Slow payers - are they getting worse?
trailingspouse
Posts: 4,035 Forumite
We run a business that trades B2B. We have maybe 3 or 4 big clients per year, some of whom are household names.
We invoice monthly, and give 30 days' payment terms.
Until recently, we had
- one client who paid within a week of receiving the invoice (whoop!),
- one client who was always a few days overdue (they would start to process the payment on the due date and make the payment on the next Friday - a pain, but we knew their system, so it was OK)
- one client who was always late (paying appx two weeks after the due date).
But this month - our 'within a week' client hasn't paid us yet, and it's been two weeks, our 'few days' client is 10 days past where they normally pay and our 'always late' client is paying on the day before Statutory interest becomes payable.
These are large reputable companies that we have long-term relationships with. In nearly 8 years of trading I've never had so much difficulty getting money out of people!!
Are other small businesses finding this is happening to them?
We invoice monthly, and give 30 days' payment terms.
Until recently, we had
- one client who paid within a week of receiving the invoice (whoop!),
- one client who was always a few days overdue (they would start to process the payment on the due date and make the payment on the next Friday - a pain, but we knew their system, so it was OK)
- one client who was always late (paying appx two weeks after the due date).
But this month - our 'within a week' client hasn't paid us yet, and it's been two weeks, our 'few days' client is 10 days past where they normally pay and our 'always late' client is paying on the day before Statutory interest becomes payable.
These are large reputable companies that we have long-term relationships with. In nearly 8 years of trading I've never had so much difficulty getting money out of people!!
Are other small businesses finding this is happening to them?
No longer a spouse, or trailing, but MSE won't allow me to change my username...
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Comments
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I have a friend in the construction industry and his small consultancy business has real issues. It's a big debate in that industry at the moment about whether the government should impose a pay window - none of the 10 major contractors pay within 30 days on average. None of them.
He says its an open secret that they keep the money to squeeze every last drop of interest out of it. Some promise to pay you on time if you pay them a fee! It's outrageous.0 -
Bigger firms have been doing this for years, if not decades. I don't think it's getting worse, certainly not seeing any worsening of "debtor days" across my client base at the moment.0
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Interesting - two completely different experiences!
I know it's been common practice - and the bigger the client the worse it is. But the number of 'debtor days' certainly seems to be increasing for us. And we've never before had anyone so blatant as to pay the day before SI comes due. I suppose I should appreciate their honesty (better than 'we've lost the invoice'!).No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
The other tactic is to find something wrong with the invoice or change the job number and request a new invoice, with another 30 days to pay. Such fun.0
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It's a bit of a game most of the time, isn't it?
I send an invoice, giving them 30 days to pay. On day 31 I send an email politely telling them that they haven't paid, and please could they pay as soon as possible. One week later, if they still haven't paid, I ring them and we have a nice conversation about the weather and they give me all their excuses and promise to pay me straight away. And normally that's it - they pay.
But recently I feel like I've been hitting my head on a brick wall.No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
trailingspouse wrote: »....
These are large reputable companies that we have long-term relationships with. ....
Do any of these large reputable companies send you purchase orders? If so, what do they say about payment terms?0 -
Yes, we have PO's.
Our payment terms are 30 days - as per our contract. This is our standard terms of business with all of our clients, and they don't disagree. They just don't pay!! Very frustrating. We get apologies, we even get embarrassment - but the money is slow coming.
Don't get me wrong - we get the money in the end. But compared to, say, 6 months ago, we're having to wait longer for it.
I just wondered if other business owners are noticing a similar trend.No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
trailingspouse wrote: »Yes, we have PO's.
Our payment terms are 30 days - as per our contract.
Do you send an order confirmation stipulating your contractual terms for each order you receive? If not, you could be deemed to be accepting your customer's terms.0 -
Hi, As said before this has been going on for years, in the 80s i help a friend who had a small business.
He did work for 5 or 6 different companies and two of them would pay within a week of the invoice if below a 1000 pounds above that even by a few pounds it would be paid between 30 and 60 days0 -
Oh dear, I don't seem to be making myself clear.
I know there have always been bad payers, and I know that the big companies are the worst.
My question is - do you, from your own experience, think it's getting worse? Because, in my experience, it is.No longer a spouse, or trailing, but MSE won't allow me to change my username...0
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