The following tests ask a Yes/No question. If you answer yes, you score points. At the end the total number of your points decides which category you are in.
- 0 – 10 Points – High Risk
- 10 – 20 Points – Medium Risk
- 20+ Points – Low Risk
Your answers must be supported by evidence about your company.
9. The Customer Risk Test (Score – 10 points)
Have you been in a position where your company has been unable to recover payment:
a) For work done in the last two years
b) More than a tenth of your yearly turnover?
– Accounting records demonstrating write-offs
– Copies of letters and emails from intermediary & end client
– Copies of letters and emails describing legal action for recovery
10. The Invoice Test (Score – 2 points)
Do you invoice clients for work carried out before you are paid, and negotiate terms of payment?
– Records of invoices
– Copies of letters & emails about billing
11. The Right to Substitution Test (Score – 2 points)
Does your business have the right to send a substitute?
– Clause in contract
– Information about who would supply the substitute
– Information about who would be responsible for the substitute’s performance
– Details of who would pay the substitute
– Description of what level of veto the end client has
12. The Replacement Worker Test (Score – 20 points)
Have you employed someone in the last two years to do work you have taken on?
E.g. sending someone to work instead of you, or sub-contracting.
Your business maintains responsibility for the work and payment to the replacement.
– Details of end client
– Information about who was hired
– Description of why the substitute was hired
– Details of who was responsible for finding/paying the substitute
– Payment terms
– Audit trail of payment from end client to intermediary to substitute.