How to Use Standing Offers
Hi, there. Anthony from Contractors Debt Recovery back again on your screen I hope. We’re going to talk now about standing offers. I’ll explain what that is in a second. But let’s start with a problem it’s attempting to resolve. Let’s say you’ve got a client and you’re doing lots of jobs for them at different sites. So typically this is what happens. Each line is a job. Each one has a separate quote, obviously a separate price, terms and conditions, we you hope if you’re doing the right thing, and obviously a whole separate lot of calculations as you go through it. So now what you’ve got is you’ve actually got here for example five different contracts, five different agreements. Even if the contracts, the terms and conditions are exactly the same. You just used the same paperwork between yourself. You’ve basically still got five separate contracts.
Now if you get into a Security of Payment dispute you’re going to have to run five separate claims even though the parties are the same, terms and conditions are the same. The only thing that’s different is the dollars. And if you aren’t schedule of rates maybe even the dollars are the same. But nevertheless if you have five written agreements, you’re going to have to run five separate claims and that’s a lot of money down the tubes and it’s very inefficient as a relationship between you. Now if you do have a client where you’re doing heaps of work and you’ve worked for a few years, you guys should create a standing offer. Standing offer is a single agreement. It’s a single contract where you say, your client say we’re going to engage each other. Wherever it is I’d send you to work, it doesn’t matter. We agreed between us that these conditions apply, these terms, these due dates of payment, etc. etc.
The only thing that will then change, the only change is the price from site to site, maybe a couple of terms one or two if there’s a job specific that relates to the site. Something you particularly want to agree on. But terms and conditions and the parties are the same but only these small differences. It’s a lump sum. If you schedule of rates and you’re not a lump sum contractor even your schedule of rates could fall within the standing offer. All that changes is where you’re doing the work. Now what this mean is if you’re now doing five jobs it’s all under the one agreement. That means if you have to use the Security of Payment Act you only have to do one claim because there is only one construction contract rather than five. You have to run five claims, five adjudications, five lots of fees, really cumbersome.
One agreement, one adjudication, you can wrap all five jobs into a single claim. Because as we know you’re going to be invoicing for each job, separate invoice for each job to keep track of them your client might give you 20 grand. Just apply it wherever cause they’re treating you as a single account. We’re going to talk about that in another little video that’s coming up shortly. So standing offer is the way to go. If you got regular customer create a single contract that you can agree, sign often it, say this is our agreement until terminated in writing by either party. The only thing that from job to job you simply submit a price for Liverpool, a price for Hoxton Park wherever it is and the same offer stands. All right. Now this is an important thing, very few people do it. It’s got enormous advantages. Please think about implementing that in your business and I’ll see you next time.