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  • FIRST POST
    • Deastons
    • By Deastons 14th Sep 18, 9:03 AM
    • 419Posts
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    Deastons
    Self employed - can company pay me on time but less than agreed?
    • #1
    • 14th Sep 18, 9:03 AM
    Self employed - can company pay me on time but less than agreed? 14th Sep 18 at 9:03 AM
    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?
Page 1
    • Comms69
    • By Comms69 14th Sep 18, 9:06 AM
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    Comms69
    • #2
    • 14th Sep 18, 9:06 AM
    • #2
    • 14th Sep 18, 9:06 AM
    Firstly is he self employed or running a small limited company?
    • sangie595
    • By sangie595 14th Sep 18, 9:48 AM
    • 5,640 Posts
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    sangie595
    • #3
    • 14th Sep 18, 9:48 AM
    • #3
    • 14th Sep 18, 9:48 AM
    It's irrelevant. It's take him pretty much most of the 90 days to take it to court, it's small potatoes and not worth the hassle of doing, and if he takes them to court then he'll never get any work with them again. Not really fair, but life isn't, and they know all this so the company don't care. They are big enough to roll straight over him, and that's what they are doing.

    But if he's intent on taking this further he must wait until the 30 days are up. Then he must send a letter before action which allows them time to pay (21 or 28 days being usual). And then if they haven't paid at the end of that he can begin legal action. Of course, that will be most of the wayto the 90 day mark!
    • Deastons
    • By Deastons 14th Sep 18, 9:52 AM
    • 419 Posts
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    Deastons
    • #4
    • 14th Sep 18, 9:52 AM
    • #4
    • 14th Sep 18, 9:52 AM
    Firstly is he self employed or running a small limited company?
    Originally posted by Comms69
    I'm not sure about your question - I'm assuming your point is that they're two different things? He runs a small limited company.
    • Deastons
    • By Deastons 14th Sep 18, 9:55 AM
    • 419 Posts
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    Deastons
    • #5
    • 14th Sep 18, 9:55 AM
    • #5
    • 14th Sep 18, 9:55 AM
    It's irrelevant. It's take him pretty much most of the 90 days to take it to court, it's small potatoes and not worth the hassle of doing, and if he takes them to court then he'll never get any work with them again. Not really fair, but life isn't, and they know all this so the company don't care. They are big enough to roll straight over him, and that's what they are doing.

    But if he's intent on taking this further he must wait until the 30 days are up. Then he must send a letter before action which allows them time to pay (21 or 28 days being usual). And then if they haven't paid at the end of that he can begin legal action. Of course, that will be most of the wayto the 90 day mark!
    Originally posted by sangie595
    So what they're doing is not correct? As in, if it did go to court, my friend would win?

    This company does it with all the people they use, so they're considering taking some sort of action.
    • Gavin83
    • By Gavin83 14th Sep 18, 10:00 AM
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    Gavin83
    • #6
    • 14th Sep 18, 10:00 AM
    • #6
    • 14th Sep 18, 10:00 AM
    Firstly can we just establish if this is for you (as per your title and last paragraph) or for your friend?

    You (or your friend) have an issue here. Let's say you demand they pay the full amount in 30 days and they refuse, then what? Well the clear option is to take them to court. However this process will take longer than 90 days until you get your payment, somewhat ruling this out. The company know what they're doing, basically just trying to get a discount, knowing there's little you can do about it owing to their 90 day payment offer.

    You could potentially take the 5% reduction and sue them for it but this of course depends if the 5% makes it worth it, plus I'm almost certain they'll get you to sign something agreeing to the reduction.

    I guess your action depends on how desperate you are for the money. Oh, and never work for this company again.
    • nicechap
    • By nicechap 14th Sep 18, 10:11 AM
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    nicechap
    • #7
    • 14th Sep 18, 10:11 AM
    • #7
    • 14th Sep 18, 10:11 AM
    Other options include, inflating invoices by 5.26% before they apply 5% discount to leave you in same position.

    Amending the payment terms to paid within 30 days of invoice or 8% p.a. from date of invoice will be added for all payments made beyond 30 days, or words to that effect.

    8% is the usual interest allowed by courts.

    As suggested above, the time delay and hassle of taking a customer to court, who may then not offer you work again, needs to be weighed up in the business calculation.
    “Never argue with an idiot. They will only bring you down to their level and beat you with experience.” - George Carlin
    • Deastons
    • By Deastons 14th Sep 18, 10:14 AM
    • 419 Posts
    • 224 Thanks
    Deastons
    • #8
    • 14th Sep 18, 10:14 AM
    • #8
    • 14th Sep 18, 10:14 AM
    Firstly can we just establish if this is for you (as per your title and last paragraph) or for your friend?

    You (or your friend) have an issue here. Let's say you demand they pay the full amount in 30 days and they refuse, then what? Well the clear option is to take them to court. However this process will take longer than 90 days until you get your payment, somewhat ruling this out. The company know what they're doing, basically just trying to get a discount, knowing there's little you can do about it owing to their 90 day payment offer.

    You could potentially take the 5% reduction and sue them for it but this of course depends if the 5% makes it worth it, plus I'm almost certain they'll get you to sign something agreeing to the reduction.

    I guess your action depends on how desperate you are for the money. Oh, and never work for this company again.
    Originally posted by Gavin83
    This is for my friend, but I also regularly work for this company hence why I have a particular interest. Not working for this company is not possible as they're the largest in our industry - a PLC with £3bn+ turnover.

    This is a relatively new thing the company have introduced, so I've not been directly affected yet.

    I'm trying to establish whether, after the work has been done and contrary to the terms of the contract between the two parties, the company can legally do this.

    If not, we may indeed take it further. Not just for my friend, but for all of us.
    • MEM62
    • By MEM62 14th Sep 18, 10:23 AM
    • 1,786 Posts
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    MEM62
    • #9
    • 14th Sep 18, 10:23 AM
    • #9
    • 14th Sep 18, 10:23 AM
    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?
    Originally posted by Deastons
    Your friend is either self employed of an employee of her Ltd company.

    As for the payment terms, stating 30-days on the invoice is of limited use as the work has already been done by the time that the invoice is issued. What is important is the agreement/contract made before the work was done. What does this say?

    The, somewhat draconian terms, stated by her supplier are actually not unusual. We deal with a could of larger corporations that want the same terms. In cases where we cannot obtain agreement based on our normal 30-day terms I simply increase my selling rates to account for the cost of the interest.
    • agrinnall
    • By agrinnall 14th Sep 18, 10:33 AM
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    agrinnall
    If your friend and you need to have this company as a client in the future then I can't see that there is any option other than to accept the terms, if you/she take them to court to challenge the terms then win or lose there will never be any work available again. So the real decision to be made is whether to be paid in 30 days or 90 days - personally, I'd go for 90 as a 5% cut in payment is massively more than anything that could be earned with the money except for the most extreme gambles (stock market or horse racing, take your pick).
    • sangie595
    • By sangie595 14th Sep 18, 10:44 AM
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    sangie595
    So you have no choice other than to accept work from this company? In which case the answer is clear- no, there is nothing you can do about this because you won't be working for them again if you do. If you can determine the pay rates you could, as suggested, add 5% on to invoices. But I suspect you can't, and that there will be plenty of other people willing to take up the slack if you don't work for them.
    • Comms69
    • By Comms69 14th Sep 18, 10:58 AM
    • 5,445 Posts
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    Comms69
    I'm not sure about your question - I'm assuming your point is that they're two different things? He runs a small limited company.
    Originally posted by Deastons
    Yes, very different.

    Sangie’s advice stands; but your friend is not self employed.
    • Comms69
    • By Comms69 14th Sep 18, 10:59 AM
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    Comms69
    So what they're doing is not correct? As in, if it did go to court, my friend would win?

    This company does it with all the people they use, so they're considering taking some sort of action.
    Originally posted by Deastons
    Taking it to court would achieve nothing.

    Best advice is vote with your feet and refuse the work
    • MEM62
    • By MEM62 14th Sep 18, 12:34 PM
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    MEM62
    Taking it to court would achieve nothing.

    Best advice is vote with your feet and refuse the work
    Originally posted by Comms69
    Absolutely. If there is no specific contract in which payment terms were agreed the court case would fail anyway. Stating 30-day terms on an invoice issued after the work was completed is meaningless.
    • agrinnall
    • By agrinnall 14th Sep 18, 12:55 PM
    • 21,387 Posts
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    agrinnall

    Best advice is vote with your feet and refuse the work
    Originally posted by Comms69

    It's not the best advice if, as seems to be the case, there is in fact a need to work for this company in the future because of their dominant position.
    • Gavin83
    • By Gavin83 14th Sep 18, 1:00 PM
    • 5,453 Posts
    • 9,027 Thanks
    Gavin83
    This is for my friend, but I also regularly work for this company hence why I have a particular interest. Not working for this company is not possible as they're the largest in our industry - a PLC with £3bn+ turnover.
    Originally posted by Deastons
    That gives you even less options then. As others have said taking them to court will likely mean you'll never work for them again, if that's not possible in your industry then it isn't advisable. As unfair as it is it appears they hold all the cards here.

    So I guess either take the 5% cut or wait 90 days for payment, whichever is preferable.
    • trailingspouse
    • By trailingspouse 14th Sep 18, 2:45 PM
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    trailingspouse
    It's normal for big companies to ride roughshod over whatever payment terms you want to agree with them. We normally state 'payment within 30 days of invoice date', and the vast majority of our clients abide by that - but one or two don't. One of our clients simply says their payment schedule is 60 days, take it or leave it; the other (NHS) accepts our 30 days payment terms but then consistently pays on day 59 (the day before Statutory Interest becomes payable).


    My feeling is that, so long as you know that this is how it will be, you can work accordingly. Far worse is the company that agrees to 30 days then doesn't pay.


    So you have to take the pain for 3 months - but you will have money coming in for 3 months after the end of the contract. Swings and roundabouts.
    • Comms69
    • By Comms69 14th Sep 18, 2:50 PM
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    Comms69
    It's not the best advice if, as seems to be the case, there is in fact a need to work for this company in the future because of their dominant position.
    Originally posted by agrinnall


    Indeed, but the alternative is to simply accept the situation. The OP is unwilling to do that
    • Comms69
    • By Comms69 14th Sep 18, 2:51 PM
    • 5,445 Posts
    • 5,532 Thanks
    Comms69
    It's normal for big companies to ride roughshod over whatever payment terms you want to agree with them. We normally state 'payment within 30 days of invoice date', and the vast majority of our clients abide by that - but one or two don't. One of our clients simply says their payment schedule is 60 days, take it or leave it; the other (NHS) accepts our 30 days payment terms but then consistently pays on day 59 (the day before Statutory Interest becomes payable).


    My feeling is that, so long as you know that this is how it will be, you can work accordingly. Far worse is the company that agrees to 30 days then doesn't pay.


    So you have to take the pain for 3 months - but you will have money coming in for 3 months after the end of the contract. Swings and roundabouts.
    Originally posted by trailingspouse

    Atleast with the NHS you know you'll get paid. Unfortunately in the quest for savings the approval process is a mile long
    • stator
    • By stator 14th Sep 18, 5:50 PM
    • 6,597 Posts
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    stator
    Start looking for other clients. When they start making arbitary cuts to invoices, it means their cashflow is in trouble. They will probably be bankrupt in a year or so
    Changing the world, one sarcastic comment at a time.
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