Distributing Pre-financnig

August 7th, 2008 — Irishkid

Hello,

This is for Research for SME programme

I have a question concerning the distrubtion of the pre-financing. In the Coodinators meeting the Commission stronly suggested that the prefinancing be sent the SMEs and then the RTD performers should bill the SMEs. Recently I have heard from some larger RTD performers who are coordinating projects in the same programme that they are sending the prefinancing direct to the RTD performers who would then send a proforma bill to the smes. This would all be defined in the Consortium agreeent. Is this process also ok?

Thanks

Posted in Payments, pre-financing.

3 Responses to “Distributing Pre-financnig”

  1. fp7discussion Says:
    August 7th, 2008 at 2:05 pm

    Your question is not clear. You say that “some … RTD performers … are sending the prefinancing direct to the RTD performers who then send a proforma bill to the smes”. It is not clear who is sending what to whom? Can you clarify please?
    General comment: the Commission’s intention is that the payment should represent a commercial transaction between buyer(s), i.e. the SME(s), and supplier(s), i.e. the RTD performer(s). The transaction should appear in the SME(s’) books. Thus the money should go to the SME(s) at some point and the SME(s) should subsequently pay the RTD performer(s) on the basis of an invoice from the latter to the former.

  2. Irishkid Says:
    August 7th, 2008 at 3:27 pm

    Hi,

    thanks for the comment. I understand the method the Commission would like to be implemented and it was the method we were planning on using. My question was more that in general chat to other RTD performers they metioned the following method:

    - The Commission pays the pre-financing to the coordinator.
    - The Coordinator sends allocated payments to all the partners. In the case of the RTD performers the Coordinator also includes payment of RTD work.
    - The RTD Performers then send proforma bills to the smes.

    I think they are using this method for ease of use as it avoids lots of billing over and back. This is also defined in the Consortium agreement.

    My question is, is this allowed? I think not?

    Thanks

  3. fp7discussion Says:
    August 11th, 2008 at 2:21 pm

    I understand now what you mean.
    I don’t know whether the Commission would accept this as described. My guess is “no”.
    It might work, though, under the following circumstances:
    The SME(s) and the RTD performer(s) agree up-front in writing, before the Coordinator distributes any money to the partners, on the work to be done and the price to be paid. In effect this means a fixed-price contract.
    The SME(s) then request(s) the Coordinator in writing - “in order to avoid unneccessary bureaucracy, bank charges, etc.” - to transfer the corresponding sum to the RTD performer(s) directly.

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