Customer skips invoice :(
 

A customer of mine missed an old invoice on a recent payment. We offer a 2% 10 NET 30 discount which they took on the two that they paid. Missing an invoice is not uncommon so I shot them an e-mail reminder asking if they needed a copy of the missed invoice. Their response was shocking in it's brutal honesty:(

"We have the invoice. We just missed the 10 day discount window so we will pay the first Friday after 45 days."

Customers play games all the time to scam a discount, but I've never had one admit it before.

Please, I had to tell a client that we would not make any further submittals on their behalf until the $105,000 in outstanding invoices were paid. They were 204 days overdue!

Their response: I can't believe you would hold be hostage over this. I am a valued client and should be treated as such.

:rolleyes:

len, it may be helpfull to add, in the future, a note on your invoices "invoices paid after 30 days subject to a 5% late charge"
end of problem...

Want one better?

Title Company named after this country slowly builds an outstanding balance to over 11K, we start to hammer a them to pay up.

To complicate this, they no longer order from us because their parent company now owns a Land Surveying company that subcontracts out the work to local surveyors. We are a subcontractor.

We are told by the branch manager to drop it, or they will make sure the Surveying company stops using us. This surveying company is one of our largest customers right now with the market the way it is. We cannot afford to loose them right now.

So I have to eat 11K in past due bills. You may ask how I let them get in so deep, this is 1 months of invoices for 1 office. It was easy for them to run up a balance like this.

How is that for a scam and blackmail all tied up in one?

I also had a builder go belly up and leave me holding another 10K in unpaid invoices. We cut them off when they fell behind and they continued their projects with another surveyor. Now we are putting liens on all their customers houses.

I can go on and on... There is easily over 50K out there right now owed to me with current customers that choose to wait 3-4 months to pay. Hammer at them and loose them and I cannot afford to loose any of them right now.

Yea, we tried the fee once, they just will not pay it. They know they have us over a barrel. What am I going to do about it?

Like I said, scamming for discounts is not uncommon (my personal favorite is when they write a check taking all available discounts on that date...then mailing it 2-3 weeks later). It's the stones that gets me, big greasy stones.

Or require payment in advance.

Our current unpaid invoices = $750,000 +.

When you deal with developers, real estate agents, and contractors don't expect common courtesy or even getting paid for work done.:mad:

Yea, that would happen:D

Manufacturing just doesn't work that way.

I understand your frustration. Been there. But they are not really scamming a discount if you offer it for payment within 10 and they pay within 10.

If they miss the 10 then they will do what all businesses do, pay as late as possible.

Now dating checks and sending them later, that is scamming and scummy.

I'd modify my contract so that the discount only applies to payments postmarked within the 10 day window and received no later than 5 business days after day 10.

Did you work for the builder or homeowner? Liens post closing? Not only does that seem wrong, how is it going to stick?

I couldn't disagree more. This is at best a loophole in the wording of age old industry lexicon. They know damn well they have no right to a discount on recent invoices while old one languish.

If the invoices went to different departments in a huge company or were paid by different departments I could understand, but this is not the case.

This company looks at a stack of invoices and instead of paying the most due they pay the most recent to take a discount...this is a scam.

When we owned our business it was typical that the larger the customer, the longer they would drag out the payment. I found that calling the customer's A/P department with a sob story ("We're a very small company.") would usually yield results. Sometimes I would just happen to be in the neighborhood with the new invoices and would use that opportunity to discuss the past due stuff.

I don't advise showing up for a meeting over unpaid bills in your 911.

The joys of private enteprise.......


Ain't life grand?

A few years ago our biggest two clients went out of business within 6 months of each other--unpaid bills equaled $650,000. Down the drain. A class action against the parent company of one of them netted us $7000. Big deal.

Ahh, did not get that from your initial post.

You should close that loophole.

Ahh, did not get that from your initial post.

You should close that loophole.

I wish I could pay my bills when I felt like it.

We had a 1st time developer make $12 million (take home, not gross) from a project we did and then complained over a $1500.00 bill.

You have hit a sore subject with me. Can you tell? :mad:

The other side of the equation. I had about $20k going on 90 days from a good customer. The (incompetent sounding) payables woman tells me it will mail on Thursday (Atlanta to Chattanooga). Friday no check. Monday no check. Tuesday no check I call. She assures me she mailed it. I'm skeptical. Wednesday, Thursday, no check. Friday I call again. She swears up & down she mailed it. I say, stop payment, re-issue, fed ex. She begs me to wait a little longer. Monday, no check. I call. I say that they could have given the check to a blind, tree legged dog & it would be here by now. Quit the crap & send me a check! She says if it's not there in the morning she ill re-issue & fed ex. Tuesday am the check arrives, with the exact postmark date she said she mailed it on. 11 days to make a 1.5 hour trip. Neither rain, nor sleet, nor gloom of night, or something like that.

The USPS furthering the cause of customer relations.

You could always demand a percentage as a retainer/deposit. That's how we do most of our contracts - X% to get going, Y% at some milestone (60% completion, usually) and the balance upon completion. You could implement a policy like that for all but your "preferred" customers (who get standard 100% invoicing) and tell everyone that you're doing this (and guess what, you're not a "preferred" customer, in not so many words). It's a subtle way of telling them, "if you're going to play these games with our billing, we're going to make it harder on you, but not to the extent we're willing to throw away the contract". Basically call their bluff. Or simply tell them they're no longer eligible for the discount at all.

My firm pays EVERYTHING on receipt. One thing I absolutely believe in (especially in business) is "pay your bills on time". I don't care if some bean-counter tells me we're losing $100 a year in lost interest gained by holding the funds or whatever, clients, customers, consultants and other professionals recognize it and appreciate it. I believe it comes back to us in the form of healthier business relationships and more work.

One of our former clients used to have a standing "120 day clock" for all invoices. Can you believe that schit? FOUR MONTHS to even CONSIDER getting paid. A small business (even many medium ones) simply can't operate running continuous deficits or "gap" measures like that. Glad to have better clients now.

Different industries. The big three release funds and it flows down hill in automotive. Paying within 30 or getting anything up front just does not happen.

I have had the USPS mess things up for me numerous times.

If I mail anything of ANY consequence, I FedEx it. Worth every penny.

When I've had fights with my homeowners assoc. years ago (they changed management companies several times with new phone numbers and addresses and didn't tell anyone where to send the checks), they'd take my most recent payment and apply it to "past due" bills, then tell me my most recent one was short by that much. I think if you had a contract rider or billing policy that said "All payments received will first be applied to oldest outstanding invoice," then you could probably skip the discounts.

At my current company, we require a credit card number and auth. form signed before we'll do work for someone. If they don't send in payment, we charge the credit card. If they dispute the charges, we can easily document the qork request they sent in and the work we did for them. Ironically, the fed. gov't. is probably our fastest and most reliable paying client.

20% of my customers pay well (pre 30 day mark)

30% around the 30 day mark (plus 10 days)

40 % are around the 46-60 day mark:mad:


10 percent are in the 65-120 range:eek:

we send out late notices via e-mail and FAX, A guy in the +60 day mark yelled @ my wife for a late notice via fax, one of his employees saw it

Joanna told him "well if you paid your bill on time I wouldn't have to fax you"

sad thing is I get alot of the small orders that are the late pays - the oldest invoice that I have is for 49.xx !

the longest that I ever had 280 days late was for $100 ! wtf Yes, hell will freeze over prior to me shipping anything to theese azzclowns again

If she has her own postage meter she can run it through today and not physically mail it till whenever she feels like it.

be glad you don't have to deal with autrozone...they demand net 365 to start with and after a whlie it is net 500. They return over half what they buy too...
Napa has the similar deal, net 365. They demand unconditional returns, we pay shipping both directions AND they FINE us when some thing is not "conforming " to their stanndards...:eek:

Brutal.

needless to say when I get a call from AZ..I just say Gooday..out of stock!

stop using cheques and tell them to wire money
100% of Europe does it that way
no more transport problems, delays, bouncing cheques, waiting for cheques to clear, etc etc

i still don't understand why the US still uses an antique method to transfer funds

Europe, send bill,
bill goes to finance dept
(let's for one instance exclude the option of stalling on their end, that happens here just as well)
finance controller fires up his pc, logs the crap in their accounting software, clicks a button "pay the buggers" and the accounting software just links up to the bank, and wires the money
if it's same country, in most cases, the money will be on the account within 30 minutes, if it's within the EU , usually within 2 days (legally the limit is 4 working days, but it's usually faster), or instantly if it's a priority transfer ( costs about 4.5 euro's within the EU)

even sending bills these days is moving towards electronic form
soon there won't be any paper/envelope required, many utilities companies are already doing this right now


seriously, cheques is like using clay tablets with hieroglyphs to pay for your groceries

Most large US companies do use wire transfers as you describe, but that would not be typical of smaller businesses imo. Don't even begin to try to understand why we do some of the things we do...heck, WE don't even understand :)

BTDT, businesses where it is customary to provide services, then send invoices, can be tough.

People just don't like paying for things they received in the past, even if the past was only 30 days ago.

I found the best way to get payment was the "continuing need" theory. People will pay last month's invoice if they need you to do things for them this month. (Course may not work in all industries).

just add it to the conditions "payable by wire transfer"
in Europe cheques are about to be discontinued completely
and banks in the last 15 years (especially since computers and internetbanking grew) charged increasingly more and more for use of cheques , to force people into phasing out

Stijn,

I read an article a while back about how advanced Europe was in this regard. Even on the "public" level in paying utility bills. Even though we can do this in the U.S. the payments are not in real-time like they are in Europe.

I work for the builder and most of the houses are still under construction. So, by law, I have the right to lien the property in order to get paid. If subcontractors did not have that they would never get paid. Many builders play games and when the economy slows like it did here many do not stay in business long, they are using the money from the next house to pay for the last.

Must be the company I work for. Our accounting dept changed all PO's to net 45 a while back. Some b!tched, but most realized they're lucky to get paid in 90 days anyway so what's the difference. BTW, this is Fortune 500 company :rolleyes:.

I work for a private engineering consulting firm. Our client is a public agency. Our task is to handle the construction contractors who are signatory to the public agency's construction contracts. So......I look over one shoulder and I see the public agency. I look over the other shoulder and I see the private construction contractors. Guess where I see the least responsible behavior? Guess who plays all the games? Guess whose agenda is to gouge others and hide the information they might need? And guess whose commitments are reliable met, and whose cards are on the table for anyone who cares to check on them?

Heck, if the construction contractors would do, say, 80% of the things they promise to do, in writing, this client would not need me. The public agency, on the other hand, pays its bills on time, satisfies each and every one of its commitment quickly without need for reminders and provides the contractors with the administrative and managerial help they so clearly appear to need desperately. Yeah, you guys can pretend all you want that gubmit is the problem but from where I sit, the view is crystal clear. Construction contractors. Just one step up from used car dealers. Or maybe they are tied.

i guess the banks got you by the balls in the US
over here a lot is regulated by the gouvernement as to what banks can or cant' do, even what they have to do in terms of service, they can't charge what they want for their service, eg , they can't charge per transaction for private persons

just recently they had to make all EU transactions free for private persons
if done via proper EU bank codes (IBAN&BIC BIC is bank code, IBAN is a combined number of bankaccount number and then something of the local bank)eg, not just by the number in the recipients country

i believe next year they are harmonising all cashmachines and shop systems so any regular bank card, works in any EU country, any shop ( at the moment there are several systems to which some banks are member off one of which is called MAESTRO. but not all shop payment terminals take it,
note, this is completely aside from VISA, MC , AMEX, which technically does not go via the local banks, but via the CC companies

another step is they are restructuring , all bank number formats across the EU, so soon you'll be able to wire money to any old EU country, simply by the bank account number , at which time IBAN&BIC will become obsolete


i think this is one case where "government" has show that it can make big differences, but i think the US system of lobbyists, and interest groups have to much of a hold of politics to let any form of govermenent butt in with it's way of doing things... no? and those in power, senate, congress, whitehouse, those really couldn't care less about it, while i think they should, because it allows for a more dynamic economy, and i think y'all could use some of that at the moment ( and even if not now, i think any time is a good time for good solutions that improve economy )

This stuff has nothing to do with government. The US government, for all its ills, does pay vendors on time. They really are good about this. But it has nothing to do with this other stuff between private parties.

i was referring to getting bank transfers instated as the standard way of making money go from point A to point B , doing away with cheques , something pretty much antique in the rest of the world...

It has everything to do with gubmit. Gubmit is the structure of what is permissible and what is not. The very liberal (you guys pretend it's "socialism") systems in Europe, nicely outlined by Stijn, are a good example. The reason we have so many way of bilking money from each other here, is because we (you, not me) think that's a good idea. Since millions of dollars are being squeezed from personal bank customers in transaction fees alone, you guys think that's economic progress. I think it's regressive. Regulation of banks and telecommunications companies alone could probably save the ordinary citizen more money than all the tax cuts you can dream up. The system can work for citizens, and in European companies that's what happens. By contrast, America has chosen to place the corporation in a superior position to citizens. That's a big problem, and then it's going to become a huge problem, and then it's going to bring this nation down. Unless we wise up.

In the US, if a client totally stiffs you and you don't care about ever doing business with them again, send them and the IRS a 1099 gift form and let the IRS go after them for the taxes.