To wonder why people think it's ok not to pay tradespeople?

[MrsWinnibago]

Just musing. I work as a freelance writer...don't judge my skills by the stuff I write on here! This is my resting place and I let everything go to pot here.

Anyway...I have a client who is great in that he's always there with lots work for me but he always takes a few days to pay me.

I invoice on the Monday for eg. and he goes to ground for a few days. I don't see why freelancers and tradespeople have to wait.

My DH is a painter and decorator and sometimes has the same issue. My BIL is a builder and OFTEN has this issue.

DH just told me that once, he did some work for a well known restaurant and stated that he'd need the invoice paying immediately on completion and the manager said "Most building companies have a 3 month period for payment....a window."

Er...so what?

Who made THAT the norm??

Tradespeople and freelancers need their bloody money! I wouldn't go into Topshop, take a dress and say "Oh I'll get this paid next week for you...promise!"

It's shit!

For any freelancers not aware of it, the 1998 late payments act allows you to claim compensation and interest on seriously overdue payments. I don't use it lightly as obviously it will piss off the client, so it's best saved for when they are months late and you don't plan to work with them again anyway. But when I have used it, the result are spectacular. Money in next day. Because they know once you are onto this, the money they owe you will go up and up unless they get your invoice off their system.

It's not the case that it's impossible to pay people in a month, "especially during holidays". That's an outrageous excuse - though absolutely true that things are even worse during the summer and over Christmas. But if they wanted to, they could pay you within a week and some companies do. They just have to prioritise it, and of course many companies don't, and deliberately keep you waiting and make you nag them, because it's better for them if the money stays in their account as long as possible.

But when you use the late payments act - hey presto. They can do it. I've also had the experience filthiest describes, where they don't pay until they need you again and you say you'll start work when you get paid for the last job. Ta-daa - instant money.

This is where you need a good contract with penalties for late payment.

There is no way we would accept this from any supplier or contractor. We would expect them to sign our finance terms or get excluded from the tendering process. SlimJim is right you would lose out on work in our organisation.

I feel your pain!

We are self employed, and our terms are 30 days from the date of the invoice. So, the client gets the time it takes for us to do the work, and then another 30 days to pay, and yet so many of them don't pay in the time.

Then you ring them up, and they tell you, "oh, I'm sorry, but I'm having difficulties because people are not paying me promptly - it's so frustrating."

YA DON'T SAY!

My dh has the same problem. He is skint at the moment even though he works flat out. The problem is he pays for all the materials. He has worked the past three weeks and spent over three grand on the materials out of his own pocket. He hasn't been paid for any of it and we are now panicking. Payment is on it's way and should be within seven days.

He's had people not pay for months. Even friends will keep it going for months without paying. Some haven't paid at all expecting dh to pay for them

Im owed thousands by one of my customers. I've begged and borrowed to pay my sub contractors.

I know some companies don't make payments until they do a batch but this chap has a v small marketing agency and he's expecting large batches weekly....well this means I can't take other clients on as I'm a one woman show!

He's very understanding though....I emailed him yesterday and he said he will personally tell the guy who does the accounts that I have to be paid on invoicing.

I am very lucky that people pay me . I work for myself as a lawyer. I tell them what it will cost in advance, I invoice every month on the nail at end of month and if they don't pay I do no more work. Occasionally I get a problem but it not a problem of not being paid after 3 days (!!!) but more like 3 months. I do a lot of freelance writing too for pay and the standard payment from the main publisher who pays me is about 6 weeks after the invoice. I don't think that's unusual at all. The same when I give talks for pay - usually they pay in about 6 weeks. I agree though that that is much less fair than the plumber paid on the day. Why should you wait just because you have not got your hands dirty?

What many of my clients do is:

1. have a signed contract with payment terms in it (although even without that the late payments law mentioned above does have a default 30 day payment period now if you have not agreed something else).
2. make it clear when payment is due when first taming on that customer and changing before signature any longer period - I have a case which was in the papers recently and one issue in it is the customer pays people 180 days after supplies. I looked at another contract recently and the payment is made 180 days after supply. That is appalling.
3. other clients such as in IT who have to pay subcontractors etc might well ask for and get 40% of the price on signature of the contract before any work is done (freelance writers are not going to get that however).

I think it's unrealistic to expect companies to be able to regularly pay you on receipt. There are authorisation processes and staff can be on holiday or out of the office, or just be busy with other things. Most suppliers are on 30 days and we have freelancers on 7 days (many don't put payment terms on there) and in practice they tend to get paid on the next batch (twice a week) after the invoice has been checked by the orderer, authorised by the line manager. But it has to go through at least two people before it can be set up as an online payment. And then online payments need to be authorised by 2 other people. The minimum number of people needed to make a speedy payment at my work is 3 (with appropriate access and authority) but maybe as many as 5. But we're not just all sitting at our desks waiting for invoices to come in. We have other duties.

I think it's wrong to make suppliers wait more than a month as some companies seem to do as standard. That's arseholery.

LittlePeaPod it is a right enshrined in law - it's not something you can choose to accept or not. It's companies like yours that make it so hard for small businesses to succeed, and it's a totally immoral stance that you're taking there. Tantamount to bullying.

BIWI it's not immoral it is the nature of business. I worked in procurement for a very large company I've lost count of the times I've had a supplier complain they have not been paid to their payment terms, I've then had to refer then to our terms and conditions that they signed stating our payment terms. By the way it was 60 days as standard.
I always arranged for small freelancers to be paid 14 days turn around

Waffly it's just as unreasonable for companies to expect sole traders to provide services with FUCK ALL TO EAT!

Sorry. Feeling a bit pissed off about the realities of life.

I pay any 'tradespeople' the day I receive the invoice.

However, we have a business and contractors etc get paid when the person who does the bookkeeping is in which in once a fortnight.

We won't pay contractors at work weekly though - they need to invoice monthly and they'd get paid within 14 days of that invoice which is pretty standard.

Mrswinnibago speak to the purchaser at the company if you can, ask them to renegotiate your payment terms. It's worth a try, in large companies it is them that set payment terms.

Smaller companies are usually better at paying. We took three months once to be paid by the BBC.

The terms for other suppliers where I am are unbearably slow. I couldn't deal with that so got it changed to 30 days invoiced weekly, paid on time.

But then I won't work for people that don't pay on time, too much faff and stress.

I love the freedom of working from home but I'm not spending it chasing people. I had one non-payer, and once was enough.

I think as a contractor you need to make sure you have enough in reserve so that you assume you'll get paid in 30 days. We just wouldn't commit to weekly invoices on immediate payment terms.

And as a business we've lost tens of thousands in clients who haven't paid - it is very galling. Especially when they re-emerge like a phoenix 2 weeks later

On the contrary I am actually shocked at our local trades peoples
blasé attitude to payment. They must be stinking rich! A guy helped us repair 3 gates last year, bought new locks put them on the gate, took gate off its hinges and repositioned it, he was meant to come back next day to fix a cupboard. Never heard from him again, no invoice ever appeared. Left several messages on his phone but no reply.

Plumber came to fix a problem with shower. He had to remove shower doors to do repair, at £150 worth of work, he left us to test the shower for 3 days Plan was to return to do some plastering. That was about 8 months ago! Been ringing him since that shower room is now okay and he can come to finish off job. No news, never answers his phone ( he has form for this! Last time he did about £200 worth of work, we didn't hear from him again for 2 yrs, when eventually he showed, he seemed not bothered at all and just said he'd been busy .

Gardener, lovely guy! Very difficult keeping track of his invoices, as his invoices are so out of date. He just grins and say he's had a lot of work Weird, just weird.

They much have lost loads of payments like this if ours is anything to go buy. I would've thought they'd need the money sharpish.

We pay work people - electrician etc as they finish.

The 180 pay payment terms were all those of very powerful large buyers of commercial goods sold in the consumer/retail sector and their suppliers were small or medium sized businesses with no choice except to accept those terms,. Italy seems to be the worst. I got paid about 9 months late yesterday for a subscription to a journal of mine!

In practice most commercial suppliers in the UK try to negotiate 30 days of invoice payment terms for services but not domestic contractors. Our hedge people put the invoice in the day they do the work and want paying immediately. My daughter's plumber was nagging for payment after 2 days. Plenty of the better traders for services like that want paying a lot sooner for works done at home compared with business to business services.

I regard getting paid as just about the most important thing I do in my business.

Actually I should have said a lot of solicitors will take money up front ("money on account") before doing any work which can be very wise in case they are never paid, although I don't do that.

Me too - on the importance of being paid.

Germany is woeful, a German company still owe me, but the contract is with someone I deal with so I've let it go.

But since then I'm precious about time wasted on getting the payment. Ie no stress and no fuss.

DP has been self employed as a web designer fir 10 years and the longest he has had to wait to be paid is two years!

Usually it's around three months.

When I do work on the 1st of the month, I often don't get paid until at least the 28th! Shocking!

Wait, you're complaining about a couple of days for someone who is presumably in full time work and has other life commitments to pay an invoice? Which might involve getting into a bank which is only open during normal working hours? Not quite so shocking then. You should write an expected payment date on your invoices (I have been self employed, this is pretty basic). Usually that's about 2 weeks. Whining about people not paying within a few days is ridiculous. YABU.

BIWI - BecauseImWorthIt. As with any business we are there to grow the business and make money. We pay our suppliers / contractors well. We don't screw them to the ground because we understand they need to make money but we do expect them to sign up to our finance terms. They can choose not to participate in the tender if they so wish. We are very clear about what is expected should they win a contract.

You may well think we are immoral but at the end of the day, we are a business not a charity. If you choose to tender then you accept our terms, regardless of whether that's the finance terms or deadlines. Whether people like it or not that's how it is.

And that's bully boy tactics, LittlePeaPod.

I've come across many companies like yours, and it stinks. Increasingly companies are now extending their terms so that they don't pay for90 days.

Yet they still expect their suppliers to do the work for them, incurring all the costs involved - and don't consider the impact on their cash flow.

I fully appreciate you are in business to make money - we all are. I'm not going to work every day out of the goodness of my heart. But it sickens me to hear people like you, and other procurement people, trying to justify how you operate.