 22nd of the following tax month when paid electronically. VAT is due one calendar month and seven days after the end of each VAT period.
For a temp agency these land in the same weeks as payroll, so a late client payment near those dates squeezes cash harder than it would at other times of the month.
Source: Pay employers' PAYE, GOV.UK
It watches the gap between paying workers and getting paid by clients. Every Monday you get a short note: which clients are paying later than usual, how much your biggest clients owe you, how many weeks of payroll are covered, and the one invoice most worth chasing.
If nothing important has changed, it stays quiet.
Xero, Sage and QuickBooks, using their official connections. We only read your figures; we never change anything in your accounts.
Xero
Sage
QuickBooksNo, not without your approval. It can write a chase email from the real invoice, but you decide whether it goes, and it sends from your own email in your name.
One 15-minute call to understand how your agency runs, then we connect your accounting software with your permission. We aim to have your first note with you the following Monday.
Yes. Connections use the official Xero, Sage and QuickBooks channels, access details are encrypted, and your data is never sold or shared.
For the first 10 agencies on the pilot, £250 for setup and then £119 a month.
By type of agency
NHS bodies follow the Better Payment Practice Code, which aims to pay 95% of undisputed invoices within 30 days of receipt. In practice it varies from trust to trust.
Invoices queried over timesheets, rates or purchase order numbers can sit outside that 30 days, so tracking how long each trust actually takes gives you a truer picture than the target.
Public contracts typically carry 30-day payment terms, and the same terms flow down to subcontracts. Delays usually come from invoices that do not match: missing purchase order numbers, disputed hours or rates that differ from the contract.
Clean paperwork and a record of how long each council really takes help you plan payroll around them.
More shifts means more wages going out every week before the matching invoices are paid. Night, weekend and bank holiday rates add to payroll, and one slow trust or council can hold a big share of what you are owed.
Being fully booked is exactly when weeks of payroll cover matter most.
Many schools and multi-academy trusts pay on 30-day terms, though central finance teams, purchase order rules and timesheet queries can stretch that to 60 days or more.
Knowing how long each school or trust really takes lets you plan your weekly payroll around it.
Bookings drop over the summer but fixed costs carry on. Collecting summer term invoices promptly and building up cash before July both help.
It also helps to know your weeks of payroll cover going into September, before the new term's bookings start adding to payroll.
As bookings pick up, weekly pay goes out straight away while the first invoices of the term are paid weeks later. The busier the start of term, the bigger the gap you are funding.
Peak periods such as the run-up to Christmas can double weekly payroll for several weeks, all paid before the matching invoices.
Agreeing volumes and payment terms with clients early, invoicing as soon as timesheets are approved, and checking that your cash or finance covers the peak, not an average week, all reduce the risk.
Longer terms mean you fund more weeks of wages for that client: roughly nine weeks of payroll on 60-day terms, and around thirteen on 90-day terms, if they pay on time.
It is worth pricing that into your charge rate, asking whether the client has an early payment scheme, and watching how much of your total money sits with them. Terms over 60 days can be challenged if they are grossly unfair to you.
Source: Late Payment of Commercial Debts (Interest) Act 1998
Large UK companies publish their payment figures twice a year on the government's Check payment practices service, including average days to pay and the share of invoices paid late.
It is a quick check before taking on a big contract, and worth repeating, because payment habits can change.
Source: Check payment practices, GOV.UK
Contractors are often waiting on money from further up the chain themselves, so labour invoices can get pushed back. Disputed timesheets and missing purchase orders add more delay.
Checking how long each contractor actually takes to pay, not what their terms say, gives you an honest view of the cash you will need.
An agency that supplied labour is usually an unsecured creditor, so recoveries are often small. You may be able to reclaim VAT on the unpaid invoices through bad debt relief once they are six months overdue.
The main protections are spreading your work across contractors, setting credit limits, and noticing when a contractor's payments start to slow.
It can. Public contracts, and the subcontracts under them, carry 30-day payment terms under the Procurement Act 2023, and public bodies are expected to check payment down the supply chain.
If you supply labour on a public project and are paid more slowly than that, you can raise it with the contractor, and complaints can go to the Public Procurement Review Service.
For medium and large clients, the client decides the contractor's status and issues a status determination statement. If the role is inside IR35, the fee payer, which is often the agency, runs PAYE and pays employer National Insurance on the contractor's fees.
HMRC can pursue the party that did not meet its duties, so the rules are worth getting specialist advice on.
Contract desks often have fewer, larger invoices, and a handful of clients can make up most of what you are owed. If one of them pays a couple of weeks late, the effect on cash is large.
Watching how much sits with each client, and how their payment timing is changing, gives you warning before it bites.
It depends on your contracts. Many agencies agree to pay contractors within a set period of an approved timesheet whatever the client does, which means funding the gap yourself.
Some use pay-when-paid terms, which reduce your cash risk but can make you less attractive to contractors. Knowing which terms apply to whom tells you how much cash you really need.
