To think they are delaying Payment on purpose

[Joyfulldeathsquad]

We started a new business up in October and it's bedn ticking away ok, paying for its self with enough for a little wage.

We have a few clients but one main one where we get the bulk of our custom from. At the beginning they paid upfront for a considerable order and we completed in time they have done this twice. All good. The last order they wanted we already had the stick in so when dp delivered they only paid £8000 instead of the £20000 they owed, with the promise to pay the outstanding the following week. These guys are a massive company and we will probally be their smallest supplier.

Any way the date of payment come and went. so dp rang and the said they would pay on the Wednesday (5 days late) No payment. Then they said it would be in by Friday as it was a BAC transfer and would take a few days.

Friday - no payment . Dp chased it up and was told the they couldn't pay the invoice as the boss had gone away skiing and hadn't agreed it. Def payment on Monday.

Monday - no payment. Guy that does the payment off sick. Will be in next day.

Tuesday - guy still off sick ( this is a huge company so I can't believe that no one else can pay it)

Wednesday - guy goes home early for parents evening . Dp now calls bids directly and is offered a cheque . Dp declines as money wouldn't clear till after weekend and it's needed now.

Thursday - dp manages to get hold off accounts guy and is ASSURED money will e in at 5:30 'it's been sent off'

5:30 still no money. Dp calls guy and guy is in car with boss on the way to Scotland. He has passed it in to someone ekse that hadn't processed it.

This morning Dp actually went to the office and was once again assured it would be paid . Still no word as yet.

I'm shitting myself as this could really fuck us up. Dp ever the optimist is saying they will pay as they have been good payers in the past plus they are not short of money eg. Just sold have their company for 7mil.

They are mugging us off aren't they

If you can read past the typos well done

I'd wonder whether it could be a financial year end trick? Or a cynical way, by being a reliable payer then screwing you, but if you have a contract unless the company is going under they will have to pay. Do you have a contact that includes penalties and interest when not paid on time? A learning for the future if not.

Probally not regarding the contract. It's really hard as we are friends with one of the top bosses, actually had a meal out a couple of weeks ago. He says it's not his department was was making all the right noises about being concerned but still no payment.

YANBU. My parents run a small business and it's always the huge companies that are the worst at paying

Sorry, I haven't any advice other than keep phoning them and bothering them (which it sounds like you're doing anyway).

Good luck

Thanks granulated this is our first experience of this and stupidly left our selfs a little exposed. I don't know what we can do other than act like a maniac and start throat punching people also it seems as if we are begging.

Phone them now and tell them if the money isn't in by end of play today you will be taking court action on Monday.
Send them a letter before claim [http://www.adviceguide.org.uk/wales/consumer_w/consumer_taking_action_e/consumer_legal_actions_e/consumer_going_to_court_e/consumer_taking_court_action_e/step_one_write_a_letter_before_action.htm], special delivery. This has motivated many a client to pay.
If they still don't pay, follow through with the claim.

I think it's standard practice.
I work for an enormous international company, and I'm employed pretty much solely to chase overdue customer payments. Some of these customers are household names.
I think things are bring done about it law wise to protect small companies, but not sure what. Someone who knows more will probably be along!
Hope they pay up soon!

This is what I'd do in your shoes (manager of small company for 20 years). Firstly, send an email to the boss, accounts bloke and anyone else who is involved reminding them of their payment obligations, giving a deadline for payment to be in your bank and warning that if this fails to happen you will be taking legal action with immediate effect. You need to send this asap, and give a reasonable deadline to receive the money - I'd suggest close of business on Tuesday. Start looking at taking court action. You can do it online and it's really simple to do.

Don't be bullied! I've recently put one of biggest customers on proforma.

Think I've posted this before, but I once submitted an invoice with 3 years worth of late payment fees to the county council. It really did the trick

Agree that it's the big companies with their tighter-than-a-ducks-orifice accounts departments that are the worst payers.

I think you should have taken the cheque.

Go and ask for it again.

You know that you can wind up a company for refusal / failure to pay its debts.
Threatening that and copying it to the company secretary would normally get their finger out, sharpish:
www.gov.uk/government/uploads/system/uploads/attachment_data/file/387776/How-to-wind-up-a-company-that-owes-you-money-december2014.pdf

I agree you should return and get the cheque. I think they intend to delay until 1st April.

Do you have the option to pay extra at the bank to make it clear quicker?

I know this is easy to say but I would never deal with them again without payment in advance. Your company is small and relies on cash flow being quick, I assume to pay your suppliers.

Canyou survive in business without them?

I'm really hesitant about threatening email ect as they are what's really keeping us a float at the moment we didn't really go all out to secure anyone else as theirorder was big and what we could manage at the time. Plus DP is friendly with one of the owners and they always seem apologetic when we ring - which makes it worse as they know it urgent!

Yep should have took the cheque.

hi laurie - I don't know . Dp keeps telling me the business can squeeze through but we are skint. They are actually about three and half weeks late so it's eaten in to a lot of what we had in our personal bank account. If we touch what's in the buisness account we could lose the lot. Our new client doesn't come in till three weeks.

Ok stop being apologetic. They are playing on your good nature and embarrassment. Be polite, factual and assertive.

Our payment terms are x. You are overdue by x. We require payment by bank transfer by x or we will be required to take legal action.

Hope you get sorted soon

Would it help if "your accountant is pushing you to take legal action"?

The threatening email can be polite and cheery, and completely unyielding.

"Blah blah informing you your account now X overdue. If full payment is not in our account by DATE, we will be initiating court action to recover the monies on DATE. Looking forward to receiving your payment. All best wishes, Joyfull."

The excuses sound feasible to me. It's the kind of catalogue of errors/delays that happens in a large organisation when it doesn't affect anyone personally.

If I've read it right they're now about 10 days late, which, I'm afraid is nothing and if a business is going to be successful, cashflow needs to be strong enough to cope with that. It shouldn't be necessary, but it is.

If there's a lesson here, it's that it is absolutely vital not to be reliant on one customer, no matter how good a deal it seems to be , it's always better to have a number of different customers, even if that means margins are lower.

When assessing loan applications in corporate finance, banks generally don't lend to businesses that have more than 20% of their business with one customer, even really big companies, that's how risky it is.

Thank you I'm emailing dp now with regards to the email . I'm stuck at home with dd and it's all I've thought about since last Friday . Last night I was convinced it was personal but maybe not reading some of the replies here. Thought we would have had a better relationship as we knew them personally but obviously not.

Just sold have their company for 7mil.

If they have just sold their company for £7m - perhaps the new owners have stopped any invoices being paid for the interim.

As your partner is friends with them, can he find out what the hold up is?

hole they are actually about three weeks. They only made a partial payment and said the rest would follow a week last Wednesday .

But your right about being reliant on them. We wont be in three week but its a lesson learnt

He has tried alternitive but they have come up with excuses. We was offerd a cheque and should have really accepted it it was promised a bank transfer the next day

If company is being sold or in process of pretty much everything except payroll is frozen. The cfo is committed to delivering a certain amount of cash to the new buyers.

Once transaction is closed the payments can start flowing again.

But they are close enough to tell dp that.

If cfo based the closing cash deliverable on delaying the payment of all small suppliers then you are a bit stuck particularly is the closing is delayed.
Definitely chase but in my professional experience that is what happens why buying and selling companies.