What is reasonable time to settle invoice

[Lolleo]

Hi All,

I have carried out work for a client who have still not settled their invoice after 2 months. In my original quotation I did not state payment terms but put 10 days on my invoice. I have called then 3 times and been told it was been processed. They told me 2 weeks ago it was been processed that day and would be in my account the following Monday. Still no payment!

I have since carried out more work for them and issued another 2 invoices today. Again I didn't put payment terms on my quotation (I will in future).

A this stage I'm owed £850 on the first invoice. I dont want to upset these clients as they are a nice revenue stream but obviously I cannot continue like this. My question is at what stage do I stop calling and start writing a bit more formally. Also should I start talking about small claims + interest.

When payment terms are not stated what is a reasonable amount of time for them to settle?

 

[Anonymouse72]

leaving yourself wide open if you're not stating/agreeing payment terms, they could pay when they like. some contractors we deal with don't get paid for 90/120 days.

if you were told payment has been processed 2 weeks ago & you still haven't received it, they would appear to be messing you about.

 

[businessfunding]

Hi All,


A this stage I'm owed £850 on the first invoice. I dont want to upset these clients as they are a nice revenue stream but obviously I cannot continue like this. My question is at what stage do I stop calling and start writing a bit more formally. Also should I start talking about small claims + interest.

When payment terms are not stated what is a reasonable amount of time for them to settle?

At this point they are not a revenue stream, they are an overhead.

You must put in place a full credit control system - starting with terms of trade.

Who are you dealing with at this company (job title) and what is their authority?

 

[Lolleo]

Yes, I've learnt by my mistake. I know from my previous employer that the standard is 28 days and it was never stated on the original quotations. I guess we had good working relationship with our clients.

I have dealt with 3 different people so far at the company.

1) The consultant who appointed me
2) The secretary who told me it was in the list of invoices due to be processed at months end. I called her back again when payment wasn't received and she never returned my call to say why.
3) Some guy in accounts payable who spoke to his colleague and confirmed payment was due for processing that day.

I have yet to get through to the lady who actually deals with all payments.

Funny, as was typing this reply I got a call from a credit check company who gave me a sneak preview of their services. I searched my client and found out they are recently incorporated, however the holding PLC has a 15m turnover last year with good credit rating so should be good for the payment. Having said that, when they pay is another matter and my own fault.

How is best to deal with this situation. I hoping a pretty please can you pay me approach will work.

 

[Tempest Financial]

Hi

Just some general points.

Statutory:

If no payment TMA are mentioned statutory payment terms are 28 days

You can add statutory interest and charges if they go beyond those terms.

£40 per invoice below £1000 recently you can also add reasonable debt recovery costs as well as stat in Teresa of 8 % above Bank of England interest rates.

Feel free t Pm me if you have any questions

 

[Tempest Financial]

Hi

Just some general points.

Statutory:

If no payment TMA are mentioned statutory payment terms are 28 days

You can add statutory interest and charges if they go beyond those terms.

£40 per invoice below £1000 recently you can also add reasonable debt recovery costs as well as stat in Teresa of 8 % above Bank of England interest rates.

Feel free to PM me if you have any questions

 

[Alan]

As you put 10 days on the invoice, and they did not raise a dispute on the payment terms, (for months!), then the payment terms are 10 days in my book.

Time for letter before action.

 

[Homer J Simpson]

Yes, get on the case. No more calls.

Polite but formal letters. If they keep messing you about, court action!

If I'm honest, if I was you I'd look into charging them fees & interest NOW.

If they settle within x days you could offer to drop the fees & interest, but I'd only do this if you want to work with them long terms and they are likely to pay you on time. Otherwise, sod them and don't do any more work for them.

 

[Gecko001]

Many businesses will pay at the end of the month after the date of invoices. So it has almost become standard practice with some firms to assume 30 days terms on the invoice plus another month. Thus two months is the correct time to start pushing for payment.

You should go straight to the person who hired you and not deal with the accounts department or anybody else for that matter in the firm.

 

[estwig]

As you put 10 days on the invoice, and they did not raise a dispute on the payment terms, (for months!), then the payment terms are 10 days in my book.

Time for letter before action.

It doesn't get anymore complicated than this.

You need to man up a bit and send a stern letter.

 

[KM-Tiger]

Sometimes people need prodding, particularly in small companies where someone is juggling paying the bills with other priority tasks. If I'm honest that's true of me sometimes.

In those cases a polite persistence often works.

 

[Anonymouse72]

i completely missed the '10 days on invoice', in that case, if they never queried this upon receipt of the invoice I'd take that as those terms being accepted by them. i'd definitely be chasing as hard as possible now.

 

Hi All,

I have carried out work for a client who have still not settled their invoice after 2 months. In my original quotation I did not state payment terms but put 10 days on my invoice. I have called then 3 times and been told it was been processed. They told me 2 weeks ago it was been processed that day and would be in my account the following Monday. Still no payment!

I have since carried out more work for them and issued another 2 invoices today. Again I didn't put payment terms on my quotation (I will in future).

A this stage I'm owed £850 on the first invoice. I dont want to upset these clients as they are a nice revenue stream but obviously I cannot continue like this. My question is at what stage do I stop calling and start writing a bit more formally. Also should I start talking about small claims + interest.

When payment terms are not stated what is a reasonable amount of time for them to settle?

Have they made any payments to you.:|

 

[Lolleo]

Hi All,

Many thanks for all your replies.

I have let the ball drop again but am back on the case and been looking up 'Late commercial payments' on the gov.co.uk website.

Basically, I have since let the person who appointed me know that I have still not received payment and kindly asked them to check with their account dept to see if there was a problem. This is the response I got:

I'd like to apologise for the slow payment of the XXX project. We should be receiving payment from our client by the end of this month now that the project is complete. Our accounts team tell me it is normal procedure before we can make sub-consultant payments on a job to await payment from our client. Again, apologies this has taken so long but payment should be with you in the next week or so. I will keep you informed on any updates on this matter, in the meantime I have passed on your latest invoices to the accounts team.


It is my understanding that I can now re-issue an invoice to include interest on the original fee at 8.5% and include a debt recovery fee of £40. Am I correct in saying this or it there anything else I should include?


I can imagine the response will be immediate settlement of the original invoice. I really don't want to stir it up too much as would be good to work with them again however want them to know I'm not going to be pushed around either.

 

[The Byre]

We should be receiving payment from our client by the end of this month now that the project is complete. Our accounts team tell me it is normal procedure before we can make sub-consultant payments on a job to await payment from our client.

That's called giving you the run-around in plain English!

You do not have any contractual relationship (I assume!) with their client and you are certainly not beholden to some bogus 'accounts team'!

Ignore that rubbish!

 

[Lolleo]

The Byre,

Thanks for your reply however I have done a background check on this company and they are quite substantial. Approx 120 employees over 7 offices with parent company turning over 15m last year. They have a good credit history also so I'm not to concerned about their financial status.

 

[Lolleo]

Hi

Just some general points.

Statutory:

If no payment TMA are mentioned statutory payment terms are 28 days

You can add statutory interest and charges if they go beyond those terms.

£40 per invoice below £1000 recently you can also add reasonable debt recovery costs as well as stat in Teresa of 8 % above Bank of England interest rates.

Hi Tempest,

It is my understanding that statutory payment is 60 days for non public authorities. Sorry I cant link but this is what Gov site says:

If you haven’t already agreed when the money will be paid, the law says the payment is late after 30 days for public authorities and 60 days for business transactions after either:

• the customer gets the invoice
• you deliver the goods or provide the service (if this is later)

 

[Anonymouse72]

gov.uk linky

well, i'm glad that the law has no hand in running our business, 60 days indeed!

 

[Lolleo]

well, i'm glad that the law has no hand in running our business, 60 days indeed!

Im over 60 days at this stage...

 

[The Byre]

I have done a background check on this company and they are quite substantial. Approx 120 employees over 7 offices with parent company turning over 15m last year. They have a good credit history also so I'm not to concerned about their financial status.

If I were to string my suppliers along like that, I would feel deeply ashamed.

 

[simon field]

The Byre,

Thanks for your reply however I have done a background check on this company and they are quite substantial. Approx 120 employees over 7 offices with parent company turning over 15m last year. They have a good credit history also so I'm not to concerned about their financial status.

Those sorts are the worst IMHO, because sometimes they will pay when they absolutely have to, and not before. If they know the game, they can drag it out for six months, no problem.

Just saying

 

[Lolleo]

Next move please?

Re-issue invoice?

What do I say if some hard nosed account gets on the phone and tries to tear me to shreds!

 

[dag-uk]

Next move ?

Stop dealing with the oiks, get on the phone (or better still send a strongly worded letter, registered post) to the MD/CEO and make him aware of the problem. Start at the top ! He/She will probably pass it down but at least they will be aware of it. Then find another client to replace them.

Dave

 

[Big G]

Right...

Firstly, you stated 10 days on your invoice and therefore should have been paid within 10 days and anything afterwards is overdue and you can begin adding statutory interest and late payment compensation.

Secondly, the fact that they have said that it is their procedure to wait until their invoice is paid by their Client is not correct at all. Your invoice is to them and whatever payment terms that they have with their Client is irrelevant. If this was the case then they should have informed you of the terms at the outset or at least as soon as they received your first invoice stating 10 days.

Because you have been so lenient with them to date they are clearly taking advantage of this and putting you o n the back burner until they receive pressure to pay. They probably have cash flow issues that means they are paying the person that shouts the most.!!

I know that you mention that there is a linked PLC but unfortunately this does not automatically mean that you can chase the linked company for the balance owed to you. You may be able to but I will need the details to confirm this.

If you would like to PM me I can do some thorough checks for you and then give you my full opinion and advice.

Nick

 

[Geoff T]

Nick's got a point here OP - solicitors try the same rubbish all the time... "we can't settle with you until our case is has been settled"...TOTAL codswollop!

What your customer agrees with their customers is none of your concern, so when it comes to adding "the extras", you should charge interest from day 11... and argue the validity of this if - and only if - it gets questioned... right now, you're looking at about £350 in costs, charges, and interest, with the interest accruing at about 20p per day... I'd suggest having a chat with Nick to make sure you get what you're owed...

PS - You're not (on the face of it) going to be able to chase the other company... so I wouldn't waste time on that if I were you...

PPS - everyone... with my "Credit Control" hat on, it IS possible to get customers to pay up without having to think of them as "debtors by default" you know!... just thought it worth mentioning for your consideration!

 

[Lolleo]

What your customer agrees with their customers is none of your concern, so when it comes to adding "the extras", you should charge interest from day 11... and argue the validity of this if - and only if - it gets questioned... right now, you're looking at about £350 in costs, charges, and interest, with the interest accruing at about 20p per day... I'd suggest having a chat with Nick to make sure you get what you're owed...

£350....thats a lot of interest! Would like to know where that came from?

I have calculated interest at 20p per day + £40 debt recovery cost. Looking at £55 total

 

[Lolleo]

Edit...Nick answered my question above!

 

[Root 66 Woodshop]

With all due respect Aran, you're probably really good at what you do hence why they're using your services but you really need to get someone on board that can deal with chasing money.

As other folk have stated, it doesn't matter one little bit when THEY get paid, that's just a brush off hoping you'll accept it, personally I'd go back to them and inform them that you want paying within 24 hours. They accepted your payment terms i.e. 10 day invoice. If they had an issue with that they should have contacted you at a much earlier date. I don't really know of any company that deals in anything over 60 days these days, normally you're looking at 30 days credit.

To be quite blunt, they're taking the Pee out of you and you're allowing them too. You should be telling them that there will be no more services provided from you until they pay what they owe.

Don't take offence when I say this, but they see you as a push over, and with all due respect you're giving them no reason to pay you at all.

 

[Lolleo]

No offence taken Haunted Worlds. Its a learning curve for me and has since prompted me to write up a standard set of T&C's which go out with every proposal.

My previous companies all had accounts people there to deal with this so never had to worry about it before. I'm actually enjoying it in a masochistic sort of way :redface:

P.S. I could not justify getting someone on board to help with accounts at this stage. Hopefully in the future...

 

[Root 66 Woodshop]

I'm pretty certain you can outsource an accounts department, end of the day they're going to chase money for you so that they'll also get paid... some may even take a small percentage of each invoice as payment once received... might be something for you to look into?

 

[Private Detective London]

I'm not sure what your business is as to whether you can put a hold on any of the services you are providing?


What I've found with some clients is that they will get away with whatever they can. I certainly wouldn't do any more work for this client until they had settled outstanding invoices. In the past it has got so bad with a couple of out clients they we have had to insist on payment up front, ultimately though when things get to that stage those are not clients you want.

I hope you manage to get this settled amicably.

 

[Lolleo]

PDL

Not a chance I will be putting my services on hold and can live without the money from these guys however I do want to recuperate my fees at some stage.

 

[estwig]

Aran, keep it up and you will be out of business in on time at all, your client will have forgotten you and have someone else on board, stringing them the same old line.

It is as simple as 'I've done, now you owe'!!

Stop making excuses for your the poor way your client is treating you and for your own lack of action. The time you have spent fretting about this could be time spent getting your money and finding other clients, so your eggs aren't all in one basket.

 

[estwig]

PDL

Not a chance I will be putting my services on hold and can live without the money from these guys however I do want to recuperate my fees at some stage.

That is so pitiful, it's a joke!

 

[Lolleo]

astwid,

thanks for the reply, I think you misunderstood on the second point. I don't intend carrying out any more work for said client until this is resolved.

First point being is that I can take the hit and be patient hoping that there might be a longer term partnership. I don't run an ice cream shop where it all goes to pieces in 5 mins. I do however expect payment in a reasonable amount of time. Bigger companies expect longer terms...

 

[simon field]

It's a bill. Do not under any circumstances let them fund their business with your money - just don't do it.

Would you expect to leave tescos with a trolley full of Doritos saying "I'll pay you next week"?

Get hard. A customer who doesn't pay is a thief. Wise up, nobody on here will ever suggest you pussyfoot around. It's your money.

 

[Lolleo]

It's a bill. Do not under any circumstances let them fund their business with your money - just don't do it.

Would you expect to leave tescos with a trolley full of Doritos saying "I'll pay you next week"?

Get hard. A customer who doesn't pay is a thief. Wise up, nobody on here will ever suggest you pussyfoot around. It's your money.

Point taken but.......

go hard nosed and you never see them again...

be nice, get paid eventually and you have a good revenue stream?

 

[Homer J Simpson]

be nice, get paid eventually and you have a good revenue stream?

Not if they're not paying!

Don't let the thought of a long term working relationship cloud your judgement. They are a rubbish client and you will forever be chasing overdue money.

They're all still drawing a salary even if their client hasn't paid while they treat you like a mug.

Get tough, get paid, get new clients!

 

[simon field]

Point taken but.......

go hard nosed and you never see them again...

be nice, get paid eventually and you have a good revenue stream?

Why would you never see them again?

If they're happy with your services then they won't go elsewhere just because you want paying on time.

'Elsewhere' could well be a supplier who does insist on strict terms.

I've been where you are Aran, and the result was having to chase over £43K through the court system, which took nine months. It was the last invoices on a finished contract. Oh boy that was a lesson indeed.

 

[estwig]

Me thinks Aran is a troll.