14 or 28 day invoice?

Discussion in 'General Business Forum' started by blazing_air, Dec 21, 2007.

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  1. blazing_air

    blazing_air UKBF Newcomer Free Member

    301 27
    Is it resonable to ask for payment within 14 days after training received?
    It seems that most companies that i deal with are quite happy to sit on my invoices for 28 days or more and pay in their own good time.
    I changed the invoices to request payment within 14 days to try and speed up this process, but has had little difference and have quite a few payments outstanding now.
    How do i get them to pay up quicker.
    Your views and comments would be appreciated.
     
    Posted: Dec 21, 2007 By: blazing_air Member since: May 19, 2007
    #1
  2. robwoollen

    robwoollen UKBF Newcomer Free Member

    305 20
    I have offered a 5% discount for settlement within 14 days of invoicing. Yet to see how well this will work but everybody likes freebie
     
    Posted: Dec 21, 2007 By: robwoollen Member since: Nov 14, 2007
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  3. Gillie

    Gillie UKBF Legend Full Member - Verified Business

    13,198 1,481
    Once upon a time my old boss had a 7 day turnaround and I would say 90% of the time we got it too.

    Invoice out to client, wait two days, ring them to check they got it and its ok, wait another 5 days and ring them to make sure they have put payment in the post/bacs etc, and if after some 12 days nothing is received a reminder is sent out with the 7 day terms at the bottom of it highlighted.

    Have you actually got the 14 days in nice large letters at the bottom of your invoice?? Might be worth putting a little note with invoices for new people stating your terms and if you have returns might be worth a note to let them know about the payment terms too.
     
    Posted: Dec 21, 2007 By: Gillie Member since: Apr 12, 2006
    #3
  4. Comspec

    Comspec UKBF Newcomer Full Member - Verified Business

    7,138 1,483
    I started out mwith a 14-day terms added to my invoices, but this was largely ignored, so I upped it to 28 days and most people seem much happier with this.

    The settlement discount is a great method of getting people to pay on time.

    If they are taking way too long, the you have to look at your own internal credit control procedures and kick them into shape.
     
    Posted: Dec 21, 2007 By: Comspec Member since: May 8, 2006
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  5. Cred-X

    Cred-X UKBF Newcomer Free Member

    781 65
    Gillie is absolutely right about using good solid proactive confirmation and chasing techniques to verify receipt of the invoice and to pursue the debt.
    When we operate credit control on behalf of our clients it is crucial that we maintain constant contact with the customer and work hard to reduce the length of credit.
    We can appreciate that our customers may not have either the time, the desire or the experience to be chasing up on their debts daily, but it's something that needs to be done in order to maintain cashflow.

    Just remember that if you give an inch they will take a mile :)

    In the new year we will be rolling out a new Credit Control product which we think will provide significant benefits for our clients. I'll be sure to drop a link to the press release in case it helps.
     
    Posted: Dec 21, 2007 By: Cred-X Member since: May 16, 2007
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  6. creospace

    creospace UKBF Newcomer Free Member

    3,932 188
    I have 7 day terms and that's been brought down from 30 day - there really is no reason why people should have credit in business any more - it's just an old tradition that doesn't really belong in this day and age. You get the goods so pay the bill just like when you go to asda or anywhere else.

    I only have one client that continuously breaks the 7 day rule everyone else pays on invoice.
     
    Posted: Dec 21, 2007 By: creospace Member since: Oct 31, 2005
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  7. Richard Glynn

    Richard Glynn UKBF Enthusiast Free Member

    538 133
    Pay on receipt for me.

    Most clients will still take 30 days.

    If it's a new client who has no payment history with you I'd ask for at least 50% up front - if not all of it depending on the value.

    If I know they pay, I can then live with the 30 day delay.
     
    Posted: Dec 21, 2007 By: Richard Glynn Member since: Sep 6, 2005
    #7
  8. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    10,276 2,083
    Why not ask for payment to be made at start of training or with application, I think most companies expect this on traing courses

    You could also offer Card payment options, over 90% of our companies pay with cards at the time of order of goods, we then take the money at dispatch time

    Why give accounts unless you have to
     
    Posted: Dec 21, 2007 By: Chris Ashdown Member since: Dec 7, 2003
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  9. Jeewhizz

    Jeewhizz UKBF Newcomer Free Member

    691 69
    Depends on the work we do. If it's a big contract, with milestone payments, they are made aware from the beginning that if payment isn't made on time, then development stops until it's received. We also won't start anything until payment is received.

    However, in cases where we do the work before payment, we ask for payment once it's completed. As you say, they have the goods & services delivered.
     
    Posted: Dec 21, 2007 By: Jeewhizz Member since: Aug 27, 2007
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  10. blazing_air

    blazing_air UKBF Newcomer Free Member

    301 27
    Thanks for all your replies.
    I've opted for, sending out reminder invoices, with a big OVERDUE stamp on it, asking for immediate payment, for now.
    In the future i think, i will be asking for some form of deposit, or even payment up front.
    It's nice to have a business ear to bend now and again for all of us sole traders, where we havent got a team to bounce idea's off.
    Thanks UKBF Forums;)

    ps.. i already offer; Cash, Cheque or BACS Payments- which should be enough for most companies to cough up.
     
    Posted: Dec 21, 2007 By: blazing_air Member since: May 19, 2007
    #10
  11. Pixels Ink

    Pixels Ink UKBF Newcomer Free Member

    132 7
    I agree with Gary at Creospace.

    I work on a 'Pay On Receipt' basis and 99% of the time I am paid within the week. I have one client who has requested a 30 days which I agreed to as he is one of my best clients.
     
    Posted: Dec 21, 2007 By: Pixels Ink Member since: Jan 5, 2006
    #11
  12. elite123

    elite123 UKBF Newcomer Free Member

    344 7
    7 days, again those good client will take longer anyway
     
    Posted: Dec 21, 2007 By: elite123 Member since: Nov 23, 2005
    #12
  13. RayB

    RayB Banned

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    Another vote for payment with order here. There is no need to offer credit accounts as the norm in my experience. Unless you know for a fact that not offering credit would lose you an order, why do it?
     
    Posted: Dec 21, 2007 By: RayB Member since: Nov 12, 2006
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  14. blazing_air

    blazing_air UKBF Newcomer Free Member

    301 27
    Thanks Ray
    Do you know, it never even occurred to me to ask for payment up front.
    I guess, i just pressumed it was the done thing in my industry, to carry out the training, then invoice afterwards.
    Although i do keep back any training certificates until payment has been made in full.
     
    Posted: Dec 21, 2007 By: blazing_air Member since: May 19, 2007
    #14
  15. self-sale

    self-sale UKBF Newcomer Free Member

    231 15
    Customers in a business to business enviroment look at 30 days being the norm. The argument that why should they have credit with my business by not paying sooner is invalid as clients don't perceive it as credit but only as a reasonable time to pay.
    As suggested in previous posts, giving an incentive to shorten the payment time is an excellent idea.


     
    Posted: Dec 21, 2007 By: self-sale Member since: Oct 25, 2007
    #15
  16. RayB

    RayB Banned

    6,474 242
    I am in B2B selling a commodity (printing) online, and we do £700k+ per annum sales on a strictly payment with order basis (credit card and paypal) - and less than 0.5% of our business customers have ever questioned this.

    IMO too many businesses *assume* that offering credit is a necessary given or the norm, when in fact it often does not need to be :)
     
    Posted: Dec 21, 2007 By: RayB Member since: Nov 12, 2006
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  17. KM-Tiger

    KM-Tiger UKBF Legend Full Member - Verified Business

    9,750 2,593
    Yes, particularly if it's a one off, it's less hassle from the buyer's POV to pay upfront.

    As a buyer of many goods and services, the suppliers that annoy me most are those that implicitly offer credit by not asking for payment upfront, or stating any payment terms, and then winge when their invoices are treated the same as all others - ie payment end of month following.
     
    Posted: Dec 21, 2007 By: KM-Tiger Member since: Aug 10, 2003
    #17
  18. self-sale

    self-sale UKBF Newcomer Free Member

    231 15
    A decision is made at the point of purchase by your customers if they wish to proceed under your terms. If they can't proceed unless they pay there and then, then they won't. Have you considered whether you have lost out on any business because people find this unacceptable?

    My comments were based on a more traditional business to business transaction where a product and service is ordered and then an invoice is produced. It's understanding the clients perception when they receive the invoice and trying to change normal behaviour once the invoice is produced i.e. paying within 30 days or less.


     
    Posted: Dec 21, 2007 By: self-sale Member since: Oct 25, 2007
    #18
  19. RayB

    RayB Banned

    6,474 242
    No, because I have considered if I want this business in the first place and the answer is a resounding no.

    The sector I operate in is a £3bn industry in the UK - and I only need a tiny bit of that cake. So, I have done my research and operate my business accordingly, targeting the business and customers who think the same as us and like what we do.

    This enables me to to keep prices lower as a I don't have to make provisions for bad debts/payers etc.

    Furthermore, if my customers use a credit card they are getting 30 - 56 days interest free credit anyway - so the most vehement objections we ever get are from those that likely have not got the means to pay in the first place. :)
     
    Posted: Dec 21, 2007 By: RayB Member since: Nov 12, 2006
    #19
  20. self-sale

    self-sale UKBF Newcomer Free Member

    231 15
    Well good for you Ray as your way clearly works for you. The original post was put up as somebody is finding it difficult receiving payment in less than 28 days.

    My response/ suggestion was specific to that and not intended to highlight how happy your clients are with your payment policy.:)



     
    Posted: Dec 21, 2007 By: self-sale Member since: Oct 25, 2007
    #20
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