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?

Can you offer a discount for prompt payment?

And obviously charge interest and admin costs.

Legally they have to pay within 30 days – there’s a section on the .gov website where it’s laid out.

Saying that, I have a few small business clients who never pay on time and I get so wound up spending time chasing. The fear is that if I push too hard they’ll find someone else. It shouldn’t be that way but it is, but you’re right – I’m certain the people i’m Chasing pay themselves on time. It’s sometimes hard to know how hard to push, but I don’t see why I should bankroll companies thousands of pounds. It’s incredibly frustrating!

@ChrissieKeller61 he always asks for deposits via bank transfer although some customers want to pay cash. He usually refuses as it is much easier to have the money go into the bank.

He often gets customers say at the end of his work "Oh I'll pay you tonight" and then most times they don't. Ok if they still pay fairly quickly but far too often it's weeks later.

Big companies expecting a 90 day interest free loan is outrageous. If they need a loan they should ask their bank.

Self-employed here. I dream of people paying me inside two weeks - I don’t remember anyone ever paying me quicker. I checked yesterday and I currently have £80k of work invoices that was 6 or more MONTHS ago. But the people I work for are repeat clients, so there’s a balance of how much you can push things and still keep the work. 🤷🏻‍♀️

We pay 30 days month end apart fro large construction contracts when it's monthly valuations that have to be certified or a Pay Less Notice issued within 30 days then a further 30 days to pay.

Most of our clients pay us 60 days month end. I'm currently chasing some invoices from a major government supplier from last July.

@BlueVeins but is the work worth it if you are not getting paid? The time you waste on them chasing payment and doing work not paid for could be utilised elsewhere

Yep, sadly Travis1 it is worth it - we always get paid eventually, we’ll mostly anyone. And there’s a limited supply of work, so you kind of have to accept it. Don’t get me wrong, there are times when you have to cut your losses and ditch a client, but it’s and industry wide problem. I’m not saying it’s ok! But it does make me laugh when people moan about not getting paid immediately!

This is a cost of working with big business - the knack is to make yourself useful to them and then when they don't pay withdraw service or start the discussions about at what point it is reasonable to do so given they are not paying you.

I have run an sme for over 10 yrs and only have issues with one client who are huge but have cash flow issues - I work to their cash flow making sure I get invoices in when they are processing and about 10 days before their pay runs. These days the only part we have issues with is the spanish arm who think 60 days is fine - but they get harrassed and are starting to come to heel.

Legally they have to pay within 30 days – there’s a section on the .gov website where it’s laid out.

My clients used to get around this by commissioning me via their US subsidiary or US head office.

They additionally made it difficult for genuine freelancers by making their staff redundant and then using them as freelancers - who would invariably get the first slice of the pie.

@MintyMabel I do use the construction industries act when necessary but a determined non payer can string it out for as long as possible, costing us as much as possible in the hope we run out of money or go bust. Have been there 3 times. All 20k plus. All referred to solicitors once I was out of my depth and had exhausted all my options.

It is better and probably half the time, just stating they are in breach is enough but those that don't want to pay, or can't pay, won't pay.

We've downsized now. My DH and 4 lads. Only let a company owe us 1 month in total. Retainers I chase every month. Detailed, concise invoices. I refer to payment terms when necessary. Give notice if things start looking iffy (can spot it a mile off now when they are struggling and not just being arseholes).

And after 10 years of telling DH not to kick off and to do it the legal way and probably being 100k down in total, once a month I stick a box of 5000 fixings on the invoices.

Then when work isn't paid for, DH goes back and reclaims our fixings. It doesn't matter if they are holding the clients walls up, they are our fixings and not paid for so they are coming out.

Nothing gets an invoice paid quicker than dh and 4 lads turning up and taking work down.

@Alyic the VAT changes will cause carnage. It's difficult enough to get those last couple of payments in come December anyway. So many companies rely on VAT for cashflow. Personally I can see the corona impact getting HMRC to delay it starting for another year. But not matter how many times they delay it, plenty are going to go under without that extra cash flow. We have been very selective who we work for because of this and are intending to stay selective. And keep the owed amounts as small as possible.

I'm dreading this new VAT thing. Our small subbies are going to get so confused. I'm confused!

@Frouby I completely understand why HMRC are doing it,three different vat options for construction 0%, 5% & 20%

I did some work for an eco builder and said to him, Mr So and So has emailed me requesting a vat refund on his new build, I've dug out the invoice and you've not stated it's new build but you've not charged him vat, builder goes bright red and says I give you different invoices than I give the customers.

At that I got my coat and never went back.

Yanbu and one freelance job I took I only took it if they paid promptly the next week.

I don’t want to chase it gives me rage. Plus if I’m paying for childcare as the muddle person I have to pay that as I use it.

Now if I have a tradesperson to the house I always pay same day.

I run a Finance Department and we don’t make anyone wait. We have weekly payment runs, can make payments relatively quickly if urgent and if I know someone is a sole trader/small business I pay within 2 weeks.

I’ve worked for places with longer terms and it’s entirely unnecessary for most.

@Alyic I completely agree. We knew a guy who had 4 businesses in 6 years. All opened in his name, his wifes name, his sons name, his daughters name. Paid vat first 2 quarters on each business, registered for annual VAT then bankrupt the company each time. Also registered for CIS gross.

Increase your fees then add an early payment discount.

I don’t do much freelance work but my only remaining client unilaterally decided to start awarding themselves an early repayment discount if paid within three weeks.

I resent the drop in price but they never seem to lose invoices now so I may well have ended up better off for it.

Other clients I have dealt with seem either to pay bad rates very quickly or good rates late. A select few pay well on the day and I bend over backwards to look after them.

I am a barrister. It is endemic in the legal profession. Clients (including solicitors) completely ignore terms (which are 30 days from invoice). I am currently pulling my hair out because NO ONE has paid me for over a month. I have roughly £120k outstanding. More than £80K is overdue.

I had to take £500 out using a credit card and pay it into my bank to pay bills today. Normally my tax savings would provide a bit of a "slush fund" but I paid tax at end of January and I used the excess to pay my Chambers expenses (paid on fees earned, not collected, and subject to suspension of membership if unpaid). It's heartbreaking. I love my job but have spent today discussing my exit strategy because I can't take the pressure late-payers.

For bad payers, we ask 50% before work starts.
We always pay micro businesses within 7 days and the rest are usually on 30 days.
I had to wait four months with a cost against it for half of the value from a supplier. Ended up organising it so all third party costs were paid direct to the supplier, getting a mark up when paid, from supplier and then charging 50% up front for all future projects.
It pisses me off no end when people are outraged because I ask them to pay a bill for something they have received and signed off.
Imagine if i did that in Tescos!

I used to process invoices for sessional tutors for my department. From the moment I received them to the point at which they had been checked, the forms completed and submitted to Finance was never more than three hours and usually within ten minutes. They were only allowed to submit invoices three times a year.

After there were a few awkward moments where tutors were 'off' with me, I found out that not only were finance not paying them within six weeks, they were telling them it's not their problem if they didn't get them from me.

I rejigged my procedures, so I kept a copy of the online forms with the date of submission on them, so they could then go to the finance manager and show them the approval.

I then got informed that it didn't matter when I submitted them, they had a policy where external payments to mere tutors were the lowest priority work of all - they paid big suppliers (who had credit control teams) within 48 hours, but their actual unofficial policy for the tutors was 'do it on the last day of term and if the one person who processed tutor invoices was off, it waits until they're back in'. In one case, that person was off sick for four months and then took another two to 'get to the bottom of the pile'. When I brought up the issues officially, I was told that 'these people should budget properly so they can manage within normal payment terms'.

It was the most embarrassing thing ever to have to face the tutors when they had been waiting for payments for that long and try to support them in getting paid when I knew the contempt with which their livelihoods were held.

Repeat that in all the other places they taught and you had people being expected to work for free for months on end because they were 'only peris' (peripatetic).

Not paying an invoice in time is the lowest thing a company can do to a supplier, IMO.

There is legislation against late payment - it doesn't get enforced very often, but it's very much in favour of the invoicer.

The only problem then being that you get that one invoice paid reasonably quickly and then get delisted and never work for them again. It's nothing short of bullying.

I worked in central accounts for an enormous international company - the biggest in their sector - and they had a scheme whereby every outlet they oversaw (thousands) not only had to do the job running a busy outlet, but also had an on-site console-type thing they had to use to process their own invoices, before anybody centrally even knew of the existence of the invoice. Of course, this was difficult enough for them to find time to do along with their actual job, but they also had to get suppliers set up, which took a very long time, before they would even appear on their system for them to be able to process their invoice. The payment terms were considered to begin only once the outlet had been able to process their invoice, even if they'd been given it weeks previously. Sole-trader suppliers were given our number to call for payment, but then told to go back to 'their customer' (the outlet, which was of course also us) to chase them.

There were processing cut-off dates for the end of the month (sometimes as early as the 16th), meaning that the invoice was effectively counted as a next-month invoice.

Some of them were tearing their hair out when they expected (had often been told by a desperate/lying/optimistic outlet manager) payment in the next week or so and were told that, once their invoice had been entered on-site, it would miss the cut-off and so would be paid 90 days after the end of the following month.

Any pleading from frightened, desperate people - many of whom only worked for us and should have been given the protection of employment status, but were forced to invoice on a self-employed basis, was batted back to the outlet or they were told they weren't on the approved supplier list, so basically should be grateful if they get paid at all, as the outlet 'shouldn't have used them'.

Naturally, the approved supplier list was heavily weighted in favour of the big boys and they were kept sweet, just as in turn they kept us sweet with preferential cut-backs. I got regular calls from a taxi driver on a very remote Hebridean island. Every time he tried to fight to be paid what were basically his wages, he was told that the company had an approved national taxi company and he was not it. Astonishingly, this 'nationwide' taxi company did not have any presence on this tiny little remote island (which was home to a small but quite important government outpost). There was one taxi driver on the island and it was him.

We were given some leeway to bring payment dates forward (supposedly only to correct late processing at the outlets) or if people really kicked off, but I just did it anyway. I gathered a spreadsheet of small one-man-band operations and those who should really have been on the company payroll and ran them through various check screens to get them included in the next possible payment. I figured that, when monthly invoice payments would be in the tens of millions, £20-30K of effectively wages wouldn't even be noticed. Nobody ever told me off about it.

It was soul-destroying when (justifiably) angry and desperate people who thought I had far more power than I did would call and ask if I thought it was acceptable that they had to wait so long and my honest feelings were that no, it most definitely was not fair.

The absolute nadir of it all was that I was in Accounts Payable receiving calls from sole-traders, having to tell them that their strict 14-day terms were being ignored and we would pay them in 90 days (and then only if nobody delayed at any stage) and tough crap if they didn't like it. Further up the office was Credit Control and I didn't realise for quite a long time until I spoke to one of the department who mentioned it, that they were calling the same 'status' of people - sometimes the exact same people who'd just spoken to me chasing their invoice - because we'd supplied them with a meal or some other sundry item that we'd invoiced - and tell them (not an idle threat) that they had to pay in 7 days or else they'd incur late payment charges and feel the full force of our legal department. Any (very reasonable) protests of "But can't you take the £10 I've owed you for a week off the £900 you've owed me for five months?" were met with "It doesn't work like that".

It's arrogance and bullying of the most disgusting kind. I left soon after that.

*preferential cut-backs

Preferential KICK-backs.

Frouby Glad to see you use the fixings trick as well.

@MitziK that’s really interesting as I am a peri... one of my schools is the worst for payment and I wonder if that’s why!