PLEASE is this allowed,,if i charge late payment i get sacked

£100 cost plus £20 penalty if you pay late...

Or

£120 cost and £20 discount if you pay within 7 days...

Which is more attractive?

Interestingly, under VAT legislation both count as £100 cost and £20 penalty, so as the latter is a credit charge and therefore carries no vat, there is only vat on the £100 ;)

Alasdair
 
Upvote 0

Charlie B ACS

Free Member
Feb 21, 2008
1,088
254
Northants
The only real solution is proper credit control procedures.

Ensuring Accounts have received the invoice.
A courtesy call to the site to make sure that they are happy with the work (and by the way, has the invoice been passed to you by accounts)
Follow up accounts before the invoice is due.

This will stop some of the usual excuses. both on "Non receipt of invoice" & quality issues.

If you don't want to deal with them on the basis of payment on 30 days EOM, which is when most companies pay, then another 10 days whilst the run is done... then you need to get a new client to replace them, if you continue to charge these fees, they will make the decision for you.
 
Last edited:
Upvote 0

kg100

Free Member
Nov 8, 2010
20
3
I had a similar experience with a public sector quango which actively advises other public sector bodies that swift payment to small businesses is a necessity and should be a priority.

On the very day they released a publication praising a public sector body for paying all invoices within 72hrs, they started incurring late payment surcharges (which they had already paid for previous invoices) and despite daily reminders and all my contract managers and their managers chasing, they built up thousands of pounds of surcharges.

When it came to the client Director ordering them to pay immediately, they refused to pay by immediate CHAPS to save money and insisted on waiting a further 2 BACS runs before making payment.

They then reneged on the surcharges.

The excuse given was that although the public sector body had to comply, they were bound by their contract to their financial services contractor. So despite the best will of me for chasing and reminding and the best will of my contract manager for chasing to the extent that the client Director became involved, the contract between the client and the other contractor over-ruled.

The result of this long-term has been devastating. Bank charges and bounced direct debits aside, the impact on my business and my personal credit rating has been catastrophic.

In the end, they accepted that they had messed up and paid around 8% of the surcharge as a peace offering with a clear indication that there would be no contract renewal if I asked for the full amount. As it turned out, they only extended my contract by six months rather than twelve anyway.

What infuriated me is that they continued issuing press releases and getting media coverage for their work promoting swift payment of invoices!

The other thing that annoyed me is that while my credit rating was destroyed, the credit rating of the client wasn't even touched.

Lesson: make sure when you sign the contract that all late payment surcharges are agreed in writing in advance with a very clear line of responsibility!
 
  • Like
Reactions: gritbinsales
Upvote 0
You will be amazed how many companies with an APARENT 30 day payment procedure in place can all of a sudden pay instantly, it is just a shame you don't do a job that you could threaten to undo if they take the mickey every month with it.

Yes, of course they can stop using you but if you show them any weakness in chasing payment or removing these fees then they will continue to take advantage of you.
 
Upvote 0

Rainbow Chasers'

Free Member
Nov 20, 2008
438
88
It isn't about posters not knowing how big companies work, we all know that. It is about the smaller companies going under and being taking advantage of just because it is the 'cheaper' option. This is what smaller companies are getting sick of, and why they are attempting to make a stand.

Very hard when half the small owners are saying 'well that is the way it is, why change? I enjoy propping up the big firms at my expense- it makes me feel all warm inside'

Are these big firms going to feed your families and pay your mortgage? No way! They cannot even pay your bills - if you want to feel warm inside, and never get paid, go and do some work for someone that clearly cannot afford you - at least they will appreciate it, and offer you a room when you get evicted!

The 30/40 day payment is fine if they stick to it - but they don't when the time is up, they start giving excuses, demanding extra invoices as they lost the last ones etc, and then go for another 40 day cycle. All this costs your business money.

They pay the big fish, because it hasd a bigger bite - about time smaller business take a lesson from some pirahnas, and start to be small but with a vicious bite, so they don't get walked over!

They only breach the small guys contract because he won't prosecute, and the big one will. Damage limitation. For every small business contract signed, there are probably hundreds of ex-business owners brought down due to them.

Let them walk over you, they will, happily and willingly. walk over you at a cost, and they won't do it again - who cares if they don't renew the contract? Rather work twice as hard and get paid, than waste days of work chasing payment from losers!
 
Upvote 0
It isn't about posters not knowing how big companies work, we all know that. It is about the smaller companies going under and being taking advantage of just because it is the 'cheaper' option. This is what smaller companies are getting sick of, and why they are attempting to make a stand.

Very hard when half the small owners are saying 'well that is the way it is, why change? I enjoy propping up the big firms at my expense- it makes me feel all warm inside'

Are these big firms going to feed your families and pay your mortgage? No way! They cannot even pay your bills - if you want to feel warm inside, and never get paid, go and do some work for someone that clearly cannot afford you - at least they will appreciate it, and offer you a room when you get evicted!

The 30/40 day payment is fine if they stick to it - but they don't when the time is up, they start giving excuses, demanding extra invoices as they lost the last ones etc, and then go for another 40 day cycle. All this costs your business money.

They pay the big fish, because it hasd a bigger bite - about time smaller business take a lesson from some pirahnas, and start to be small but with a vicious bite, so they don't get walked over!

They only breach the small guys contract because he won't prosecute, and the big one will. Damage limitation. For every small business contract signed, there are probably hundreds of ex-business owners brought down due to them.

Let them walk over you, they will, happily and willingly. walk over you at a cost, and they won't do it again - who cares if they don't renew the contract? Rather work twice as hard and get paid, than waste days of work chasing payment from losers!


you would do well to google "ansoffs theory" ...............howver more directly your point only applies if you NEVER recieve the money, grit bin (like most of us real life businesses) will recieve his money as long as he doesnt upset the customer - stop and think.
 
Upvote 0

Indigo Cherry

Free Member
Nov 6, 2008
1,063
222
the winter season is 14 weeks, so I need to sell around 7-10 per day to cover my 12 months

Then mate, get away from this facebook 'like' stuff and get out there and sell your 10 a day! You are primed for it right now (weather wise) and you KNOW how much work you have put in this company!

Hell, I'll even proof-read your site for you for free next week if you want me to! Just get it done and get rolling old chum!
 
  • Like
Reactions: gritbinsales
Upvote 0
G

gritbinsales

Then mate, get away from this facebook 'like' stuff and get out there and sell your 10 a day! You are primed for it right now (weather wise) and you KNOW how much work you have put in this company!

Hell, I'll even proof-read your site for you for free next week if you want me to! Just get it done and get rolling old chum!

getting this done by a member on here, in fact I will email him now
 
Last edited by a moderator:
Upvote 0

kg100

Free Member
Nov 8, 2010
20
3
They pay the big fish, because it hasd a bigger bite - about time smaller business take a lesson from some pirahnas, and start to be small but with a vicious bite, so they don't get walked over!

They only breach the small guys contract because he won't prosecute, and the big one will. Damage limitation. For every small business contract signed, there are probably hundreds of ex-business owners brought down due to them.

Let them walk over you, they will, happily and willingly. walk over you at a cost, and they won't do it again - who cares if they don't renew the contract? Rather work twice as hard and get paid, than waste days of work chasing payment from losers!

Ironically, unbeknown to the finance department, my contract was to provide them with a friendly face to their principal funders.

"So why should we continue funding your organisation?"

"Well, to be honest, now my contract's ended, I wouldn't bother if I were you. Save the taxpayer some bucks"
 
Last edited:
Upvote 0

steve23

Free Member
Feb 19, 2007
703
149
I know it's easy to say and reality is different but....

It can't hurt any business to ask itself the question - what if the bills I've just sent dont get paid ?

Where does that leave you, and how vunerable is your company to other market forces (such as your customer going bust)

All manner of companies have gone down through cash flows problems not of their making.

I remember reading once that when Bill Gates owned Microsoft they always kept a cash reserve of one years wages - so that they (in theory) could not sell a bead for 12 months and the company would still be going !

Extreme (and probably a myth) but you get the idea.

Of course, there's no way I practice what I preach, and live on the edge to the extreme !

All the best

Steve
 
Upvote 0

Geoff T

Free Member
Apr 30, 2009
5,695
1,254
Wrexham, North Wales
OP - couple of questions if I may:

1. How much of your business is in grounds maintenance?

2. Does the late paying customer/client give profit to your company - even though they pay late?

I'm ignoring the emotion shown by you, and numerous others (that's the first thing that has to go!)... key question, does dealing with them make money on the bottom line?

If it does - then proper credit control CAN tighten this up for you... if it doesn't - then you're right to ditch them as previously suggested...

I won't answer the original question again - it's been covered...
 
Upvote 0

Latest Articles