Protecting revenue paid to intermediary.

[Louis Balfour]

We are looking at farming out the management of part of our business to a third party firm. I met with the MD yesterday and I think they have the ability to do a good job and to be innovative.

The rub is that they necessarily need to collect revenue for us (Circa £250kpa) and because they are a newish firm we are not altogether comfortable with that.

The revenue derives from hospitality booking sites, like Booking.com, Hotels.com etc. where guests book and pay via the platform.

Any ideas how we can use them but still protect ourselves? We don't want to find ourselves £20k or so short one month, because the intermediary has had cashflow issues. I presume they have a client account of some sort, but I am not sure that counts for much.

[2 sMoKiN bArReLs]

Can't you open a new bank account where they can deposit but not withdraw?

Or, ask them for a deposit equal to the cash outstanding due to credit terms?

[2 sMoKiN bArReLs]

Or, ask them to sweep the cash across on a daily basis?

[2 sMoKiN bArReLs]

Or ask them to sweep the cash across on a weekly basis? (if daily too hard). At least the risk is much reduced.

[2 sMoKiN bArReLs]

Whatever solution you come up with it will involve a "grown up" conversation with the intermediary about your fears. It's something I've had to do dozens of times back when work was a thing.

(I can scarcely remember, it's so far back in the mists of time )

[Redarress]

Depends how payment is taken. Is the third party being paid an monthly commission ?
If so set up a Woocommerce based website then take payment through Stripe. You keep control of incoming money so risk free and pay third party as a separate transaction
I have made a number of assumptions here.😁
I can help with the ‘mechanics’ of this if you need support.

[Louis Balfour]

Redarress said:

Depends how payment is taken. Is the third party being paid an monthly commission ?
If so set up a Woocommerce based website then take payment through Stripe. You keep control of incoming money so risk free and pay third party as a separate transaction
I have made a number of assumptions here.??
I can help with the ‘mechanics’ of this if you need support.

The intermediary will be receiving payments from probably 20-30 different platforms, including Booking.com, Hotels.com, Trivago, that sort of thing. Probably monthly.

They then need to calculate and deduct their commission, plus services rendered and pay us the balance.