Employers particularly who pay sub contractors

[workiskillingme]

I'm no expert but is there any reason why payment can't be sent across for a certain time in the day and that it should be paid at varying times?
For instance my husbands company he subcontracts for at times the money doesn't go in until 3pm which means any direct debits due out in the morning can bounce. He gave a really convoluted explanation that his boss had told him why it can't be paid the same time each week but it doesn't seem to make any sense to me? Any ideas why this may be?

Um, I’m afraid I don’t know for sure, but it may be as simple as “when the person in accounts does the payment run”

There are many reasons from delays in the banking system to simply the person processing the payments does so at different times of the day.

Next question is it unreasonable to expect to be paid on the morning of the day of payment

Hi, yes, that probably is unreasonable.

I do not employ subcontractors, but I do pay some invoices (as well as run my section of the company). I pay within the date set on the invoice (7 days, 30 days, whatever) and sometimes earlier, but there is no way I would commit to paying in a specific hour!

Can you move the date of the direct debit coming out?

Yes it's unreasonable to expect payments to be received in the morning. My company makes standing order payments, direct debits and bavs payroll, they all leave our bank account first thing but can take up to 12 hours to hit employees bank accounts. You need to move your direct debits to the following day.

This is basic cash flow management. Then he needs to get it agreed that he is paid the day before, so it's in his bank ready for the direct debits that will go out the next day.

Our payments are set up in advance for certain things like salary, so they come out first thing (usually)

But for payments that are made by hand, like paying bills and contractors, they are done on the day and it does just depend what time our admin person does it

And I would also imagine the same is true of the direct debit company - it will come out on the date, but may be 11am or 3pm or whatever, depending on banking speeds.

Is it construction?
Traditionally, construction work is not paid until after lunch do that everyone doesn't go to the pub at lunchtime.
(May apply to other trades, but construction is where all my experience lies).

I think you are BU re:expecting payment in the morning. Payment terms are usually "by close of business on xxx date".

Depends how the payment is being made. If it's a 3-day bacs or next day faster payment it should go in at 00.01 but it's basically in the hands of the bank and as long as it's in by close of business (usually 4pm) the payer has no further input or control.

If it's a same-day faster payment it depends when the person sending the payment is able to do it. None of our subbies get paid before 11am on a Friday as I'm part time and that's when I start work. Sometimes I need to wait for a payment in before I can send payments out.

Speak to your bank and arrange a small overdraft facility that's enough to cover your direct debits. With many banks you have a deadline (8pm with Santander) and as long as you're back in the black by then you won't be charged but your direct debit will be honoured.

Former payables here who used to pay contractors - we would give them the date they'd be paid but once the payments were released to the bank we had no control over what times. A payment run could be several hundred suppliers, no way would we be able to guarantee a specific hour.

I submit payments for second authorisation, then if the second authoriser confirms before 4pm, it goes on to the receiving bank, who then have their own cycles for authorising the release. And they're all different.

Then if the second authoriser doesn't do it until after 4pm, then it doesn't go to the other banks until first thing the next day, hitting the other banks cycles - again at different times.

All of which is nothing to do with the fact that your husband is responsible for his own cashflow management, and page one of cashflow management is, "FGS, don't have payments set up to leave as soon as possible after the income".

My payments out are staggered over days 2-7 after my pay is due.