Late payment of bigger companies to smaller ones

[Chez2]

I've just heard back from my contact, who said payment was made on Friday, and so should be in my account tomorrow or Wednesday. I image that's either true, or I've prompted them to action and they've initiated a transfer this morning.

 

This is all pretty new for me, and I'm sure I could have handled things better. Escalating slowly and in a professional calm manner. Also, having well defined terms relating to late payment; for example, the 10% increase after 30 days think that Chez2 has seems very sensible.

 

Thanks again for all your very helpful advice.

 

Don't forget to sell it the other way round though. Let them know they get a discount on your standard charges for paying within the thirty days as a lot do like to pay on sixty days. I quote both prices sometimes to focus their minds. I sometimes find the decision maker doesn't pass the payment terms on to accounts. We state our terms on the invoice too. Some accounts departments seem to pay the company that phones up chasing them.

[steveroberts]

the 10% increase after 30 days think that Chez2 has seems very sensible.

 

Remember though, if you insist on the interest, then this will delay payment to you because their accounting system will have a different value on their P/O and your invoice. a useful threat but follow Loob's advice; he knows what he's talking about!

[Chez2]

Remember though, if you insist on the interest, then this will delay payment to you because their accounting system will have a different value on their P/O and your invoice. a useful threat but follow Loob's advice; he knows what he's talking about!

 

We usually find the opposite Steve. We do issue another invoice with the surcharge on so the first invoice can be paid on the original purchase order number. We add the original p.o number to the supplementary invoice too but that never seems to be a problem, especially once they see the quote with T&Cs, some have a multi page contract as well as a quote but not all. Once they know you aren't bluffing they tend to pay on time in future.

[L00b]

It's the law, 30 days late allows for a small late payment charge to be added.

It is indeed...but putting it into your std T&Cs puts you in much better stead with the Magistrate/Judge when you can (i) point to it in your T&Cs and (ii) demonstrate that the non-paying client knew about your T&Cs from day one. That 'better stead' is very useful in costs recovery (which isn't a given in the SCC)

 

From posts on the thread, I think it's useful to remind that there isn't a magic bullet/valid one-size-fits-all approach to client credit and bad debt management: the very nature of what you do and your market will influence heavily what is (or should be) considered best practice (dealing in goods only? services only? high-volume low-margin? the opposite? short/one-time supply contracts? ongoing services over years? <etc.>)

 

Waldo, your publisher customer is not signed up to the PPC, are they?

Edited March 2, 2015 by L00b

[Waldo]

L00b, nope, they don't seem to be on the list of companies signed up to the PPC! Looks like that may not necessarily have helped matters in any case!?

[newcomer01]

The sad reality of small companies dealing with larger companies has always resulted in the larger company holding all the cards and making payments as late as possible.There are so many variables when chasing overdue cash and you have to decide how hard you wish to chase.

If you are a small concern and building a client base then perhaps leniency may be a way forward.In this I mean suggesting stages payments.This does however promote a precedent for future trading.

The next to consider is are they a sole trader or Limited company.

Taking legal action does not always get the money back any quicker,but does allow interest( which is still running at 8% via the court)and court charges to be applied.

To my experience talking is normally the best way of debt recovery.

If Legal is the way forward.

1) County Court

2)Judgement

3) Upon Judgement, option of enforcement by High Court Sheriff or Statutory Demand

[Chez2]

The law states you can charge interest on overdue invoices without resorting to legal action.

[tinfoilhat]

The law states you can charge interest on overdue invoices without resorting to legal action.

 

I tried that with a large multinational whose accounts dept was overseas. As it wasn't a huge amount of money it stopped being cost effective to chase (well the solicitors I chose to use thought that - they stopped returning my calls!)

 

I would advise getting a purchase order number before you proceed with any order if at all possible.

[Chez2]

I tried that with a large multinational whose accounts dept was overseas. As it wasn't a huge amount of money it stopped being cost effective to chase (well the solicitors I chose to use thought that - they stopped returning my calls!)

 

I would advise getting a purchase order number before you proceed with any order if at all possible.

 

A purchase order number doesn't make any difference if they want to pay late. A lot of large corporations have a third part doing their invoicing abroad.

 

Just send the surcharge invoice the same way as they regular invoice with the same P.O on, we do. If they question it I send a copy of the quote with T&Cs. I haven't had to send a link to the regs.

 

I have had to send it once to someone in the UK who was being difficult. I fund out after they made a habit of being difficult with their suppliers. They said they would see me in court, probably presuming I would drop it as it was a small amount. We filed a CCJ and before we knew it a cheque arrived!

 

We have quotes and or contracts so people know there are fees for debt collection etc.