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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To think they are delaying Payment on purpose

57 replies

Joyfulldeathsquad · 20/03/2015 13:34

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

OP posts:

whodrankmycoffee · 20/03/2015 15:03

The fact that you think you are one of the smaller supplies means that cfo should have more leeway to release payment so definitely keep chasing

MaxPepsi · 20/03/2015 15:08

They are struggling and don't want you to know.
Hardly anyone pays by cheque anymore and I would expect that to bounce.

I have spent the majority of my working life in an 'accounts' setting and everything you have described has set my alarm bells off.

The only saving grace you have is that they have partially paid your invoice - something that will go in your favour if you do decide to take it further. They can not turn round now and say they dispute it.

Ask them to make a further partial payment today/monday of £6k and the balance next Friday/30th

seriouslypeedoff · 20/03/2015 15:19

Me and DH have been discussing this with one of our suppliers this morning. the supplier turned down £40k of business from a company that never pay their 1-2k bills on time.

When people order from us, they don't get anything before they pay. Its common practice. The supermarkets are worse. I know several people who have almost being put out of business because of this, supermarkets rarely pay on time.

Original poster

Joyfulldeathsquad · 20/03/2015 15:24

Thanks for your posts. It's certainly made me think differently about it. Well it's 15:22 and still no promised payment. It don't be in there today I know it.

I've succumbed to baking a lemon drizzle cake as I'm so pissed off /stressed out.

OP posts:

Holepunch · 20/03/2015 15:24

It's a terrible state of affairs and "something" should be done, but when I was a corporate banker, my heart sank when small(ish) companies excitedly told me about the contracts they'd won from big companies, yes, including my own bank.

A business needs to have a very strong cashflow before it can contemplate taking on major companies as customers

LaurieFairyCake · 20/03/2015 15:50

The thing is that it's part of business modelling, how late they can get away with paying their suppliers - my friend is a small dairy/specialist cheese supplier and when she went to a supermarket they were really keen but had a 180 days payment policy.

Why are big business so successful?

Because their business model relies on keeping the money as long as possible.

SurelyYoureJokingMrFeynman · 20/03/2015 16:08

Yes, I did rather snort when I saw a Buy To Let martyr whinging, "this is the only business in the world where people think it's OK to pay late."

Not been in business before then, hun?

SolomanDaisy · 20/03/2015 16:14

I work on the assumption that it will be about a month on average before a big company pays. My clients are international and the only exception is Norwegians, who always seem to pay within a week. I probably wouldn't even have chased payment yet!

Charlesroi · 20/03/2015 16:41

Sorry, but this is a standard tactic in big companies and I've witnessed it first hand. Basically, they gamble on the fact that you are a small company and can't afford to lose the business. So they'll delay paying as long as they feel like it. Fairness or consideration for your situation won't be a factor in their decision (and it is a decision) not to pay.
You could start the debt recovery process (Google dunning). You could put strict payment terms (7 days with penalties for late payment) on the next invoice. Ultimately, I'd be looking for other back-up business because these sods are always going to be giving you the run around.
Don't forget that you are extending them a line of credit and you can't afford it.
Best of luck with the business.

PS please credit check future customers

Original poster

Joyfulldeathsquad · 20/03/2015 17:08

Hi all apparently it will be in by 5:30. Dp spoke to the MD.

The invoice ended up in the wrong department blah blah. That excuse doesn't tally up with the conversations we have had this week. Dp thinks it's down to a mix up.

I know they chose to delay the payment.

Roll on 5:30. Tbh I don't think it will be there.

OP posts:

Pippidoeswhatshewants · 20/03/2015 17:15

It's 5.10 - any sign of the money yet?

Celeriacacaca · 20/03/2015 17:18

You already know that are being given the run around. DH has seen this painfully and regularly in his business, even with clients with whom he has a good personal relationship. He now gets a solicitor to send a letter via a website (c£2) - I'll post link later - and if this is ignored it is escalated. It's very affordable and easy, and he's had 100% success recovering debts with it. I don't know how many times he's been told the money's coming, it should be in today, it's been delayed, the accounts person is now off ill, the dog ate their computers etc etc. All total BS.

Also, he can do checks via his Companies House subscription so if you want to know the financial health of a potential client then it's possible to check this before supplying them.

Another thing to consider if you're vulnerable to cash flow, is having your invoices factored, where a company pays a % of the amount outstanding and for a fee, then pays over the rest when the debt has been fully paid, and it's their job to secure payment. They also credit reference all clients and those with poor score pay up front or you can choose not to trade with them. Again, this has worked very successfully in the early days of business in that you knew when the money would be paid over.

bumbleymummy · 20/03/2015 17:19

Keeping my fingers crossed for you!

Holepunch · 20/03/2015 17:23

Factoring is an option, although it can be expensive, it also avoids you having to do any debt collection work, but no factoring company would take on the OP's business, as there's not enough spread of debtors.

Original poster

Joyfulldeathsquad · 20/03/2015 17:27

This honestly is the longest half hour ever! I kinda know what the outcome will be. What's different about today than the rest of the week?

OP posts:

Original poster

Joyfulldeathsquad · 20/03/2015 17:27

thanks bumble

OP posts:

Charlesroi · 20/03/2015 17:38

Fingers crossed.

Original poster

Joyfulldeathsquad · 20/03/2015 17:53

It's in.

That was close, I think we would have been toast. Massive learning curve for us.

Thanks all

OP posts:

Puzzledandpissedoff · 20/03/2015 17:54

I'm afraid I agree it won't be an oversight; a big company will have people to deal with this if they choose to, but unfortunately this is how too many operate, as I know to my cost

The good news is that you said you won't be relying on them quite so much "in three weeks" - having more clients really is the only answer to this

Puzzledandpissedoff · 20/03/2015 17:55

Cross posted with you!! So glad it's come through (they did have someone to deal with it, you see )

Still meant what I said about it being good to avoid relying on one client, though ...

bumbleymummy · 20/03/2015 17:57

Yay! Have a lovely weekend

Original poster

Joyfulldeathsquad · 20/03/2015 17:57

I know puzzled that's going to get looked at.

OP posts:

specialsubject · 20/03/2015 18:00

typical year-end shenangians, and it is DISGUSTING - it can bankrupt small businesses and believe me I know.

start making a massive fuss. This probably means camping in the reception area.

DoJo · 20/03/2015 18:17

Are they signed up to the Prompt Payment Code? It is voluntary and the powers to penalise are limited, but at least it shows some kind of commitment to paying on their part if they are. www.promptpaymentcode.org.uk/

Original poster

Joyfulldeathsquad · 20/03/2015 18:18

Thanks bumble

specail they paid up, I think it was Dp walking in to their offices this morning. But yes I agree inthink they were pulling a fast one

OP posts:

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