Large corporates killing small business
Discussion
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.
Are you a demolition company? We've done hydraulic work for a company that sounds like yours and... Well, we're never working doing anymore. We don't want to work for companies that don't want to pay. Thing is, when you get a reputation for being a slow payer then all suppliers do is bump the price up 25-50%. Still not worth the hassle though!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.
b0rk said:
Good luck with that if you go legal then fully expect the client to become an ex-client as soon as they possibly can.
It's not always bad news. We started proceedings against a FTSE250 client and 5 years later we are still working with them. That said I am sure it would be different had it been some of our other customers.In this case it wasn't the fault of the people commissioning us, it was the monumental incompetence of their back office.
bga said:
In this case it wasn't the fault of the people commissioning us, it was the monumental incompetence of their back office.
Which in my experience, the incompetence is wilful. I had a friend in Finance and one day I was complaining "it's almost as if you don't want us to spend anything". "You've only just realised? That's exactly what we are trying to do!" was the reply.
Can you use a credit management company? Mrs 111R used to be a Director of a large company in this area and they chased up invoices but in a diplomatic way, building relationships with copmanies and not by hounding customers. It still seems rare in the SME/smaller business area (she worked with people like Disney/Asda) because many business owners worry that a CM company will p
s off customers. These are obviously the ones that don't their bills and piss them off so go figure! Worth looking into...
s off customers. These are obviously the ones that don't their bills and piss them off so go figure! Worth looking into...wombleh said:
Why do they delay payment as much as possible? In the hope the supplier goes bust or forgets?
Seems like it's just going to confuse their internal accounting and ps off the suppliers
Cashflow. Get money is ASAP and pay out as slowly as possible. Its a bit stupid for most larger businesses as they often have considerable cash reserves anyway.Seems like it's just going to confuse their internal accounting and p
s off the suppliersI listened to a few people who had failed in business before I set up and made a few of golden rules.
Payment for hardware is always payment with order, services are all paid for on a monthly standing order and if we go to a callout you pay the engineer on completion.
It works for hookers and it works for me
Payment for hardware is always payment with order, services are all paid for on a monthly standing order and if we go to a callout you pay the engineer on completion.
It works for hookers and it works for me
wombleh said:
Why do they delay payment as much as possible? In the hope the supplier goes bust or forgets?
Seems like it's just going to confuse their internal accounting and ps off the suppliers
All large companies do it. 120 days is normal and it's all part of business but small companies are squeezed more by banks and usually don't have the cash flow needed for 120 days credit. Seems like it's just going to confuse their internal accounting and p
s off the suppliersAs they are small and don't have the buying power they're on zero credit or 30 days.
We are a small business and our main customer is taking the Michael in paying us on the agreed 60-90 days payment terms. currently our oldest invoice is 142 days.
What worse and not related to this thread, we've heard that there own staff are not getting paid on time and when they do its part pay. Time to bale for us i think but bringing our account up to date is going to be difficult if were not supplying them with goods and service.
I've heard all the excuses, what worse the directors are buying new flash cars and moving in the city centre offices whilst screwing there customer base over.
anyway rant over!
What worse and not related to this thread, we've heard that there own staff are not getting paid on time and when they do its part pay. Time to bale for us i think but bringing our account up to date is going to be difficult if were not supplying them with goods and service.
I've heard all the excuses, what worse the directors are buying new flash cars and moving in the city centre offices whilst screwing there customer base over.
anyway rant over!
GTIR said:
wombleh said:
Why do they delay payment as much as possible? In the hope the supplier goes bust or forgets?
Seems like it's just going to confuse their internal accounting and ps off the suppliers
All large companies do it. 120 days is normal and it's all part of business but small companies are squeezed more by banks and usually don't have the cash flow needed for 120 days credit. Seems like it's just going to confuse their internal accounting and p
s off the suppliersAs they are small and don't have the buying power they're on zero credit or 30 days.
I have to pay on delivery, so therefore they are asked to pay on delivery of stock, until we are big enough to cope with a 60-120 credit terms. Even then I would be very reluctant and only do it to brands I know of and not just a large single entity...
At the risk of over-simplifying, you agree terms in advance.
Whether that's 30 days at x price, or 120 days at more-than-x price, you agree it, you deliver, you invoice, they pay.
My terms are 14 days and I always make it clear - and agree with the client/principal/decision-maker - in advance. If there is a problem with payment of my invoice, I can go back and remind them. I've never had to wait more than a week extra.
If they want 120 days, I charge a higher price. If I can't operate with the impact of an extra 106 days wait, I would investigate part-payment on milestones and/or factoring BEFORE agreeing to the terms.
A bit harsh here perhaps but you should reconsider your business model, financing and/or client if you're unable to operate a business and remain solvent.
Whether that's 30 days at x price, or 120 days at more-than-x price, you agree it, you deliver, you invoice, they pay.
My terms are 14 days and I always make it clear - and agree with the client/principal/decision-maker - in advance. If there is a problem with payment of my invoice, I can go back and remind them. I've never had to wait more than a week extra.
If they want 120 days, I charge a higher price. If I can't operate with the impact of an extra 106 days wait, I would investigate part-payment on milestones and/or factoring BEFORE agreeing to the terms.
A bit harsh here perhaps but you should reconsider your business model, financing and/or client if you're unable to operate a business and remain solvent.
Edited by sideways sid on Thursday 24th July 13:34
sideways sid said:
At the risk of over-simplifying, you agree terms in advance.
Whether that's 30 days at x price, or 120 days at more-than-x price, you agree it, you deliver, you invoice, they pay.
My terms are 14 days and I always make it clear - and agree with the client/principal/decision-maker - in advance. If there is a problem with payment of my invoice, I can go back and remind them. I've never had to wait more than a week extra.
If they want 120 days, I charge a higher price. If I can't operate with the impact of an extra 106 days wait, I would investigate part-payment on milestones and/or factoring BEFORE agreeing to the terms.
A bit harsh here perhaps but you should probably reconsider your business model, financing and/or client if you're unable to operate a business and remain solvent.
My invoice terms are 30 days, larger companies ignore that.Whether that's 30 days at x price, or 120 days at more-than-x price, you agree it, you deliver, you invoice, they pay.
My terms are 14 days and I always make it clear - and agree with the client/principal/decision-maker - in advance. If there is a problem with payment of my invoice, I can go back and remind them. I've never had to wait more than a week extra.
If they want 120 days, I charge a higher price. If I can't operate with the impact of an extra 106 days wait, I would investigate part-payment on milestones and/or factoring BEFORE agreeing to the terms.
A bit harsh here perhaps but you should probably reconsider your business model, financing and/or client if you're unable to operate a business and remain solvent.
I have quite often had to wait 150+ days for payment. This is with regular chasing.
My business model has now changed, I got rid of the staff I employed and went back to operating on my own with some use of sub contractors. I don't do as much work for larger companies unless I know they pay. The worst offenders for me were Lafarge, Mars, Network Rail & British Gypsum.
If you end up using factoring, then can mean no more repeat business.
The past 3 years I have seen companies go from 60-90 days payment of a 30 day invoice to anywhere up to 210+ days.
As for putting it in the invoice, if you put a 60 day invoice in they add that onto the time it takes to pay them. When you are shelling out a large amount on parts where parts accounts are up to 90 days it has an impact.
I don't tend to deal with many big companies, but the ones I do are generally pretty good payers. One has 60 days net terms (mine are 30 days net), I had to agree to their terms before supplying them. This is the main thing that big companies do - using smaller suppliers to prop up their cashflow. Frustrating, but I can live with it, as long as I know when the payment is going to come in.
There are a few small customers who I find are the ones that take the piss with paying - same one's always late time and time again, don't pay until you've reminded them 2 or 3 times.
There are a few small customers who I find are the ones that take the piss with paying - same one's always late time and time again, don't pay until you've reminded them 2 or 3 times.
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