Small Bus - Paying an invoice - time allowed

[Deleted User]

Got an account with our supplier who gives us 30 day terms.

Then they send us a remittance advice when its due. Whats an acceptable length of time to wait to pay this? :-)

(Bit of cash flow problem at the moment).

paulwf

It really depends on the company but I'm sure you'll be fine until towards the end of the next month. Once 60 days start approaching expect it to escalate.

If it is for a large amount I would try and clear half of it as soon as possible. The classic mistake when cashflow is tight is to keep putting the large invoices that you can't pay to the bottom of the pile whilst paying the small ones that you can pay. It sounds better to have less people shouting at you but you're better off in the long run chipping away at the big invoices so they don't get left forever.

simpywimpy

When our invoice came in during July as an example, I don't normally pay those until 1st September as we always work a month behind and havent experienced any probs.

Premier_2

[quote=[Deleted User];discussion/2644529]Got an account with our supplier who gives us 30 day terms.

Then they send us a remittance advice when its due. Whats an acceptable length of time to wait to pay this? :-)

(Bit of cash flow problem at the moment).[/QUOTE]

The supplier sends you a remittance advice? :huh:

A remittance advice is to inform someone that they have paid you.

What they should do is send you an invoice. Normally, on 30 day terms, you would be expected to pay that sum within 30 days of issue or receipt of invoice but check your exact tems as they may be different.

The supplier may send you a gentle reminder if it gets close to 30 days (perhaps in the form of a statement).

If we supply you, expect us to make contact with you on day 31 if the funds are not forthcoming ... but then we take an active approach to strict credit control. (which reduces the chance of us getting into cash flow difficulties ourself)

If you are struggling to pay due to genuine cash flow issues, and not a cover for going bust, consider talking to your suppliers asap. The earlier a customer contacts us, the more sympathtic we will usually be to their situation (as long as they are open & honest and allow us to verify their claims).

If the first we hear from a customer is after their account is overdue, we don't offer much sympathy and spend our efforts on recoving our money asap.

theesel1994

Premier wrote: »

The supplier sends you a remittance advice? :huh:


The supplier may send you a gentle reminder if it gets close to 30 days (perhaps in the form of a statement).

That statement will usually have a tear off slip you return with your cheque and this tear off slip will say "remittance advice".

[Deleted User]

theesel1994 wrote: »

That statement will usually have a tear off slip you return with your cheque and this tear off slip will say "remittance advice".

Yep. Thats it.