Self employed - can company pay me on time but less than agreed?
Comments
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A friend of mine is self employed (a small limited company) and recently did some work for a very large, national company.
The terms of their payment on the invoice says 30 days. The large company has come back saying that my friend has two options:
1. Be paid within 30 days but with a 5% reduction
2. Be paid in full in 90 days
I said this isn't right and they must pay within 30 days as those are the terms on your invoice. Is this correct?
The 'terms' on the invoice are irrelevant unless you have a signed contract confirming the client will pay on whatever terms your friend chooses to put on the invoice.
It's a really easy decision, so all this foot stamping is silly. If this is such a huge corporate, it'll just dispense with the services of the minnows if they make a fuss. Your friend needs to accept one of the options, or look elsewhere for business.0 -
Thanks for all the replies.
I thought people would say this company couldn't treat people like this etc etc., but it seems they can.
As has been pointed out, now I know this, I'll just budget accordingly.0 -
Thanks for all the replies.
I thought people would say this company couldn't treat people like this etc etc., but it seems they can.
As has been pointed out, now I know this, I'll just budget accordingly.
Whether they can or not isn't really the point, it's about what you can realistically do if they do want to impose terms like that and what the risks are if you don't jump through the hoops.
Up to you to weigh it all up. Good luck.“I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse0 -
The company is not treating people like this - it is treating another company.
With a Limited Company, it is a B2B arrangement.0 -
Its just the reality of who has the power in the relationship.
They could probably even go so far as to insist on paying 'early' and taking the discount - no choice at all for the smaller player.
It isn't right, fair or easy , forcing small businesses to fund giant ones' cashflow but it has been ever thus.
Your only realistic redress is price accordingly if you want to work with them.
These terms are NOT an automatic sign of impending failure. They might be but they are actually very normal, just another way of a big business flexing its muscle.
Surely you have heard of it the other way round when businesses offer a discount for prompt payment. That then looks like a plus to some consumers.0 -
Most big companies have their own terms and conditions for their suppliers which are expressed to override anything in the suppliers own contract or invoice. So it's pretty irrelevant what your friend put in his invoice from a legal point of view. What he needs to check are the terms and conditions on the purchase order or other paperwork the company sent him.
Personally I'd wait the 90 days and be paid in full unless my cash flow was awful but it's his call.0
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