Large corporates killing small business
Discussion
I have been in business for nearly seven years. Apart from the general work, invoices, replying to emails, speaking to other drivers and customers, driving, a lot of the hassle is chasing invoices. Without doubt the worst offenders are large companies that have a faceless accounts payable department that employ people that get told to hold back invoices. 
Over this time I have spent a lot of time speaking to accouts payable in various companies asking why they have not paid their bill. This gets repeated every few months with the same excuses, "Not received it", "Will be paid this week" (no, it won't), "No PO number/wrong PO number", "No invoice number", "same date as another invoice", "Our terms are 60 days" ("Our" terms!?).
I know cash flow is king. That's not the issue. The issue is the stress and hassle of chasing money that is owned to me for a service I provide.
SME's always pay on time and without hassle.
Large corporates never do. They don't give a toss.
I am on the verge of quitting it as it drives me nuts!
Rant over.
Over this time I have spent a lot of time speaking to accouts payable in various companies asking why they have not paid their bill. This gets repeated every few months with the same excuses, "Not received it", "Will be paid this week" (no, it won't), "No PO number/wrong PO number", "No invoice number", "same date as another invoice", "Our terms are 60 days" ("Our" terms!?).
I know cash flow is king. That's not the issue. The issue is the stress and hassle of chasing money that is owned to me for a service I provide.
SME's always pay on time and without hassle.
Large corporates never do. They don't give a toss.
I am on the verge of quitting it as it drives me nuts!
Rant over.
I really do sympathise with you.
I used to work for a fairly large "corporate" and had numerous disputes with my colleague, the FD, regarding payments to small suppliers.
His view was that we should be delaying payment for as long as possible.
My view was diametrically opposed to this; we clashed regularly.
My department was responsible for the vast majority of the capital (and revenue) expenditure of the company and I had the largest cost centre in the group.
It genuinely got to me how some of my best suppliers suffered because we, and many others, took an age to pay them.
I don't know what the answer is, as Finance departments routinely instruct their accounts payable teams to delay payment as long as they.
Good luck.
I used to work for a fairly large "corporate" and had numerous disputes with my colleague, the FD, regarding payments to small suppliers.
His view was that we should be delaying payment for as long as possible.
My view was diametrically opposed to this; we clashed regularly.
My department was responsible for the vast majority of the capital (and revenue) expenditure of the company and I had the largest cost centre in the group.
It genuinely got to me how some of my best suppliers suffered because we, and many others, took an age to pay them.
I don't know what the answer is, as Finance departments routinely instruct their accounts payable teams to delay payment as long as they.
Good luck.
Know how you feel, I'm a small business, 6 staff and suffer the same.
Yet, does paying promptly get you anywhere, I pay the same day I get the invoice, I'll order stock, invoice emailed as they dispatch it, on arrival next day I'll check it over, and pay the invoice.
If my company closed tomorrow all I'd owe is vat/paye/wages, everything else is paid for.
I know, stupid I know, just the way I was brought up.
Yet, does paying promptly get you anywhere, I pay the same day I get the invoice, I'll order stock, invoice emailed as they dispatch it, on arrival next day I'll check it over, and pay the invoice.
If my company closed tomorrow all I'd owe is vat/paye/wages, everything else is paid for.
I know, stupid I know, just the way I was brought up.
Company I work for is pushing contractors and suppliers to 180 days, already at 90 and they try not to pay that. They have taken a few companies out and have quite a reputation for not paying.
Problem is now when we need repair work done some companies won't touch us. We have an air con unit from a crane that has been out for a year as no one will repair. The crane windows nobody will touch as they still have not paid the £180 for the last clean and the company has given up chasing the money.
Its a complete disgrace, should be more regulated.
Problem is now when we need repair work done some companies won't touch us. We have an air con unit from a crane that has been out for a year as no one will repair. The crane windows nobody will touch as they still have not paid the £180 for the last clean and the company has given up chasing the money.
Its a complete disgrace, should be more regulated.
In a very large company there can be an attitude of 'someone else will do it' or 'I'm not sure I have the authority to pay that'. It is a problem in all departments of all large companies unless the department is very well managed. There's usually someone checking your figures and willing to grass you in to look good to their boss.
I used to provide event support for a few car manufacturers years ago, employing around a dozen or so people, started off great, paid promptly (30 days) then it started slipping to 60,90 eventually 120, while on paper it looks great invoicing for multiple 10's of thousands, it started really hitting my cash-flow, the trouble was there was never one particular person to speak to regarding unpaid invoices, just a dept. so it was a constant merry go round of, oh yes X is dealing with that, but they're on holiday/out to lunch/in a meeting/on another call/cheques in the post, and repeat ad infinitum.
MissChief said:
In a very large company there can be an attitude of 'someone else will do it' or 'I'm not sure I have the authority to pay that'. It is a problem in all departments of all large companies unless the department is very well managed. There's usually someone checking your figures and willing to grass you in to look good to their boss.
It's entirely orchestrated.whoami said:
MissChief said:
In a very large company there can be an attitude of 'someone else will do it' or 'I'm not sure I have the authority to pay that'. It is a problem in all departments of all large companies unless the department is very well managed. There's usually someone checking your figures and willing to grass you in to look good to their boss.
It's entirely orchestrated.MissChief said:
whoami said:
MissChief said:
In a very large company there can be an attitude of 'someone else will do it' or 'I'm not sure I have the authority to pay that'. It is a problem in all departments of all large companies unless the department is very well managed. There's usually someone checking your figures and willing to grass you in to look good to their boss.
It's entirely orchestrated.bazza white said:
Company I work for is pushing contractors and suppliers to 180 days, already at 90 and they try not to pay that. They have taken a few companies out and have quite a reputation for not paying.
Problem is now when we need repair work done some companies won't touch us. We have an air con unit from a crane that has been out for a year as no one will repair. The crane windows nobody will touch as they still have not paid the £180 for the last clean and the company has given up chasing the money.
Its a complete disgrace, should be more regulated.
It already is, The Late Payment of Commercial Debts (Interest) Act 1998 is there to help SMEs, additionally if you're in Construction then you have powers under the Construction Act.Problem is now when we need repair work done some companies won't touch us. We have an air con unit from a crane that has been out for a year as no one will repair. The crane windows nobody will touch as they still have not paid the £180 for the last clean and the company has given up chasing the money.
Its a complete disgrace, should be more regulated.
I've been going ten years, this year is the worst I've known. Not coincidentally, I got into a large customer, a subsidiary of a household name & I'm currently running a sales ledger with them of around £150k which is by some distance, the biggest on my books. They pay erratically at best. It's a process we manage but I'm constantly striking a balance between maintaining my relationship as cordially as possible & chasing money.
With that particular client, I subcontract and to a large extent, depend on one partner to get the actual work done. They factor their sales through RBS who are making noises about the size of the account. All in all, it's massively stressful for me. I have another who I took on after a great deal of thought on 60 days EOM & a 3.5% discount. I don't mind the discount, as I just ratcheted the prices 5% but in essence, I have racked up about 50k in sales since April & only saw the first payment this month. It should have been £11k. They paid 3. So I've jumped all over it & spent a few days being ignored by some purchase ledger clerk which was a waste of my time, so escalated it to a director. This is more or less a constant cycle & I choose my customers carefully. They're all well financed, can pay easily, but a few choose to dick me around.
I know it's just business, I'm not naive but this s
t grinds you down over time & everywhere I've gone, I've encountered it.
With that particular client, I subcontract and to a large extent, depend on one partner to get the actual work done. They factor their sales through RBS who are making noises about the size of the account. All in all, it's massively stressful for me. I have another who I took on after a great deal of thought on 60 days EOM & a 3.5% discount. I don't mind the discount, as I just ratcheted the prices 5% but in essence, I have racked up about 50k in sales since April & only saw the first payment this month. It should have been £11k. They paid 3. So I've jumped all over it & spent a few days being ignored by some purchase ledger clerk which was a waste of my time, so escalated it to a director. This is more or less a constant cycle & I choose my customers carefully. They're all well financed, can pay easily, but a few choose to dick me around.
I know it's just business, I'm not naive but this s
t grinds you down over time & everywhere I've gone, I've encountered it.whoami said:
I do.
So do I and to say it is entirely orchestrated simply isn't true for many large organisations. Poor processes and a lack of individual responsibility are a bigger cause of delays than intentionally paying late.What a lot of small businesses (mine included) are not great at is understanding customers procurement processes well enough to ensure they are paid to terms.
As a one-man band I traded mostly with corporates for 15 years. Perhaps it was because I chose the companies I wanted to work with, or perhaps it was because I got my customers on personality rather than sales tricks, but I never had great problems getting paid - the client was on my side and, if I couldn't get joy from Accounts Payable, they would have a word inside - hopefully because they liked me and wanted to use me again, or just didn't like to see the little guy get messed around.
And then the internet became dominant - and not only did that kill off what I did, but it seemed that the corporates built themselves big websites, and hid behind them, much as defenders in a castle, and it was difficult even to make contacts after that. Corporates are now like countries, and some are of course richer and more powerful than countries. And so you either work inside the castle, trotting about obeying 'policy', or you are outside on the wild plains like Robin Hood, living on your wits and grabbing food where you can find it. But after many years of that there is no way I could possibly spend my life trotting about obeying 'policy'. I can only work by other people's rules if they are better than mine.
Going back to the plot, my answer to possible payment issues - or in reality the concern of where the next work was coming from - always led me to keep a relatively vast reserve in the bank. And then if I was paid in 60 days rather than the planned 30 it was only irksome, not critical or stressful.
And then the internet became dominant - and not only did that kill off what I did, but it seemed that the corporates built themselves big websites, and hid behind them, much as defenders in a castle, and it was difficult even to make contacts after that. Corporates are now like countries, and some are of course richer and more powerful than countries. And so you either work inside the castle, trotting about obeying 'policy', or you are outside on the wild plains like Robin Hood, living on your wits and grabbing food where you can find it. But after many years of that there is no way I could possibly spend my life trotting about obeying 'policy'. I can only work by other people's rules if they are better than mine.
Going back to the plot, my answer to possible payment issues - or in reality the concern of where the next work was coming from - always led me to keep a relatively vast reserve in the bank. And then if I was paid in 60 days rather than the planned 30 it was only irksome, not critical or stressful.
Edited by Simpo Two on Sunday 20th July 10:03
GTIR said:
No, because the profit margins are tight already.
Also, if one of my customers has a factoring company chasing them I will lose the account. I don't know details but I can assume that they will not be calling as your company.
You could take a look at invoice financing.... your bank will buy up to 80% of your debtor book, but you still control collection etc.Also, if one of my customers has a factoring company chasing them I will lose the account. I don't know details but I can assume that they will not be calling as your company.
My company trades with Google who are strictly 30 days and my customers pay 60+ (so they're banking with us) and we turn over tens of millions. so it's a huge issue.
I've been fortunate in that the corporate clients that I have I can also be useful to so develop a working relationship.
Other clients get chased at 7, 14 and 22 days. A personal email at day 60, and referred to a debt collector after. It very rarely gets to this.
I take a view that anyone who takes 60 days to pay is not a client that I want. Lots of low volume clients help with this obviously!
Other clients get chased at 7, 14 and 22 days. A personal email at day 60, and referred to a debt collector after. It very rarely gets to this.
I take a view that anyone who takes 60 days to pay is not a client that I want. Lots of low volume clients help with this obviously!
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