Umbrella company timesheet: overview for contractors

When contractors come to work via an umbrella company, the issues of how and where to submit your timesheets is a quite an immediate minefield. Especially when there can be multiple companies in the supply chain.

So, asks Lucy Smith, founder of Clarity Umbrella, what do you need to know about your umbrella company timesheet, and where do you start with this staple document to getting paid? 

Multiple companies = multiple timesheets

In the worst-case scenario, you might very well have as many as THREE timesheets to complete. One for the client (so they know how much you’ve worked and can approve it); one for the recruitment agency (so they can invoice the client), and one for the umbrella company (so they can get the invoice sent out to the agency for payment).

But what we see more regularly, especially with the bigger agencies, is that they will have a system which links to the end-client, so a timesheet submission on the agency portal will then request approval from the end-client in order for the agency to then generate a ‘self-billing’ invoice for the umbrella to upload to their system.

Ask your contractor recruitment agency if they’re self-billing

So my top tip? Always check with your agency whether they are a “self-billing” agency. Self-bill, in its very description, tells the umbrella company that they do not have a requirement to send in any invoices to the agency and cuts down on any errors or inconsistencies between the different systems.

It is vital, especially if you’re working via an agency, that you check the processes and procedures, as delays with timesheets will undoubtedly cause delays with payments.

You can also check with the umbrella company to see if they are aware of the process, although be aware they are unlikely to be exposed to the client-end of the chain.

Submitting your timesheet to an umbrella company

If you ask your agency and no, it is not classified as “self-bill”, then you will need to access the umbrella company’s timesheet system, by which I mean you will have to submit your timesheet weekly or monthly, direct to the umbrella.

Once submitted, the umbrella can then raise the invoice accordingly and issue it to the agency for payment.

Be aware -- some agencies are strict on payment terms, so always make sure you submit as you’re expected to do as a matter of importance -- at the end of your timesheet period, allowing the umbrella to issue the invoice as soon as possible, before the clock starts ticking for payment.

Trying to be helpful? Don’t --  just submit at the end of your timesheet period

A quick heads-up though. If you try and submit a timesheet before the end of the period, then the agency may well reject the invoice, and again potentially delay funds until the timesheet is issued in accordance with the timesheet period.

So although it may seem helpful in your eyes to get your timesheet ‘done and out of the way,’ the knock-on effects could actually delay payment to you.

As you can see, timesheet processes can vary from one agency to another, and vary once again if you’re a contractor whose direct-to-client.

How to ask agencies /umbrellas about timesheets (and when)

Either way, ask your timesheet queries and questions at the start of the assignment.

 Sometimes contractors aren’t sure exactly what to say, here. For the avoidance of doubt:

“Dear agency, do I need to submit my timesheets to you and/or the end-client? Do I have a deadline to have these timesheets in by, and do I need to check that the end-client has approved my hours?”

 And similarly, “Dear Umbrella, do I need to submit my timesheets with you?”

When it comes to completing your contractor timesheet, you need to know the invoicing period for your assignment. Is it weekly, fortnightly, 4-weekly or monthly? And then you submit the timesheet accordingly.

But again, ask if there is a submission / payment schedule for your assignment with the agency, as this will hold the deadline for both timesheet approvals / submissions and invoicing deadlines.

Rankin V Giant, a timely reminder…

Finally, some context for you as to why all this isn’t overkill -- and is actually very important. This year, in the case of Mr J Rankin V Giant Professional Ltd, the claim by the contractor (Rankin) against the umbrella (Giant) for unlawful deduction of wages was dismissed, simply because the contractor “did not fulfil his contractual duty to submit time sheets promptly”. As a result of, in effect, forgetting to submit timesheets on time, Rankin’s contractual right to be paid was breached by himself, so his claim was rejected.

It's massively important, then, to ensure you read your contract and act accordingly with all of the contract’s provisions, including on timesheets. Getting things wrong in relation to your timesheet is likely to delay payments to you -- and no contractor wants that given most payments are dictated by the payment terms from the end-client and/ or agency, and at its worst, wrongdoing on timesheets could even forfeit your right to be paid.

Editor's Note: You can download our free invoice template here.