[Closed] Contractors, Late payment of invoices..

If you let them, they will do it again and again...

Rachel

What do you think the explanation is?

Usually a change of personnel in accounts payable in my experience.

I tend to approach my contact at the company and point out the problem before slapping interest on the bill.

Don't let them get away with it or they will get later and later and take the pee even more

+1 for having a conversation about it first, let them know they're late, find out why. If you then want to add interest payments, tell them you will first...

99% of the time when things like this happen I find some open communications can help avoid an enormous amount of emotion, and talking about it can actually improve the relationship massively

As above. We were late paying one company a few times in a row so they started calling us just before it was due. It works is and now we tend to get them in time

conversation I'd say first before going off on the penalty notice.

Do you go through an umbrella outfit ? chat to them as well? change in personnel probably or someone spinning things out.

I have had to query a payment delay only once - the guy had forgotten (genuinely - he's pretty laid back... otherwise it's all been spot on the nail (or whatever the expression is) )

You should of course talk to them and then if it still keeps happening apply penalty charges as set out in your contract.

Unfortunately I know that in the real world, some companies will avoid paying you to manage cashflow/etc and will expect you to suck it up. If you add a penalty they may well refuse to pay it knowing that it's likely to cost you more to contest it than what you'll get and they'll get rid of you if you make a fuss.

Of course, if you're happy to leave then that's an option should they play that game but IME most people don't do that.

Welcome to the fun world of contracts 🙂

Alarm bells would be sounding for me.. I've been self employed for almost 30 years and have done contracting. A lot of companies like to pay when they've been paid but it doesn't change the fact that legally the company has to have the funds to pay you at the time of asking you to do the work. Personally I'd have to be getting double my normal rate to wait that long fir an invoice to be paid.
Speak to them first though and explain that it's not on. If the payments start getting later and later or even not paid in full start the process of jumping ship.

Talk to them, if possible find the people who actually process the payments and find out where the holdup is in the process. A little human interaction goes a long way.

As above, welcome to the world of contracting....
Getting paid can by a real pain. Some clients are brilliant and pay on time every time. Other clients just seem to consider it an optional extra. One of mine still owes me for February and March, but has just paid April's invoice (go figure). Fortunately I've got >1 client and over the years have built up a buffer so it's an irritant more than a real issue.
However it does subconsciously affect the extent to which one is prepared to be flexible with work, so ultimately the client loses out.
The key, as others have said, is to find the person who actually gives a wotnot and has the power to sort it out. And always remember you've done the work and are owed the money.

With any relationship conversation is key, always ask why and give them a first chance.
Had some people (not individual contracts) that only processes invoices once a month and only paid them on a certain date, long shot was first invoice took 2.5 months to get paid. We marked down their payment processing details and jumped through their hoops the next time.

If they are taking the piss then add late fees and get looking for other work though.

[i]The last couple of months, they've been 10 days late in paying, so, do I envoke the 5% rule regarding late payment, or just chalk it down to experience? [/i]

What payment terms do you put onto your invoice and/or what was in the contract? If they pay later than this, call them - and keep on call them (and if the Accounts lie/white-lie, then advise the person/Manager of the dept you've done the work for).

If you just invoice them an additional 5% you'll must probably find that they'll query all billing from you and it'll add weeks of delay, and possibly no further work.

And remember, raising and chasing invoices is the only thing you get paid for. Anything else is there to support that.

It could be a range of minor issues T2S. New personnel, holidays, new finance process or system, poor tracking etc. I would put a polite call into the accounts payable dept to discuss to make sure there's nothing serious.

i worked for a small SME that had a healthy order book but serious cash flow issues. At the end of month, finance and purchasing would go through all the invoices and sort out who they would pay. The criteria varied but it ranged from who was critical, how much stock they have & who they had a 'good' or 'bad' relationship with. if someone hadn't sorted out the finance/SCM process 8), I've no doubt the business would have failed.

Just chase it.

Accounts department and then the conract manager etc.

I've been in the debt chasing business for years. Best advice is to start off by making clear what your terms of payment are, (we actually get a signed copy as part of the account opening process just so there is no argument later). Late payment and the account is stopped immediately, i.e. first day late. We have a very brief chase period, after which we send them a copy of a County Court application made out in their name with a note to the effect that it will go in without further notice if the debt goes unpaid for another day.

Curiously we have an excellent sales ledger with very few losses and next to nothing overdue.

The moral of the story being if you allow people to take the piss they will.

Think about it....... they are in effect stealing that which is yours, when else would you accept that in your life without going berzyquack?