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?

That’s not what you said in the OP.

Yes - if they’re just sending them for the first time of course it’s reasonable to ask for the usual payment terms.

Your bad. You should have been expecting the invoices and accounted for them accordingly. You don't wait for the invoices before accounting for the payment. That's madness! If you are an accountant, you should know better.

They should give you the full credit terms but you should also have the full amount available to be paid out to them.

Whether you pay it now or as per the terms of the invoice is up to the company, but the money should be available regardless.

Bit if both being unreasonable

Supplier should have invoiced on time, their system mess up isn't your responsibility and usually I'd ask for response to receiving invoice and chase after week or so if not response to make sure it's received. Lessons learned for them

On your end I think as others have said it should be clear that the money was due to come in. You must have had some idea it was coming and to keep pushing into week 6 you are clearly pushing money from elsewhere to pay other invoices. Such a large figure it should be realistically set aside

Part of my role is in A/R and if I cannot prove the invoices went to the client (we use an automated system but my team are cc'd in. System is not 100% and the occasional invoice does go AWOL) then I offer extended credit terms. Maybe not the full period but definitely a grace period.

My A/P colleagues would have raised a PO for 200k and even without the invoice, it would be in their payment forecast for
X period. A large outgoing is planned for.

Also, why are engineers raising POs and not the accounts department?

In many organisations the business user who is buying the goods/services raises the PO and receives in the system to say the work has been done.

So in summary:-

They contacted you today to chase payment because their invoice is overdue.
You said “what invoice?”
They said “the invoice we sent you on the…. Oh shit!”

And now you are debating how far out of your way you should go to pay them now rather than within normal payment structure?

I don’t work in accounts although I do work in finance so have a bit of an idea of your world. Personally, at work, I am pretty willing to go out if my way to help fix other people’s fuck ups. As long as (1) they admit they fucked up and (2) they are nice about it.

However, I wouldn’t put my own cash flow position at risk to sort theirs out.

What dates are on the invoices, and what are their usual payment terms? Do they send regular statements? If so, should those invoices have appeared on the most recent statement?

If they've only just sent them, then they've got a bit of a cheek telling you that they are overdue for payment! I suspect that they've only just realised that they hadn't been produced, and they have backdated them so they are in the right financial period for their purposes.

Someone in your organisation should have known that the POs were completed, marked as such, and that should have alerted you to the fact that invoices would be imminent. What procedures are in place for checking that sort of thing?

However, I wouldn’t put my own cash flow position at risk to sort theirs out.

But the point is that OP's cash flow should never be at risk as the company should know there's a 200k invoice due and therefore budgeted accordingly.

Op

I agree with you. You have just received their invoice and the agreed payment terms should apply.

Therefore process it and pay it on the next due date!

Similar role and yes. If they send it late, that resets the 30 days to me.

Unless a small contractor with an apology.

And yes obviously one a cries for that uninvouced expense. Just don't rush to pay it when it arrives late as the terms are usually 30 days from receiving invoice. Not when they chose to date it.

Jesus Christ, OP. Your mistake here has been asking non-accountants for advice on accounting matters.

Of course you are not wrong. A company can't just forget to send out an invoice, then send a backdated one and demand immediate payment of 200K! That's their mistake, and it's completely unreasonable of them to expect you to forgo the normal payment term.

I suspect the person in the other company fucked up and is now trying to mitigate their mistake by trying to put pressure on you to pay early, to avoid getting in trouble with their own boss. But it's not your problem.

Obviously it is entirely their fault that they sent the invoices late (and backdating invoices is surely one of the oldest tricks in the book).
So no, I wouldn't scramble to pay them quickly but I wouldn't be unnecessarily awkward about it either.

They'd just go into the system and be processed as usual.

This is bread and butter stuff for accounts/ finance.

I agree, especially the bit about the other party forgetting to send the invoices, and now trying to cover up their error by backdating them and asking for immediate settlement.

Nonetheless, there should be some procedure in place that informs accounts of the completion of large purchase orders, so they can make provision for the invoice payments in their cashflow calculations. That is what has really gone awry here - the work had already been completed, yet nothing alerted the OP to that effect. For a contract worth 200k, the system should have picked that up.

But that’s not what she said - she said the the supplier had sent it but couldn’t tell her where to.

Given the update where op changed her story clarified it was the first time they were received it changed things significantly.

@Merryoldgoat

She was quite clear right from the start that they were never sent an invoice. The other company said they had so of course she asked them to show proof of where they sent it, because she didn’t have one.

She was just explaining the conversation she had with them.
”You owe us a payment.”
”We don’t have an invoice.”
”Well, we sent it.”
”oh, really? Where to?”
”Wait, we didn’t actually send it.”

She never said she had an invoice. The entire point of the OP was that they had not sent an invoice, and have now sent one Kate and demanded immediate payment when payment terms are 5 weeks from the invoice date.

I think you’re perfectly fine OP to stick to your payment terms if they made a mistake with sending out the invoice

(sadly learnt that one the hard way when I did exactly the same thing and didn’t send out an invoice and then chased them up for payment, although it wasn’t anywhere near 200k thankfully)

However from the other side, this does happen to us fairly recently when we receive invoices (again sadly not 200k) and depending on the amount we usually just pay it fairly quickly anyway as we do usually know what bills to expect. It does depend on how rude/nice the invoicer is though about it.

We have previously agreed to pay in installments, which is usually a happy medium for all.

No, OP said "[the invoices] are over due but I have never received them before" and that the supplier said they had already sent them at an earlier date, but when pressed to provide proof, could not do so.

I.e., the supplier forgot to send the invoice out on time (or there was an error in their system which meant it didn't get sent out, or was sent to the wrong person), but they are now bluffing, trying to act like they did send it out on time, to skip the normal payment term and be paid immediately.

And most of us accountants would stick things accrued but not yet invoiced into our Cash flow at 4-6 weeks time. Ie assume we'll receive the invoice soon so it will be paid 30 days after that. (Unless other terms agreed)

Exactly, when I worked as a company accountant, I did my management accounts, forecasts etc on an accruals basis (as required by company law and accounting standards), so I provided for "ins and outs" as they happened, not on the dates the invoices were raised/received.

I left the "boring" bits of the ledger work, bill paying and customer payment chasing to my book-keepers and ledger clerks.

So I was always a few steps ahead of the actual money coming in and money going out, so we never had any nasty surprises.

To be honest, I didn't really pay much attention to the bank balance, monies in, monies out, etc., on a daily/weekly basis as I left that to the book-keepers and ledger clerks. My role as accountant was the "bigger picture" of ensuring and reporting on profitability and putting finance in place (additional overdraft facility, loans, asset financing, drawing out of deposit accounts etc) 2-3 months in advance of the money being required to be paid based upon purchase orders and delivery dates.

The procedure for winding up an insolvent company is a considerably lengthy and involved process, and in any case the OP's employer is not in the UK so different laws would apply.

If I'd known years ago what I know now, I might have gone into the insolvency practitioner line myself. Very lucrative.

Exactly, I don't think I said anywhere in my thread that they had sent the invoices. They haven't and can't show me that they have, to me or to someone else in the organisation. Because I know that can happen, an invoice sent to maybe the MD and he doesn't send it to me. But no, they didn't email it to anyone and just wanted us to pay these 'overdue' invoices today. No statements were sent.

We have agreed to split the credit terms. They have also assured me that invoices/ statements will be issued prompty in future.

@applestrudels ya I was just frustrated going back and forth on the emails and had no one to moan to in the office so said I'd post here.

@blacksax I trained in practice where they had a small team who did them. Again not in the UK but it is a loooong process.

There is no law that says you give 30 days terms. Terms are subject to status and a credit check. There after 30 days is a default and not law. You do not have to give anyone 30 days to pay .