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Who Invoices the Client in a Split Fee Placement?

Split Fee Team ·

Agreeing a split takes ten minutes. The eight weeks afterwards are where splits go wrong.

Two agencies, one placement, one client, and a set of questions nobody raised while they were busy being pleased with themselves: whose name goes on the invoice to the client, when does the other agency get paid, what happens if the candidate walks in week six, and who is out of pocket if the client simply does not pay.

Most informal splits answer these after the fact, which is why manual split fee processes fail more often than the idea deserves. Here is how the money actually moves when a platform handles it.

One invoice goes to the client, and it is not from either agency

In a handshake split, the agency that owns the client invoices them for the full fee, then pays the other agency out of the proceeds. That single arrangement causes most of the trouble: one agency becomes the other’s debtor, on terms nobody wrote down.

On Split Fee, the client receives one invoice, raised by the platform. Neither agency invoices the client and neither invoices the other.

The legal shape matters here, because it is what makes the VAT work. The vacancy-owning agency remains the supplier of record; the platform invoices as its disclosed billing agent. So VAT on the client invoice follows the vacancy agency’s registration status, not the platform’s. If that agency is not VAT registered, the client gets a zero-VAT invoice with a footer saying so, which is the correct treatment rather than a rounding-down.

That status is captured when the placement is created, not read live. An agency that registers or deregisters for VAT mid-deal does not change the economics of a deal already struck.

Self-billing inverts the chase

Each agency’s share is settled by a self-bill invoice. Self-billing is a recognised UK arrangement where the customer raises the invoice on the supplier’s behalf, so Split Fee generates each agency’s invoice for it.

One consequence to be aware of, because it catches people out: the agency must not also raise its own invoice for the same supply. Two invoices for one supply is a VAT problem. The self-bill is the invoice.

The practical effect is that nobody chases anybody. In a manual split, the agency waiting on its share is the one doing the chasing, usually by email, usually to a peer it wants to keep working with. Removing the invoice from the relationship removes the awkwardness with it.

Your draft self-bill appears as soon as the client invoice is sent, before any money has moved, so you can see your exact share from the start rather than waiting to find out.

When each side actually gets paid

The sequence is fixed, and the ordering is the point:

  1. Placement confirmed and the candidate starts. The client invoice is raised and sent. Draft self-bills are created for both agencies immediately, so both can see what they are owed.
  2. The client pays. Only now do the self-bills become issuable. This is the gate that matters, and the next section explains why.
  3. Each agency issues its self-bill. An owner or admin clicks issue. The invoice date is set, with payment due 30 days later.
  4. The transfer runs. A daily job pays out to your Stripe Connect account once the due date passes, and records it.

One qualifier on step three. Where the client’s terms carry a rebate scheme, issuance is held back while that rebate is still live, because a fee drawn today could be partly owed back next month. On the Free plan you wait for the full rebate period to elapse. On Pro you can draw the portion that is already safe as each rebate tier passes, instead of waiting for the last one. A placement with no rebate tiers is claimable as soon as the client has paid.

For the actual percentages, how Split Fee works has the split, and is a 50/50 fee split fair works through the numbers against a direct split.

Who carries the risk if the client does not pay

This is the question that should decide whether you trust any split arrangement, and it has a short answer: no agency is paid out of money that has not arrived.

A self-bill cannot be issued until the client invoice is paid. Not “should not”, cannot: the request is rejected. That has an obvious consequence and a less obvious one.

The obvious one is that if the client never pays, nobody gets a share of nothing. The less obvious one is that neither agency is exposed to the other’s client. In a manual split, the agency supplying the candidate is an unsecured creditor of the agency that owns the client, and carries that client’s credit risk without ever having assessed it. Here, both agencies wait on the same event and neither is lending to the other.

Where a client will not pay because of a prior arrangement, a free replacement or a pre-paid deal, the invoice can be reissued to the vacancy agency instead, and the split works out identically from there.

What happens if the candidate leaves in week six

The one everybody has been burned by. In an informal split it is usually undefined, and the conversation happens after the money has been spent.

Two principles apply, and the second is the one worth knowing:

  • Proportional abatement. On a rebate, everyone gives back the same proportion. The client is refunded the rebate percentage of the fee, and each agency and the platform keeps its share of what remains. Nobody absorbs the whole rebate because they happened to be closest to it.
  • No clawback. Money already transferred to an agency is never reversed. If your share has been paid, it stays paid. The rebate comes out of what has not yet been drawn, and where that residual is zero, there is nothing to reduce.

That second rule is not generosity, and it is worth seeing why it can be afforded. It is the other side of the gating described earlier: because issuance is held back while the rebate is live, there is normally still something undrawn for a rebate to come out of. The two rules are one design. Your exposure is bounded by what is still outstanding, not by what has already landed in your account.

The short version

An informal split asks two agencies to agree a number and sort the rest out later. The rest is the hard part: whose invoice, whose VAT, whose credit risk, whose problem when the candidate resigns.

Handled properly, none of that is negotiated per deal. One invoice to the client, self-bills for both agencies, nobody paid before the client pays, no clawback on money already transferred, and no chasing a peer for your own share.

The mechanics are boring, which is the highest compliment you can pay them.

If the admin is what has put you off splitting before, see how it works for agencies, then create your account.