To not pay over due invoices I just received immediately?

@Merryoldgoat

She was quite clear right from the start that they were never sent an invoice. The other company said they had so of course she asked them to show proof of where they sent it, because she didn’t have one.

She was just explaining the conversation she had with them.
”You owe us a payment.”
”We don’t have an invoice.”
”Well, we sent it.”
”oh, really? Where to?”
”Wait, we didn’t actually send it.”

She never said she had an invoice. The entire point of the OP was that they had not sent an invoice, and have now sent one Kate and demanded immediate payment when payment terms are 5 weeks from the invoice date.

But that’s not what she said - she said the the supplier had sent it but couldn’t tell her where to.

Given the update where op changed her story clarified it was the first time they were received it changed things significantly.

I agree, especially the bit about the other party forgetting to send the invoices, and now trying to cover up their error by backdating them and asking for immediate settlement.

Nonetheless, there should be some procedure in place that informs accounts of the completion of large purchase orders, so they can make provision for the invoice payments in their cashflow calculations. That is what has really gone awry here - the work had already been completed, yet nothing alerted the OP to that effect. For a contract worth 200k, the system should have picked that up.

Obviously it is entirely their fault that they sent the invoices late (and backdating invoices is surely one of the oldest tricks in the book).
So no, I wouldn't scramble to pay them quickly but I wouldn't be unnecessarily awkward about it either.

They'd just go into the system and be processed as usual.

This is bread and butter stuff for accounts/ finance.

Jesus Christ, OP. Your mistake here has been asking non-accountants for advice on accounting matters.

Of course you are not wrong. A company can't just forget to send out an invoice, then send a backdated one and demand immediate payment of 200K! That's their mistake, and it's completely unreasonable of them to expect you to forgo the normal payment term.

I suspect the person in the other company fucked up and is now trying to mitigate their mistake by trying to put pressure on you to pay early, to avoid getting in trouble with their own boss. But it's not your problem.

And yes obviously one a cries for that uninvouced expense. Just don't rush to pay it when it arrives late as the terms are usually 30 days from receiving invoice. Not when they chose to date it.

Similar role and yes. If they send it late, that resets the 30 days to me.

Unless a small contractor with an apology.

Op

I agree with you. You have just received their invoice and the agreed payment terms should apply.

Therefore process it and pay it on the next due date!

However, I wouldn’t put my own cash flow position at risk to sort theirs out.

But the point is that OP's cash flow should never be at risk as the company should know there's a 200k invoice due and therefore budgeted accordingly.

What dates are on the invoices, and what are their usual payment terms? Do they send regular statements? If so, should those invoices have appeared on the most recent statement?

If they've only just sent them, then they've got a bit of a cheek telling you that they are overdue for payment! I suspect that they've only just realised that they hadn't been produced, and they have backdated them so they are in the right financial period for their purposes.

Someone in your organisation should have known that the POs were completed, marked as such, and that should have alerted you to the fact that invoices would be imminent. What procedures are in place for checking that sort of thing?

So in summary:-

They contacted you today to chase payment because their invoice is overdue.
You said “what invoice?”
They said “the invoice we sent you on the…. Oh shit!”

And now you are debating how far out of your way you should go to pay them now rather than within normal payment structure?

I don’t work in accounts although I do work in finance so have a bit of an idea of your world. Personally, at work, I am pretty willing to go out if my way to help fix other people’s fuck ups. As long as (1) they admit they fucked up and (2) they are nice about it.

However, I wouldn’t put my own cash flow position at risk to sort theirs out.

Also, why are engineers raising POs and not the accounts department?

In many organisations the business user who is buying the goods/services raises the PO and receives in the system to say the work has been done.

Part of my role is in A/R and if I cannot prove the invoices went to the client (we use an automated system but my team are cc'd in. System is not 100% and the occasional invoice does go AWOL) then I offer extended credit terms. Maybe not the full period but definitely a grace period.

My A/P colleagues would have raised a PO for 200k and even without the invoice, it would be in their payment forecast for
X period. A large outgoing is planned for.

Bit if both being unreasonable

Supplier should have invoiced on time, their system mess up isn't your responsibility and usually I'd ask for response to receiving invoice and chase after week or so if not response to make sure it's received. Lessons learned for them

On your end I think as others have said it should be clear that the money was due to come in. You must have had some idea it was coming and to keep pushing into week 6 you are clearly pushing money from elsewhere to pay other invoices. Such a large figure it should be realistically set aside

They should give you the full credit terms but you should also have the full amount available to be paid out to them.

Whether you pay it now or as per the terms of the invoice is up to the company, but the money should be available regardless.

Your bad. You should have been expecting the invoices and accounted for them accordingly. You don't wait for the invoices before accounting for the payment. That's madness! If you are an accountant, you should know better.

That’s not what you said in the OP.

Yes - if they’re just sending them for the first time of course it’s reasonable to ask for the usual payment terms.

You said they said they sent them, now you say they didn’t send them.

The you say you don’t have the money. And then you do. Which is it?

Regardless, you have process issues.

For large construction type contracts you would have agreed instalments from both client and supplier side if you are acting as main contractor.

Regardless of how long a contract takes there should be a completion plan and you should know if you’re running to schedule.

I’m incredulous that you weren’t aware a cost of this size was due.

A provision is all well and good but that’s accounting and not cash flow.

There's a difference between following the terms of an invoice and deliberately messing someone around 🤷‍♀️

I don't know what the law is where you are, but in the UK it's 30 days payment terms unless something else is agreed in the contract.

So in the UK you would need to refer to the contract, and if there's nothing different in the contract, tell them they can't backdate invoices and the payment terms are 30 days.

Earlier on in the thread you said you DIDNT have it

I don't agree @topaynowornot.

If someone doesn't send an invoice on time, that's on them and yes, they should wait for payment if that's the terms they've agreed to.

But you're talking about deliberately messing them around and not even having the cash to pay to begin with.

I agree with you @Theredoubtableskins but OP was talking about not having the cash to pay and then deliberately messing them around.