To sack this client who is ALWAYS late paying?

[SapphireBattersea]

And to ask for any ideas of how to word the email please ?

I run a cleaning company and most of my clients are fantastic and pay on time

However one client takes the absolute piss. We do a couple of hours office cleaning a week for them so about £50 a week. Not a huge amount but it does affect my cash flow as my staff are paid weekly, and this company are always REALLY late paying usually 3 or 4 weeks. And this is after several emails from me chasing it which wastes my time

But enough is enough now and I've decided to get rid. I am new to being in business I have only been trading since late last year and have never had to sack a client! Any ideas how to word an email saying I no longer wish to work with them?

Do you invoice monthly anyway? what credit terms do you give them at the moment?

I too run a small business and have to deal with similar, I've found that its often a tactic they will be applying to all their suppliers, think that its yours and others money they're keeping in their bank and earning interest on or financing their business with, I would be going with something along the lines of;

"Please know that we value your business, however, the current payment terms you are employing are causing my very young start-up company severe cash flow issues, to the point were I may unfortunately not be in a position to continue providing the service we trust you are happy with, would you kindly be prepared to guarantee in writing that you will pay our invoices on X days from receipt or undertake the work on a pro-forma basis, I look forward to your reply in order to resolve the situation which I can no longer allow to continue"

We had a fish and chip van, so a really small business but stock was expensive (to say the least) We were thrilled to get a contract to feed a large local attraction a couple of times a week for around 6 months of the year. Plus odd extra events they ran. They nearly bankrupt us several times. The worse payers I have ever come across. They were already on a reduced price but still we would have to wait weeks, or even months, to be paid. Eventually we had to ring and beg which, considering the amount they charged their customers for our services, was ridiculous.

It was a good day when we told them to take a hike when they emailed the first batch of dates for the following year!

When you run a small business you can't afford this behaviour, either financially or emotionally. The worry was appalling as we struggled to by stock each week.

Sack them and find customers who pay!!

I've never heard of a business sacking a client. Perhaps I need to get out more, though

@Awwlookatmybabyspider you certainly do need to experience more of business life. I've worked with several companies small and large who have stopped providing services to clients who are just too much of a pain and time wasting. All the companies did just fine with their paying on time customers!

@Repetitivestraininjury

LOVE that !

Hi OP, I've had a commercial cleaning company for 15 years now, and it is such a pain when Clients won't/don't pay on time.

I invoice monthly in advance. So on the 1st of June, I invoiced for the whole month of June.

I also have terms and conditions that I ask them to sign before we start work, in which it states that any late payment of invoices may be subject to additional fees & interest, as per statute & that we expect them to pay their invoices on time.

If you DM me, I'm more than happy to send you a copy of this. as long as you're not based anywhere near my company!

Thanks everyone for replying it's much appreciated x

I would tell them you are updating your terms and conditions and that you will be invoicing in advance from now on. Payment terms are 14/28 days. So line it up that way, invoicing monthly 28 days in advance. 3% added for late payment.

I run a (very) small business and I am worn out by people (usually salaried) who don't grasp how important it is to pay on time.

xpost with house of gold!

@cantfindname
Disgusting ! So glad you got rid

I have just dumped a client for similar. Apparently they have not had 30 secs since last Thursday to transfer me the £28 they owe after me battling through flood water to get to them as their daughter had an exam.
It is so rude.

Also see if they prefer to be billed in advance.

With the greatest respect as rude as they may be. They're doing you the favor by giving you their business not the other way round

Well, no. There's an awful lot of demand for good, reliable cleaning services. I'm sure OP can replace these clients very easily indeed, so they're doing her no favours at all.

Maybe start by letting them opt for advance payment or termination of contract.

Can't you make them pay up front from now on? Just explain late payments can no longer be accepted so it's up front or nothing, rather than lose them or threaten with fines?

They would only pay for work done 2 months after it was completed, even for cleaners and contractors?

@HeadsDownThumbsUpEveryone Yes, anyone. I think anyone who needed to be paid earlier you had to provide a business case and it had to be signed off at a very high level so exceptions were rare.

It is fine for a supplier to stop working for a customer that doesn’t pay on time or at all. It makes better business sense than continuing to work for free which will only result in the supplier going bust eventually. Regular outbound cash flow coupled with zero or very heavily delayed inbound cashflow = bad business.

I haven't read the whole thread but you can't charge a penalty for late payment, only interest and debt recovery costs. See here: www.gov.uk/late-commercial-payments-interest-debt-recovery

(Commercial contracts lawyer here!)

Most businesses will be structured, at best, to pay June invoices at the en of July.

So, by wanting anything different, you are going against the prevailing norms - and therefore a hassle.

I am a finance director, and the earliest we pay our June invoices would be the first week of August - even for the people we try to 'look after'.

Having said that, most people like their offices being cleaned too.

Are your invoices varying amounts?

Would they consider setting up a standing order instead?

There is no major conspiracy here, and talk of court is excessive, unless you get to over 60 days.

Good luck, OP, but business to business work tends to be this way.

It’s a timing thing
Find out the best time to send a monthly invoice to get it paid quickly
In my work all invoices go to head office for payment at the end of the month, so if you sent an invoice at the beginning of the month you would have to wait until the beginning of the next month for payment
But if you sent it at the end of the month you would get payment within a few days

It is a business to business transaction so I would expect 30-90 days to pay.

It is your cash flow that is the issue , not them.

i would be worried they are having money problems....going bankrupt owing people loads of money....get rid i say....but im all doom and gloom me lol

Most businesses will be structured, at best, to pay June invoices at the en of July

This is just not true. I’ve worked at all levels of finance in large and small companies and you can pay your invoices whenever you like.

We use lots of small businesses/sole traders for maintenance as they’re reliable and excellent.

We pay within 14 days of invoice date - it’s loss easy.

If the CEO pops along and say ‘Merry, I’ve got an urgent invoice to pay’ do you think I say ‘sorry, they’ll have to wait a month’ or ‘sure, leave it with me and I’ll get AP to sort it today’?

I had this conversation with my assistant the other day - people like to pretend the finance department is some kind of dark art rather than a very straightforward support function. Sure, some of our stuff if high-level but most is extremely simple.

How big is the company that you clean for ?

It may be worth going in and talking to them .. either the procurement team or accounts payable ?

I am a procurement manager and I always talk to my suppliers about their cash flow etc .. while I always aim to ensure payment goes out on time ..sometimes things go wrong admin wise which can cause delays
some larger companies tell me don’t worry they can wait a month or 2 for snagged invoices to clear ..
Small companies cannot do that ..

It astounds me that some companies/ procurement people don’t think like I do ... where on earth do they think their suppliers get their money gap from ?!?!

It may simply not have entered their heads how much of an issue this is for you ..,

If this approach fails I would give notice ...

Good luck