Beginning January 1, 2023, payments for all new projects via Catalant’s Expert Marketplace will be processed with Net-60 day payment terms to better align them to when Catalant is paid by clients, which is slightly more than every 60 days. Transfers for both “Your Fees” and “Project Expenses” will be distributed, via Payoneer, 60 days following on-platform Client approval.
Payments for projects launched before January 1, 2023 (including any extensions to those projects, whether before or after January 1, 2023) will be transferred per previously agreed to terms.
Catalant has always paid Experts well before it is paid by Clients. This creates a major cost for Catalant, and that cost gets larger as the business grows. Our clients are large organizations and among the largest enterprises in the world, and they have payment terms that are often times as long as 120 days. Today Catalant pays Experts every ~39 days (30 day payment terms, with payments run twice a month) and is paid by Clients on average a bit more than every 60 days. This means Catalant is at any point in time lending close to $10M to Experts, and that will continue to grow significantly as the company grows. We will continue to keep our commitment of guaranteeing pay to Experts, even when our clients don’t pay us (which is relatively rare but does happen from time to time) and handling all of the work with collections.
We do understand that this change in payment frequency may impact how your practice plans for receivables, and we are eager to ensure the smoothest possible transition. To reinforce your practice’s understanding of this adjusted payment timing and our evolving operations, we’ve answered several important questions that you may have below.
When does Catalant receive payment from Clients?
In aggregate, Catalant receives funds well after payments are transferred to Experts. Again, we do NOT hold funds in escrow and are on average paid by Clients AFTER transferring funds to Experts. Tightening the window from when Catalant transfers payment to Experts and when Clients pay Catalant supports our ability to scale the marketplace.
Will this affect projects I’m currently engaged in?
No. This change only applies to projects for which the applicable agreement(s) governing the project are signed on or after January 1, 2023.
Does it include extensions to existing work?
No, new extensions to existing projects will NOT be included in this change (even if those extensions are after January 1, 2023).
Didn’t payment terms recently change?
In October 2020 and April 2021 we updated payment terms to initiate twice, monthly-batched transfers and then net-30 day terms, respectively. With the transition to non-batched net-60 day payment terms, Catalant continues to transfer payment to Experts regardless of when we receive payment from your clients.
Is there any way to be paid sooner?
We recognize this change may cause a shift in how you operate your practice or structure payments for projects. We encourage you to consider options like up-front invoicing or project "kick-off” payments as part of your project negotiations with clients. As always, we stand ready to assist you in facilitating those conversations with your clients. And if you do find yourself in a difficult situation because of these payment terms please reach out to us any time and we’ll do our best to work with you.
With this shift in payment terms, how should I think about the value that Catalant’s Expert Marketplace provides?
Catalant’s Expert Marketplace remains the only platform built for the world’s top independent consulting practices and boutique consultancies. Using our intuitive technology platform, Experts can build their consulting practices, collaborate and network with other independent consultants, and engage with leading organizations including Fortune 500 clients and private equity firms.
Using Catalant, Experts can streamline onerous back-office and collections activities with enterprise clients to receive more consistent and often faster payment terms than contracting directly with these clients. Fees paid to Catalant are paid by the client.
This enables Experts to focus on consulting projects rather than administrative activities. We continue to implement product enhancements to expedite client approval and payments with tools like flexible payment schedules and kickoff milestone payments.
Beyond these improvements, our team is constantly working to elevate the value that we provide to Experts using Catalant, and we welcome your feedback to strengthen the overall Expert experience.