Customer refusing to pay Invoice

[Anna McCarthy]

Project been ongoing for year or so. Customer sent through a PO back in OCT 19
We finished the work having to revise designs, materials for the products according to their requirements after their PO was sent.

We issued an invoice for the product now including the modifications made.

The customer is only prepared to pay for what was on their original PO.

They have used pricing from 2 years ago and have not reflected the additional work done after the PO was sent.

Where do we stand on this?
We have worked tirelessly on this project and now they will only pay what THEY think is our price?
Do we have to accept their amount from the PO or are will entitled to issue an invoice based on our pricing and work?

 

[MBE2017]

What did your contract terms state?

 

[MOIC]

If there was dialogue (emails etc) during the build, which your customer agreed to and you mentioned there would be additional charges, then that may cover you.

If not, can the 'additional work' be removed?

If so, then do that and perhaps accept his offer of payment.

BTW what is the amount in dispute?

 

[Bob Morgan]

Project been ongoing for year or so. Customer sent through a PO back in OCT 19
We finished the work having to revise designs, materials for the products according to their requirements after their PO was sent.

We issued an invoice for the product now including the modifications made.

The customer is only prepared to pay for what was on their original PO.

They have used pricing from 2 years ago and have not reflected the additional work done after the PO was sent.

Where do we stand on this?
We have worked tirelessly on this project and now they will only pay what THEY think is our price?
Do we have to accept their amount from the PO or are will entitled to issue an invoice based on our pricing and work?

I have been caught out in exactly the same way before. Particularly with Large PLCs there is often a ‘Disconnect’ between the ‘Instructing End’ of the organisation and the ‘Paying End’ – They can often be in different physical locations. The Paying End will only see the Black and White of the Purchase Order, and may well be unaware of any Changes or Variations that have taken place – The Left Leg does not know what the Right Leg is doing! It could well be that Correspondence and Instructions have not been passed along the chain. Or alternatively, it could be someone trying to be ‘Smart and Clever’ at your expense! Paymasters also become confused where 'Contracts' exist, in addition to Purchase Orders - Purchase Orders are 'Black & White,' Contracts have 'Shades of Grey!'

On every project it is wise to initiate a ‘Change Order Register.’ When a Change or Variation comes along from the Client, you issue a ‘Change Order.’ This is effectively an ‘Instruction to Proceed’ – In many instances I will NOT proceed with a Variation until the Change Order has been accepted and returned. The Change Order will contain a Description of the Work, Programme Implications and Cost. The 'Cost Element' will reflect 'True Costs' at the time of the Variation, and NOT Historic Costs from the original Purchase Order.

I would also recommend Invoicing Separately for Contracted Works (The Original Commission), and Variations. This avoids ‘Stalling’ should there be Query on a Minor Variation at a later date.

This is no different to the way in which a Building Contractor operates. NO CONTRACTOR will commence work until a Variation Order has been issued by the Architect/SO/PM!

If you need Template Files for Change Orders and the Register, drop me a PM

 

[Big G]

Hi Anna,

You are certainly entitled to charge for any extras or alterations to the works.

If you have anything in writing regarding then perfect but if you d not then you have to go off the verbal contract and pursue them. If needs be issue County Court Proceedings and when they defend it you ask for an experts opinion. The expert should be able to prove the extras or alterations from looking that the original instructions and the finished product.

May cost but should work and you should definitely claim.

As I often say in this forum, I am happy to have a look at the contract and dispute for you completely no obligation if you like as it is difficult to give full and proper advice without seeing documents.

Best of luck!

 

[WGFinance]

Hi Anna

I recommend that you pull together a timeline of events starting from the original PO received and your order acknowledgment which hopefully contains your T&Cs plus any emails received asking for additional work (for future reference request a variation order although email is generally fine).

Remember for a contract to be binding you generally need five elements. Offer , acceptance, consideration, reasonableness and for the work to be competed in a timely manner. It doesn’t have to be in writing but it certainly helps having something tangible to fall back on.

Find the CFO and email them directly making sure you add late payment interest currently 8.01% which accrues per day. Continue to chase daily and do not be bullied! They will try and settle and it is easy to accept the first offer but don’t! Keep pressing. You’re in the right!

I have resolved many disputes without prejudice between independent contractors and building companies and they are generally all the same but stay strong and you will learn a lot in the process.

If however you require assistance I would be more than happy to offer my assistance in recovery on a no win no fee basis.

regards
James

 

[Stas Lawicki]

As above. I would also contact my insurers, get a solicitor and get them to fire off a letter - but a meaningful one. I've been in this situation before and I initiated pre-action protocol and got a solicitor via the insurers who then undid all of my hard work. I changed to another and they were very good. Also, check if you have a payment in place of action clause. If the sum is below a a certain amount you may get a direct settlement from the insurers.

Whatever you do, don't let them get away with it. You've worked for that money, you deserve it. At the same time don't let it dominate your life.

Clear as mud?!

 

[Bob Morgan]

. . . don't let it dominate your life.

The most important piece of advice!