That an invoice should be the same as a pay check...

[PlinkiePlonk]

I work for myself for a few clients so obviously send invoices. Sometimes they are pretty late to be paid and sometimes only after quite a lot of badgering (always extremely politely before anyone decides to take a side track about what my tone might be). But am I being unreasonable that it’s not fair people think they just pay invoices as and when, whilst you know that if it was their pay check that was late they would raise hell if it was late? And indeed the fact that you have to be polite and an element ‘accepting’ that things won’t just automatically be paid on time is also a bit absurd?

@Frouby you have my sympathy, I do work for Construction Industry companies, it's heavily weighted in HMRCs favour and don't get me on QS's who are shit to say the least. It will be worse and even more confusing come October when the reverse charge VAT comes in, cash flow will be non existent.

I ended my own self employment when a client went under owing me £1.5k but he paid his wife every week who had never stepped foot in the place. Also HMRC putting money laundering fees up to £300.

frouby a retainer in the construction industry is the norm. The legalities of accounting for the construction industry are totally different because of WIP etc. How you recognise profit and loss and how invoices are paid is legally different because of the nature of work.

My father is has a building contractor company. He pays within a week of receiving an invoice. Then his competitors wonder why he can get the subcontractors to turn up on time / emergency so he can get projects signed off on time. It's not rocket science eh, just a good name for paying properly

Poor cash flow is often passed down the chain. If they are not chasing their customers enough they cant pay their bills on time either. It depends on the industry really and whats the normal within your industry. If there are not many alternatives to your product/service then put them on proforma. Unfortunately if you have lots of competitors who do give credit that can be difficult. The only thing you can do is if you regularly do work for them, do not start the next piece until they have paid the past invoice.

One of the companies I dealt with would print of the cheques for payment but unless they were big suppliers would wait till the last moment to send them (often when there was a threat of court action). It was their way of hanging onto cash. Paying late was the norm if you wanted to do business with them you just had to put up with it.

Recently had some work on the house. DH paid them the following day. We realise these men are supporting families and need the money. One is coming back to do another job and we went and bought most of the materials so that he doesn’t have to put money upfront as self employed. We did the same with stone for the path. He made a brilliant job of it.
Some of the people who leave bills for six months have the most money.

Yanbu. Half the family are self employed. Some (always the massive corps) are awful at paying, some pay late and one didn't pay at all so the family member in question removed the work to the customers tantrum

DH is self employed and customers taking ages to pay is a nightmare.

We really struggled in December with buying Christmas presents plus our washing machine packed up and our car needed work. We had 3 customers who owed over £4,000 between them. One still owes us and I am issuing Court proceedings today.

DH puts on his invoice "payment within 14 days" but the amount of people who completely ignore that is ridiculous. They think they can pay when they want or even in instalments!

If I get an invoice I usually pay it straight away but certainly within a couple of days.

DH always asks for a deposit now (he has to buy materials for his work) but quite a few customers moan about that. We have had too many try not to pay and even a couple that have never paid

I remove any guarantees if the invoice isn’t paid in 30 days. That tends to sharpen their minds

O get probably over angry with chasing payment. Probably loses me recommendations.It's the lies that really get to me. "My other half deals with the finances and he's on a flight so well pay you tonight" I leave site and surprise surprise, not paid 😠

@lynsey91 if he gets a deposit .., make sure it’s via bank transfer and then if it ever gets to court you have more debt collection options open to you

Yeah it is shocking. If anyone sends me an invoice, I pay it then and there or when I get home if I need to check it thoroughly and am out. I don’t understand why you wouldn’t? I wouldn’t buy something in a shop unless I was ready to pay for it right away.

YANBU. I'm consistently paid 2 months after issuing the invoice, despite charging statutory interest after 30 days. One client has got as bad as 4 months late in the past so I'm quite hot on chasing them. Actually what I find even more annoying is that they only tell me when it's been paid. If it's paid, I can see the money there from my phone, this is not news, what I keep saying I want to know is "it will be paid on X date" so that I know if I need to chase up / manage my own finances accordingly.

YANBU

I think many small businesses fail due to customers making delayed payments or not paying at all.

We once had to take a client to court for £25.000, we had asked nicely for the money, we offered him staged payments, DH asked not so nicely and still he wouldnt pay, all the time the cost for the scaffold rental was being added to the bill ( scaffold doesnt come down until the bill is paid) by the date of the court hearing the bill stood at £41,000.. He paid just before we went into the court, turned to my DH and asked if he would do the scaffolding on another job for him !
Our business could have folded, not many could survive being owed that amount

Get some robust T&Cs in place, apply late charges when invoices aren’t paid within agreed timescales. Do this consistently. They will soon get the message.

Yup, it's a nightmare, even with pro formas it doesn't always work out. We took a 25% deposit from someone before Christmas for a £30k order. Balance due before delivery. When it came time to arrange delivery they tried to move the goal posts and say payment after delivery. Currently in a mexican stand off with them and we've refused to deliver until payment or we sell it to someone else. We're lucky in that we can take the hit but it's not ideal.

So far this year I have a customer who we have a CCJ against disappearing off the face of the earth and it remains unpaid, 2 x chargebacks from fraudulent transactions and a 3rd transaction that just didn't seem 'right' which I've cancelled. That's not including the account customers our accounts team are chasing. I swear the debtor list gets bigger everytime it comes round.

But ever increasing numbers of employees have to work several weeks in hand before getting paid for it, i.e. maybe 4/5 weeks wait to be paid for time in the first week of the monthly pay cycle. Weekly pay is getting rarer all the time, so it's not really out of the ordinary that building site workers aren't paid weekly anymore is it?

Welcome to the self-employed world. I have large clients that regularly ignore my terms and pay on theirs, the worst culprits being EOM+60. It is worth asking your contact with the client what you could do to make it easier for them to pay. For the EOM+60 clients the trick was to inflate the price and then offer a 10% prompt payment discount for 28 days.

I've also just had my third client (in fifteen years) go bust with an invoice outstanding for work already done. That'll be several months to resolve and if the liquidators report is accurate no more than 10p in the pound will be paid. That's cash I needed to invest back into the business.

I used to work for a huge company with no cash flow worries whatsoever and our finance director would not authorise supplier payments until we’d received 2 red bills AND a follow up phone call. I thought it was appealing. I work for smaller companies now and since I’m in charge of when suppliers get paid I ensure that invoices are paid on the payment run after they are received. If one has just missed a run and I know it’s a freelancer then I will make a separate payment in between runs. This takes extra time and can be a pain but our cash flow is good and I know that in small businesses it’s not always so I’m trying to do my bit to make it easier.

I'm freelance too and most of my clients are great but there are 3 or 4 who are an absolute pain. They always pay late - every single time. It's such a pain having to constantly chase them up.
I have moved people on in the past who never managed to pay on time - some people pay a regular amount monthly and some of them would be constantly nearly a month late. I made use of an ideal opportunity to stop providing services to the 3 worst offenders as it was ridiculous. They were taking up my time when others were waiting for a place.

I work in an industry where people go freelance. In 2014 I was seriously looking at joining them as they seemed to make more than us stuck with large organisations. My boss said doing the work would be fine but you will spend half your time chasing people to pay you. How right he was, everyone I know who worked freelance is now back on payroll. I also once worked for a large hotel chain who actually had a policy of delaying payment to small suppliers to get them so desperate that the settled debts with a large discount. Son in law travelled to do a contract last year and still waiting payment etc etc. Absolutely disgrace how some companies treat contractors and small companies.

Week at least in hand. Often 2 weeks. Then paid in arrears. Sometime weekly, sometimes fortnightly, sometimes monthly. 5%+ retainer held back for 12 months+ plus until client pays our client. If there are any issues, even if it's not our work, it gets delayed and often just disappears.

Pay when paid is illegal under the terms of the Housing Grants, Construction and Regeneration Act. If you can demonstrate you have cleared all your defects in the 12 months defects period, the contractor is obligated to return your retention. The 5% is halved at practical completion so in any event 2.5% should come to you at that point. If it wasn’t held, you’d have little reason to return and fix bad work, but I find more often than not that retention isn’t in sub-contracts any more.

Often not paid on time. Too many times not paid at all. Often paid short until the QS has verified the work we quite often put up 3 weeks ago because they are super busy and super important you see.

Valuation periods are set within Construction contracts and it should be clear in your sub-contract with the main contractor what that period is. They typically are monthly valuations and I can absolute guarantee the one thing a contractor’s QS is never too busy for is submitting their monthly valuation for assessment. They hardly ever give me anything else when I ask, but that information is submitted on time every time.

The government has done plenty to address issues of payment within the construction industry. The vast majority of major contractors play by the rules, and those who don’t will find themselves off future lists for government work. The same is true of many private clients. One of the standard pre-qualifying questions is for contractors to provide evidence of prompt payment. I would always encourage subbies to contact the client directly if their main contractor isn’t paying them. The client QS is a good option too. Whenever I’ve taken that call, I’ve stepped in and made sure I have evidence subbies are paid on time. A contractor not paying subbies is a real red flag to me as it indicates a cash flow problem and that’s risk to my client. I need to know it is happening.

It isn’t perfect but the system is a hell of a lot better than back in the day.

DH runs his own small business and has the same problems.

People turn up to collect work without their wallet, people decide that they no longer want the work they’ve ordered so think they shouldn’t have to pay/get a refund. Big companies taking weeks and weeks to pay invoices, etc.

I’ve taken over his accounts and got quite tough as he was a complete soft touch with it. I’ve reworded his invoices so they state strictly 30 days from date of invoice, that we will charge interest and admin fees for late payments, included stuff about all work remaining our property until paid for in full. All new customers pay up front when they order the work

If an invoice goes overdue I send a polite email reminding them of the clauses, if they still don’t pay I charge interest and stick to it - once people realise that late payments cost them more, they tend to pay. I’ve never been rude but I am firm.

The worst companies are the big ones who want to pay on 90 days. DH is a small business and can’t afford to carry that debt for that length of time so we just don’t work for them now. We did some work for our local council last year and they took 180 days to pay. It’s just not on.

I'm self-employed and also contract out work. I pay within 5 days, often on the day of delivery.

And it's true what a pp said. Because I pay quickly, I find my contractors/freelances will often offer to turn around work on a weekend or overnight because they know they will be paid almost immediately.

Then other people wonder how I can turn around so much work and why my contractors are do loyal.