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  • FIRST POST
    • TINKERBELL
    • By TINKERBELL 9th Mar 18, 8:55 PM
    • 49Posts
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    TINKERBELL
    Maintenance Contractor breaking the law?!
    • #1
    • 9th Mar 18, 8:55 PM
    Maintenance Contractor breaking the law?! 9th Mar 18 at 8:55 PM
    We run a small business. One of our customers, a very large maintenance company, has emailed all their suppliers telling them that they will deduct 2.5% from every invoice submitted to them. This is despite purchase orders confirming a set price. I realise this is against the law but do not know how to handle this? Has anyone else experienced this? Any advice?
Page 1
    • ssparks2003
    • By ssparks2003 9th Mar 18, 9:03 PM
    • 350 Posts
    • 465 Thanks
    ssparks2003
    • #2
    • 9th Mar 18, 9:03 PM
    • #2
    • 9th Mar 18, 9:03 PM
    Negotiate, talk, end relationship ?
    • stator
    • By stator 9th Mar 18, 9:10 PM
    • 6,224 Posts
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    stator
    • #3
    • 9th Mar 18, 9:10 PM
    • #3
    • 9th Mar 18, 9:10 PM
    Obviously you can take them to court if they don't pay an agreed contract on time.
    But if you continue to accept new orders from them then you might be deemed to accept their offer, for the new orders only.

    They are probably going bankrupt soon anyway.
    Changing the world, one sarcastic comment at a time.
    • ssparks2003
    • By ssparks2003 9th Mar 18, 9:20 PM
    • 350 Posts
    • 465 Thanks
    ssparks2003
    • #4
    • 9th Mar 18, 9:20 PM
    • #4
    • 9th Mar 18, 9:20 PM
    This happens fairly often in some industries. I would say from a practical perspective can your business afford to lose their business? And is your business easily replaceable for the customer. If so you may wish to consider how you proceed with this situation.
    • Takeaway_Addict
    • By Takeaway_Addict 9th Mar 18, 9:22 PM
    • 5,794 Posts
    • 6,682 Thanks
    Takeaway_Addict
    • #5
    • 9th Mar 18, 9:22 PM
    • #5
    • 9th Mar 18, 9:22 PM
    We run a small business. One of our customers, a very large maintenance company, has emailed all their suppliers telling them that they will deduct 2.5% from every invoice submitted to them. This is despite purchase orders confirming a set price. I realise this is against the law but do not know how to handle this? Has anyone else experienced this? Any advice?
    Originally posted by TINKERBELL
    If you don't need their business then I'd send them one saying

    Dear Sir/Madam

    Thank you for the letter informing me of your intention to deduct 2.5% from each invoice. As such with the increased administration costs involved I am going to need increase all invoices by 2.6%

    Yours sincerely

    Tinkerbell
    Don't trust a forum for advice. Get proper paid advice. Any advice given should always be checked
    • MatyMoo
    • By MatyMoo 9th Mar 18, 11:44 PM
    • 2,839 Posts
    • 13,100 Thanks
    MatyMoo
    • #6
    • 9th Mar 18, 11:44 PM
    • #6
    • 9th Mar 18, 11:44 PM
    Have you checked the terms & conditions on the PO you received? is there a clause in there giving them the right to change the price after you accept the PO?

    If not, I would write back saying thank you for your letter but under the terms of our agreement to supply we are unable to accept this reduction in price and expect to receive full payment of our invoice.
    Proud Member of Mike's Mob
    • TINKERBELL
    • By TINKERBELL 10th Mar 18, 9:14 PM
    • 49 Posts
    • 1 Thanks
    TINKERBELL
    • #7
    • 10th Mar 18, 9:14 PM
    • #7
    • 10th Mar 18, 9:14 PM
    Thank you all for your replies. I did write to them refusing to accept their changes but received a reply basically stating accept or find other work! There isn't a clause in their purchase order saying they can change the price. We can't afford to take such a large organisation to court. Looking at their accounts at Companies House, their turnover is good but they didn't take any dividends out last year and they haven't shown a cashflow statement and debtors is high, indicating possible cash flow problems I guess. Very unethical way to run a company! I doubt if their customers would be comfortable knowing how they are treating their suppliers! Frustrating that they can get away with this . . .
    • jobbingmusician
    • By jobbingmusician 10th Mar 18, 9:59 PM
    • 19,141 Posts
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    jobbingmusician
    • #8
    • 10th Mar 18, 9:59 PM
    • #8
    • 10th Mar 18, 9:59 PM
    MCOL for one of their smaller invoices, claiming the extra 2.5%? This should cost virtually nothing, and will then provide a precedent for all other invoices.

    (I'm not an expert, just a suggestion of what I might try.)
    I'm the Board Guide on the Matched Betting; Referrers and Jobseeking & Training boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there. Board guides are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.

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    • BooJewels
    • By BooJewels 10th Mar 18, 10:06 PM
    • 273 Posts
    • 203 Thanks
    BooJewels
    • #9
    • 10th Mar 18, 10:06 PM
    • #9
    • 10th Mar 18, 10:06 PM
    My husband's employer, a small company, had a big customer who started changing the rules - moved finance to overseas (making it impossible to chase payment), changing purchasing and invoicing methods regularly to inconvenience, extended payment terms from the contracted 30 days to 120 days etc. (not that they paid promptly in the first instance).

    They decided that they weren't comfortable with to those developments and felt the writing was on the wall and were no longer happy to do business on those terms and to pull their supply at the end of all contracts, as they naturally concluded. That client company was Carillion.

    So perhaps trust your instincts, minimise your own risk and take measures to protect yourself.
    • stator
    • By stator 11th Mar 18, 1:22 AM
    • 6,224 Posts
    • 4,109 Thanks
    stator
    Thank you all for your replies. I did write to them refusing to accept their changes but received a reply basically stating accept or find other work! There isn't a clause in their purchase order saying they can change the price. We can't afford to take such a large organisation to court. Looking at their accounts at Companies House, their turnover is good but they didn't take any dividends out last year and they haven't shown a cashflow statement and debtors is high, indicating possible cash flow problems I guess. Very unethical way to run a company! I doubt if their customers would be comfortable knowing how they are treating their suppliers! Frustrating that they can get away with this . . .
    Originally posted by TINKERBELL
    As long as your invoice is under 10000 it costs virtually nothing to take a company to small claims court. You don't need a lawyer, and they can't (usually) claim their lawyers fees from you, even if you lose.
    I would suggest you write a further letter refusing to accept their conditions again, or you just increase all future invoices by about 2.5%.

    If you really can't afford to lose the client, then I guess you have to cut your rates by 2.5%.

    I would also suggest you consider taking out insurance against them going bust, if it is possible.

    You need to prepare yourself for the worst and try to mitigate in advance the effects of your customer failing.
    Changing the world, one sarcastic comment at a time.
    • prowla
    • By prowla 11th Mar 18, 5:14 AM
    • 9,746 Posts
    • 7,805 Thanks
    prowla
    Is there a late payment clause in the contract?

    Could you unilaterally implement a 2.5% reduction in the service?

    Would you be prepared to walk away?

    Can you inform them you are implementing a 2.5% increase?

    I once worked as a contractor for a company and they issued an edict saying that they were cutting all rates by 10%, take it or leave it. I declined to accept and said I'd leave, thanks very much. My manager came back to me and asked if I would stay, but via another agency; I accepted and negotiated a 10% increase!
    • TyreLever
    • By TyreLever 11th Mar 18, 5:58 PM
    • 197 Posts
    • 90 Thanks
    TyreLever
    Is there a late payment clause in the contract?

    Could you unilaterally implement a 2.5% reduction in the service?

    Would you be prepared to walk away?

    Can you inform them you are implementing a 2.5% increase?

    I once worked as a contractor for a company and they issued an edict saying that they were cutting all rates by 10%, take it or leave it. I declined to accept and said I'd leave, thanks very much. My manager came back to me and asked if I would stay, but via another agency; I accepted and negotiated a 10% increase!
    Originally posted by prowla
    Lucky !!!!!!!, just goes to show you can turn a crap situation around. Not very often tho.
    Sometimes my advice may not be great, but I'm not perfect and I do try my best. Please take this into account.
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