To have a little moan ...

[Theworldisfullofgs]

I run a business. I'm very good at what I do (small boast). Clients are always very happy with what we provide yet many of them (80%) never pay their invoices on time. Most are large organisations.

It's so annoying.

This is so common.

Firstly create an email account for "accounts@" and send anything to do with invoices from this account. This makes it looks like you are a bigger company and can separate you when you chase. From this account create an email routine. The day it's due send the first chase, two days later send the second, and so on and so on.

Secondly, make sure that your terms and conditions state your payment terms but that they also state the penalties for late payment. Make sure it is on your invoice and the email that you send to the company.

By law, you are allowed to charge interest on invoices after so many days late. Don't be afraid to charge it and include that in your chase emails.

If you do a lot of work for large companies, the person you work for will not be the person who pays you. Get to know that person and contact them directly when the invoice is late and be known as the person who doesn't accept late payment. Don't be afraid to lose clients as a result of this. Every hour you spend chasing money is an hour you are not growing your business. Chasing payments are costs to a business.

Also, look at your payment terms and see if they can be changed. There is nothing stopping you from changing from 30 days to 14 days. I went, after a lot of pain, from 30 days once the work is done to 14 days, to 14 days once the work was confirmed to now my payment terms are 7 days and payment upfront.

It is a nightmare as a business owner and it is completely unacceptable that big companies continue to pay so late, but don't accept it.

Hope that helps a little bit. Good luck.

I find this too. It’s frustrating but I’ve learned to expect it. One of my corporate clients now has a HQ in Poland (?!) where their accounts are done somehow and it takes 3-6 months to get paid. I always get paid but it’s such a wait

Over the last decade I’ve bumped my prices for such work and just factor the ridiculous wait in. Most pay within 30 days, and one lovely client (who I’m sure deals with delayed payments himself and knows how annoying it is) pays by card same day so I get paid immmediately 😘

I will do the accounts@ , that's a great idea.
And I think I'm going to vary prices for late payers.

The frustrating bit is the current one who promises to pay then never does...

They do it on purpose. Honestly it’s a strategy. At DHs work (big company) they choose small businesses and plan how late they’re going to pay them to keep the money in their own bank account longer. It’s despicable.

And I'm going to review my T&Cs. I'm too laid back, I've realised.

Bigoldmachine

I do a fair amount of work with the NHS. They manage their cash flow this way, I'm aware. Whilst really really annoying, I know they pay eventually.

I work for a large organisation and the lead times on stuff being processed by accounts is absolutely pitiful

It is a long, drawn out and painful process involving ridiculous codes, systems, approvals, stuff being declined, being put back through and then finally, ominously, Jenny from accounts comes over with your original invoice and a big red stamp on for you to redo what you’ve already done on the system

I would say I submit invoices for processing on the same day they’re received about 90% of the time and they are rarely paid on time. If an invoice has to be paid within 30 days the system is so slow that they have to get approval from the regional CFO to do a same day chaps payment

Stuff you put on your corporate card just gets coded to one enormous melting pot of stuff that isn’t individually broken down though

Isn't there a deadline on when they pay invoices included in their contract? I would find that frustrating if it was happening constantly :S no idea what I would do though, I know nothing about running businesses :(

@Theworldisfullofgs

And I'm going to review my T&Cs. I'm too laid back, I've realised.

Interesting read! Thanks for raising the question op - I needed to read this too!

BetterCare gives great advice.

Can you do deposit + stage payment + final payment if the work takes a few weeks?

Don’t hesitate to clearly state terms, then chase for payment - for a big company, ask who in Accounts Payable you should be speaking to, then ask them what the delay is, and importantly ask them when they do their payment runs, so that you can submit your invoice 14 days before that date to ensure they’re paid on time, phone them a few days before the scheduled payment run date to make sure your jnvoice(s) will be on it. If you’re not paid on that date, then phone and ask for a same day transfer.

When you initially register to become a supplier with some of these big companies most people don’t actually read the form they are completing and that you’re signing up to agree to their payment terms. Also, your invoice might be due to be paid on the Tuesday but their payment run is on Monday, you miss that weeks payment run and it doesn’t go to the following Monday then the way payment runs can work its another 3 days until the payment is in your bank.

WellLarDeDar
Yep, I do.

The one I'm worrying about, I have a gut feeling that they're not going to pay. I should have researched them better before. Lesson learnt.

For balance, I have on client that pays within 2 weeks. They believe if you've done the job you deserve to be paid for it as soon as possible. They're new and a complete loveliness in this world. Cultivating this relationship.

Being on the other side, ie big company accounts team, it is equally frustrating on our side trying to find out why someone hasn't ok'ed the items/service as being delivered/carried out. We can't pay an invoice until it's been cleared against the original purchase order and we have people who raise the orders then just don't seem to understand that it is literally their job to go in and put a receipt number on so that we can pay the invoices.

Also 14 day payment terms are the bane of our lives. 5 working day turnaround from invoice hitting our inbox to it being on the ledger, so if it arrives from Tuesday onwards it's the following week already, sent over that day or the next to the person who hasn't receipted it...wait a couple few days for them to go in and actually check and do their job...

With large organisations and particularly NHS, get a contact name and then a few days after they receive the invoice, follow up with an email or call to make sure it’s arrived and that it contains sufficient information for payment.
In big organisations invoices can end up getting lost.

Almostlegible do all that, they just don't reply.
And NHSBS...

@Almostlegible not necessarily going to work. In many big companies, the requisitioner will never see the invoice as it must go straight to their AP section. Sending elsewhere could be seen as a breach of the supplier terms therefore further increasing payment times.

Definitely check out The Late Payment of Commercial Debts Regulations 2013 on the gov.uk website. You can charge statutory interest & late payment compensation on overdue invoices, this may encourage prompt payment.
Credit control procedures are important. You could always outsource your credit control for all invoices or just the awkward companies. There are companies who can do this for you cheaply / no win no fee & without being tied into a contract.

For NHS make sure you have a purchase order number as without that your invoice will likely go round in circles. Then you need to chase the person who has signed off your work, then again with the accounts team. I agree it's a nightmare. I work with annual NHS contracts and a few years ago it wasn't unusual for them to be unpaid for a year (by which time the next payment is due 🙄). PO numbers and frequent follow up has helped.

I work for a large company - we will only pay when an invoice is due. So if payments terms are invoice date plus two weeks - the system will send payment on that date.

Make sure your invoices are clear as to when payment is expected.

Now many years ago we had some issues with our payments system .... a one of our suppliers started sending final demands to the home address of company directors - that got attention.

Lastly - are there any supply issues? Your post implies not but this is a common reason to withhold payment

I have no problem with invoices being paid when they are due and nit before. I just want them paid...

Re NHS order/po no - the issue is getting them out of them in the first place.
It goes like this...do you need a PO number? NO, just submit. OK, are you sure? Yes, it'll be fine...

Accounts payable...have you got an order number?....

All v senior people.

New day tomorrow. Definitely changing some things and thank you for advice etc.

Senior managers are sometimes the worst for not following procedures as they have admin staff and assistants to do the menial tasks of raising orders. But then they don't pass the info needed to those people and it causes all the issues you are describing.

This is partly why I'm trying to leave company finance and go into small business bookkeeping.