Pay-when-paid.

Pay-when-paid is a payment arrangement in client–intermediary–professional chains: the intermediary pays the professional as soon as — and only after — the end client has settled the corresponding invoice. The credit risk on the end client therefore does not sit with the intermediary.

How it works

In a pay-when-paid chain the professional invoices the intermediary and the intermediary invoices the end client. Payment to the professional follows the end client's payment, usually within days of receipt. The clause must be explicit in the contract; without it, the ordinary agreed payment term applies.

The wider context is set by statutory payment-term rules: in the European Union the Late Payment Directive caps business-to-business payment terms and attaches interest and collection costs to late payment. Pay-when-paid moves the moment of payment down the chain, but does not release the end client from those statutory obligations.

Pay-when-paid at Hero

At Hero, pay-when-paid is the default in the paid tiers: it is part of Silver (€79 per contract per month, together with contract & pay and classification checks) and carries through Gold and Platinum. Hero states the arrangement explicitly up front — following the house rule "everything we say is 100% true" — so professionals know exactly where they stand.

In addition, Hero sells a benefit that inverts the model: "always paid — even if the end client goes bankrupt, 100% credit-insured." Professionals who take this option are paid regardless of whether or when the end client pays; the risk is fully credit-insured. Two flavours thus coexist: the transparent default and the insured variant for those who value certainty over cost.

Assessment

The trade-offs are mirror images:

• For the intermediary: no financing burden and no debtor risk, which keeps fees low.
• For the professional: dependence on the payment discipline of a party they hold no contract with — mitigated by the credit-insured option.
• For the end client: no difference; statutory payment obligations apply in full.

Industry commentary therefore judges pay-when-paid chiefly on transparency: the model is defensible as long as every party knows the terms in advance and an insured alternative exists.