To not pay over due invoices I just received immediately?

[topaynowornot]

I am an accountant and work in the accounts department for a mid size company.

I have just received several overdue invoices from a supplier. All sent with high importance asking for them to be paid now. They are over due but I have never received them before so haven't been scheduling them.

I asked and they said 'their system sends them' she said she can't find the emails that were sent to me, well that's not my fault. Our systems sends things too but a copy goes to my email address, so this makes me think she hasn't sent them to the right place or at all. I have asked that they honour their usual credit term. She has said she's not sure they can do that.

It's for a very large amount. I do keep an eye on POs that have been raised and have provided for this to be paid at some point this year but some POs are not completed for months.

AIBU to think they should give me the full credit terms?

Do you owe the money ?
Do you have the money ?

if both answers are “yes”, just pay them

@ExtraOnions yes we owe it. No we don't have it. I do a 5 week payment schedule and since we didn't have their invoices did put it into the schedule it's just shy of £200k they are looking

As someone self employed & sends out invoices. There may have been an error somewhere but the money is over due so I'd pay it. It's the company paying it.......the company might really need this invoice paying to pay bills ect.

@Justsmileanwave it's a large enough company as well with an accounts department. I have had emails from sole traders before about not having sent their invoice and could we possibly pay. Usually I do that day

Surely you knew the work had been done/products provided though?

irrespective of where the error was the question is is this a client worth pissing off by not paying?

Time to write a policy for exactly this scenario.

I don’t understand how you could have incurred such large costs and not be expecting the invoices to be paid shortly afterwards.

If you don’t have the money why are you placing orders of that magnitude?

Is your company insolvent?

I’m an FM and if we had incurred £200k of expenses I’d know about it.

YABU. The money is owed. And you should know that. You are missing the point re your own system failures for not spotting that the invoice had not yet been logged/sent by supplier. If the system had worked properly you wouldn't be in this position.

If you've wracked up invoices worth £200k you must have known about it. If you've already had the credit terms from time work/service then pay up.

YABU. Your systems would know there had been purchase orders raised. Your systems should show the goods/services had been delivered. You must either have poor systems or not been monitoring them, not to have known there were goods/services received for which you'd not received invoices and which were due for payment, especially given the large amounts involved. Surely these liabilities would have been identified/provided for in your monthly management accounts??

As you're an accountant I'm a bit worried about your book keeping/ systems. The company should have known there was a significant invoice coming in, and prepared for it accordingly, by holding the money back.
I mean they should have got their invoices in sooner, and maybe they did or maybe they had a tech. Issue, but ultimately it's [your] company's responsibility to make sure funds are available.

Well if you don't have the money surely there's no choice, you can't pay it immediately.

This is a real process issue.

You don’t need to have purchase orders to be effective, but if you DO use them they need to be used properly, signed off when complete etc and proper commitment reports weekly so you can manage your cash.

Surely there's some sort of procurement process that means you know to expect these sorts of transactions? I've managed a lm accounts department and for every transaction over £500 I had a procurement order to match the invoice too when it arrived and so I knew when they hadn't. For smaller routine amounts eg stationary we had a different process

What sort of accountant are you? You seem to have gaps of knowledge. When doing the WIP and o/s PO's at m/e then this Beth calculation would have been done.

£200k is not a small sum. If you are the company accountant and not just the accounts assistant, this purchase would be accounted for in your budget and in your cash flow forecast. It shouldn’t have been a surprise and the cash should be available unless your customers have failed to pay you, but this isn’t your supplier’s concern.

I schedule invoices automatically but I don’t bother emailing myself a copy, as you don’t argue with a supplier about whether or not they received the invoice. Instead, you look at how the payment issue can be resolved.

I suggest you come to an agreement that suits you both. It’s in their interest to get paid, so they will probably be accommodating.

Why don't you have the money if the work has been done?

Honestly - it’s constant.

I had a company cancel my order recently and instead of refunding me wanted to reschedule - we’re only talking £1500 and they had to repay in 4 instalments. And I had to chase every single payment. They were clearly both insolvent and poorly run.

The number of businesses robbing Peter to pay Paul is scary.

Exactly. When I was the company accountant for a design/manufacturing company, I had daily lists showing the following:

Purchase Orders raised (goods/services not yet received)
Purchase Orders raised (goods/services received)
Invoices Received

As each purchase order progressed, it moved from one column to the next, so I had complete transparency/awareness of our future obligations.

In fact, for the largest of transactions, I would insist on knowing even before the purchase order was formally raised as I insisted that the procurement/buying department would send me a memo with a copy of the proposed purchase order before it was signed off by a Board member, which gave me an opportunity to discuss it with the procurement/buyer and Board member before it was even formally issued if the magnitude of it or payment terms would cause a problem (i.e. to negotiate payment terms or give me time to get additional bank finance to cover it).

To do the job of an accountant properly, you need to be proactive and not reactive. Only knowing about an invoice when you actually receive it is absolutely insane, especially for large amounts.

@taxguru

100% with your post.

Given you don't have the money to pay now, what would you have done if they had sent the invoice on time?

Going slightly against the grain, I don't see anything wrong with sticking to their terms of payment - they should be sending out invoices far more promptly. And presumably they won't want to lose you as a client if they're able to regularly bill you that amount.

That's said, you seem to have some pretty major cash flow issues (are you actually solvent?) so maybe they've got wind of that and want paying immediately.

Surely as an accountant this is something you’ve dealt with a million times before, I’m wondering why you’re talking like this is something out of the ordinary?

I’m not an accountant but a budget holder. If I was managing the work I’d have already had that in my budget so it wouldn’t be an issue. I get suppliers who have sent in invoices which have ‘gone missing’ and then ask for immediate payment. The AP team will deal with it and usually put it through the next payment run. As long as the supplier knows it’ll be paid it’s always fine, ‘immediate’ for us in this situation would normally be in a week rather than normal 30 day payment terms.

I’m really struggling to see the issue here.

@titchy makes an excellent point. If the invoices were sent on time, how would you have paid them?

The engineers raise POs, often these things take months to materialise as it depends on the progress of the project. It has been forecasted but always put into week 6 as it has not yet been invoiced. Once it is invoiced it begins its track in the cash flow to being paid. We are solvent but it's not a company with spare millions sitting in the bank.

I can see we have issues which need to be addressed. But most of the comments seem to think I completely BU and that this supplier has no responsibility to invoice themselves on time.

We mainly work on very large projects. If we sent our invoices after their due date I highly doubt they would pay us immediately.

There is an FD as well I am not the only accountant here so appreciate I may be missing some of the bigger picture.

But most of the comments seem to think I completely BU and that this supplier has no responsibility to invoice themselves on time.

They should invoice on time, but as a business, you should know that 200k of work is being done and have the funds set aside to pay for it.

Someone invoicing late isn't a reason not to have the funds available to pay them.