- Original Poster
- #1
The Government are putting out what is referred to as a "Call for Evidence" from anyone with an interest in what is known as "The Reporting on Payment Practices and Performance Regulations 2017".
This Call for Evidence is something I'd like UKBF to contribute to as I'm sure there are people here who's business supplies to companies that fall within the above regulations, including my own business BDG which will be including our own experience in the response we submit.
In short, if you work with large organisations as a supplier how have you found being able to actually start working with them (getting onto their approved supplier lists if relevant) and the how have you found the process of invoicing them and then getting paid. An open question, feel free to share any part of the experience you feel relevant. No need to, and I'd say wise not to, mention actual company names.
Just some snippets from our own experience to get the ball rolling;
To become an approved supplier for some of the financial and organisations we work with can take a long time, the longest took 7 years from first meeting to first invoice. This time frame is often not viable for most small businesses, especially as the depth of due diligence is very heavy and as people in these organisations change frequently we had to restart many steps of the process frequently.
Late payment legislation allows small businesses to charge interest on overdue invoices. We were required to change our invoice terms to 90 days by some organisations or walk away, we can charge interest if payments remain outstanding for 90 days and not our usual standard 30 days. We usually get paid at around 40-45 days which means at any one time I'm floating big 6 figures in outstanding invoices. We are not allowed to use Invoice Finance to factor our debtors, was a requirement drafted into the contracts.
Once you're on the approved supplier list, you're there and it's regular income.
On the flip side, I understand as a company becomes such a huge size it must have strict operational procedures to abide by and they won't deviate from those procedures. Strict controls means you go into these relationships with your eyes open. Because all terms and operating procedures are agreed in minute detail before the first order is placed.
They stipulate their invoice and payment procedures and even if that means you may be getting paid on 60 days, based at least on my experience you will get paid on those 60 days without fail. So at least you know the money is coming in. From my experience it means you have to adapt to fit in with how they work to get the work; so it ultimate becomes a commercial decision whether you want to take on that work or not.
This Call for Evidence is something I'd like UKBF to contribute to as I'm sure there are people here who's business supplies to companies that fall within the above regulations, including my own business BDG which will be including our own experience in the response we submit.
In short, if you work with large organisations as a supplier how have you found being able to actually start working with them (getting onto their approved supplier lists if relevant) and the how have you found the process of invoicing them and then getting paid. An open question, feel free to share any part of the experience you feel relevant. No need to, and I'd say wise not to, mention actual company names.
Just some snippets from our own experience to get the ball rolling;
To become an approved supplier for some of the financial and organisations we work with can take a long time, the longest took 7 years from first meeting to first invoice. This time frame is often not viable for most small businesses, especially as the depth of due diligence is very heavy and as people in these organisations change frequently we had to restart many steps of the process frequently.
Late payment legislation allows small businesses to charge interest on overdue invoices. We were required to change our invoice terms to 90 days by some organisations or walk away, we can charge interest if payments remain outstanding for 90 days and not our usual standard 30 days. We usually get paid at around 40-45 days which means at any one time I'm floating big 6 figures in outstanding invoices. We are not allowed to use Invoice Finance to factor our debtors, was a requirement drafted into the contracts.
Once you're on the approved supplier list, you're there and it's regular income.
On the flip side, I understand as a company becomes such a huge size it must have strict operational procedures to abide by and they won't deviate from those procedures. Strict controls means you go into these relationships with your eyes open. Because all terms and operating procedures are agreed in minute detail before the first order is placed.
They stipulate their invoice and payment procedures and even if that means you may be getting paid on 60 days, based at least on my experience you will get paid on those 60 days without fail. So at least you know the money is coming in. From my experience it means you have to adapt to fit in with how they work to get the work; so it ultimate becomes a commercial decision whether you want to take on that work or not.
