What is self-billing in contract recruitment?
Self-billing is where the agency raises the invoice on the contractor's behalf rather than waiting for the contractor to send one. The agency generates a self-bill from approved timesheet data, sends it to the contractor as the record of what they are owed, and pays it. It requires a self-billing agreement in place with each contractor.
The reason it exists is timing. In a normal cycle the contractor works, submits a timesheet, gets it approved, raises an invoice, and the agency pays. Every one of those steps is a place the week stalls, and the most common stall is an invoice that never arrives or arrives wrong.
Self-billing removes that step. Because the agency already holds the approved hours and the agreed rate, it has everything the invoice needs. The document is generated from data that has already been signed off, which also means it cannot disagree with the timesheet.
There are conditions. HMRC requires a self-billing agreement with each supplier, the document must carry the correct particulars including the supplier's VAT number where they are registered, and agreements need reviewing when circumstances change. It is not something to run informally.
The payoff for a contract desk is that the contractor chase disappears from the week. What is left to chase is timesheet approval from the client, which is a smaller and more tractable problem than chasing dozens of individual invoices.