It really works.

Thank you”

I like to think that this did ‘speed up’ things (it only took them two more months), but since the department that’s paying for your work is not related to/does not care about the one that needs you, this is probably not very likely. (that’s why I ended up doing that request anyway)

In a previous life, I worked at a big company where Accounts payable’s target was to keep invoices outstanding for 3 months, and Accounts receivable to get the money in within 2 weeks.

Appearantly it’s common, but not my way..

When I worked for one I and frequently had my business phone line cut off because the telecoms company crazily expected to be paid in the quarter they invoiced.

Having to explain an (obstructive) internal process on an external communication gives a pretty good indicator of the companies efficiency.

Ever seen the film Brazil…

When I started my company (after a bad experience with another one) I made myself the promise I would refuse jobs where I could not negotiate correct payment terms.

So far I’ve been lucky with my clients, but I had to say no to interesting jobs just because of the payment terms, and sometimes that sucks.

These are the rules of the game.

i don’t own balmer. yet.

Surely if a project is completed then the customer should settle up on completion and not after a grace period. I know that the whole world seems hell bent on retaining the 30 day rule but I struggle to see why.

In some cases it is a necessary evil because big companies need to manage their cashflow just like everyone else. In other cases it is just a tactic to keep money in the bank longer.

A more rotten practice is the arbitrary discount. Small vendors get hit with this one a lot: the customer unilaterally applies a discount for early payment. I’ve heard (but never experienced) that Microsoft will apply a 2% discount if it pays within 10 days. I know company that would apply arbitrary discounts as high as 5 or even 7% if they paid within 75 days!

Small vendors without a diversified customer base just have to take that kind of crap sometimes. If your product or service is not well differentiated from the competition, you’re replaceable and the customer can take advantage of that. The vendor won’t be too alarmed if you threaten to stop selling to them and if you raise your rates/prices to compensate, they can find a cheaper vendor to abuse for a while. And the cycle repeats.

We can live with it, but it’s frustrating.

The problem seems especially acute in the UK, although I have also had recent experience of late payment from a major German client.

One company pays another late, that company then pays its suppliers late and at the end of the chain someone has cash flow problems and goes bust. Mea culpa, I have had late payers and been a late payer as a result.

There is no single, simple solution. Saying “it’s our terms buddy, read the invoice” is not realistic. Like any company, especially a large one, is going to start shaking in its boots and say “You know, you’re right, we are so sorry, here’s a cheque”.

I have found only three things work:
1. Budget for late payments. Track your average debtor days and manage your cash flow to that number, plus a bit.
2. Credit control. Little and often, just like sales. Get commitments from your customers and manage against those commitments.
3. Sack your bad payers. Late payment is stressful and life is too short. Don’t do business with consistent late payers.

Basically, we don’t have the money to pay early. Work we do gets paid late because we work for other companies who can’t afford to pay us.

We owe money to the banks and hedge funds are involved. They will always get their money before you do.

To caveat that – I’m not in finance. This is just the way I understand the situation from what I’ve been told.

i’m still stunned/fuming about it…

If they are late payers, you are entitled to charge them annual interest of 8% above the base rate at the time the invoice was issued.

So at the moment that would be about 13.5%. I thin you can also get a single conpensation fee as well.

Do you provide hosting for any of their services….lights off

:)

And why a supplier’s invoice is telling you how your company should function internally is beyond odd.

Perhaps this is boilerplate for other companies within their group, and not for 3rd party suppliers?

I’d just send them your normal payment terms and see if they’ll sign it, trumping their own, rather than jump through their bizarre hoops.

Or–as you say–don’t bother working for them.