Late Payment Of Invoices By Local Council

steve2361

Hi

I run my own small transport firm and invoice the council on a regular basis, they are now getting to be later and later with payments, I have a 30 day standard agreement with them.
I have started to invoice them for late payments but they are now saying that they class me as having been paid when they make a BACS payment but I normally only receive it in my account 3-4 days after that.
They are also disputing one late payment claim as original invoice was wrong but took 3 weeks to tell me ! Amended invoice sent but I took original date of invoice as date to start 30 days, would I be Correct ?
Any help at all would be greatly appreciated, this is really causing problems with my cash flow and I always seem to be robbing peter to pay Paul !

Cheers in advance
Steve

paddyrg

Alas, they technically are paying you within 30 days, but with a willful cheek with BACS clearing time. Perhaps they could use Faster Payments instead.

30-day beats some of the big high street shops who can force terms of upto 120 days, or device to automatically give themselves a few percent discount for paying on time (but not your on time, theirs, based on 60-90 day terms). It ends up coming down to how much you want their business, as they've obviously decided how they're going to operate already.

steve2361

I'm interested to know if the day the money goes into my account is classed as the day of payment or is it when they raise the BACS payment which is 3-4 days earlier ?

pleasedelete

Do they promise 30 days? You can set whatever terms you like but unless they agree to them that is meaningless. What are their terms- not what terms do you state to them.

I contract to a range of local councils and government agencies. They state different times for payments ranging from 2 weeks (but they never do- usually 3-4 weeks ) to 3 months (again never takes that long usually about 2 months)

The plus side is that they always pay- so a very low risk client.

steve2361

Yes their terms are 30 days

AbbieCadabra

From what i know of councils, i'm shocked you get paid even close to 30 days, 90-120 days seems to be the usual.

You could put additional info on your invoice that any errors should be notified to you within 7 days of receipt of invoice. Not sure how binding that is or whether they'd do it though! If you really want to tighten up your policies, you'd need advice from someone who specifically deals with terms & conditions.

Regarding your usual payments being 3-4 days 'late', kick up too much fuss & risk losing the contract? Or perhaps factor in an additional 7 days on their invoices & work your cashflow around that basis.

paddyrg

Personally I'd swallow it - or don't. If you do, remember to add the equivalent of 4 days interest (at negligible percent) to your overall quote if it's the difference between eating and starving. If you don't, they may be frankly incapable or unwilling to change their accounting cycle to accommodate you, so you find another client.

Alas the realities of being a small business are harsh, and if you are struggling with 3-4 days of cashflow it sounds like you may need to look at the business structure/viabiliy as one missed cycle and you'd be stuffed. I know I keep maybe 6 months buffer in the company, so somebody else's catastrophe needn't become my own.

DKLS

Golden rule for working with councils increase your prices to allow for working with morons.

I tend not to do much council work these days to the hassles and hoops you have to jump through and if I do, I add 20-30% extra on the quote to soften the pain.

Mistral001

It depends on what you agree between themselves. They can insist on different terms of payment to the ones that you have on your invoice, if you want to get work with them.


Many businesses will pay suppliers on their next payment run day after the 30 days which means that if your 30 days are up on the first of the month and they make payment run is on the last day of the month you will have be paid just short of two months from the date of your invoice. Some even insist on three months payment terms. I would have thought that you have actually got quite a good customer in this Council, especially since they are unlikely to not pay eventually, which is the not the case with many other customers.