Do you ever invoice before delivery?

[BrabusMog]

Whilst it isn't the biggest deal in the world as we usually pay upon receipt of invoice, I am getting slightly wound up with our biggest supplier at the moment. We ordered goods last Friday, they are due to be delivered tomorrow afternoon and I have just received, by email, the invoice for this delivery which is dated yesterday. Considering I haven't even booked the goods into our system, as I don't have a delivery note to book the stock in, I find it a bit cheeky to get an invoice.

I know I should just move on, and certainly not rant, but I think the missus is going to leave me if I moan about work once more this week! Small business, eh?

So, my rather convoluted ramblings lead me to this question; if you invoice before delivery, why do you do so? Especially as terms on most invoices received are applicable upon receipt of invoice, not receipt of goods.

[Simpo Two]

It is rather brusque unless agreed, but what are the payment terms?

I was once asked to invoice several months in advance, as the client wanted to spend the money then but couldn't proceed with the project until the following year. So I did. Of course when the next year arrived it felt as if I had to do the work for free!

Another time I was asked to send in a £10K invoice in advance, and a month later the project was cancelled, which rather dented my Christmas. Such is the problem with blue chips; if the gestation period of a project is 9 months but the company changes all its plans or shuffles people about every 6 months in the name of progress, nothing starts.

[Disastrous]

To get paid sooner? To deal with the inevitable fking about that occurs (not from you, I mean in general. The "oh can you resend it?" nonsense)?

Most courses I've attended on cashflow management stress the importance of invoicing as quickly as possible in the process - I'd invoice before they'd signed the deal if I could!

Assuming the kit arrives when it should and is satisfactory, I wouldn't worry about it all.

[BrabusMog]

Simpo Two said:

It is rather brusque unless agreed, but what are the payment terms?

I was once asked to invoice several months in advance, as the client wanted to spend the money then but couldn't proceed with the project until the following year. So I did. Of course when the next year arrived it felt as if I had to do the work for free!

Another time I was asked to send in a £10K invoice in advance, and a month later the project was cancelled, which rather dented my Christmas. Such is the problem with blue chips; if the gestation period of a project is 9 months but the company changes all its plans or shuffles people about every 6 months in the name of progress, nothing starts.

Payment terms are 30 days from invoice, but we usually pay straight away as it is budgeted to have at least 2 deliveries a month so the money is already allocated in the accounts. We always invoice in one go to every customer at month end, some pay straight away, others we know not to chase until 90 days, I guess everyone has a different view on how to handle cash flow.

[BrabusMog]

Disastrous said:

To get paid sooner? To deal with the inevitable fking about that occurs (not from you, I mean in general. The "oh can you resend it?" nonsense)?

Most courses I've attended on cashflow management stress the importance of invoicing as quickly as possible in the process - I'd invoice before they'd signed the deal if I could!

Assuming the kit arrives when it should and is satisfactory, I wouldn't worry about it all.

I agree on all points, and I'd invoice weekly if I could but the MD is against it (he's also my dad). I suppose I shouldn't get worried about it, I just find it a bit cheeky but then as we are a big customer for this supplier, I guess they know we will pay before 30 days anyway, so they just send it once the consignment has left their premises (delivered by a third party) so they don't have to remember to do it a day or two later.

[Jockman]

Not really an issue but I understand your annoyance.

If you want to make a point, prepay the Supplier with what you think the future invoice will be. This will completely fk up their system but at least you will make your point.

Or return the invoice for reissuing. This can annoy the hell out of people.

Or you could just redate the invoice as we do

[Disastrous]

BrabusMog said:

Disastrous said:

To get paid sooner? To deal with the inevitable fking about that occurs (not from you, I mean in general. The "oh can you resend it?" nonsense)?

Most courses I've attended on cashflow management stress the importance of invoicing as quickly as possible in the process - I'd invoice before they'd signed the deal if I could!

Assuming the kit arrives when it should and is satisfactory, I wouldn't worry about it all.

I agree on all points, and I'd invoice weekly if I could but the MD is against it (he's also my dad). I suppose I shouldn't get worried about it, I just find it a bit cheeky but then as we are a big customer for this supplier, I guess they know we will pay before 30 days anyway, so they just send it once the consignment has left their premises (delivered by a third party) so they don't have to remember to do it a day or two later.

Then assuming you have a healthy relationship with them, I wouldn't sweat it too much...assuming it's not causing a massive ballache in your systems or anything!

[surveyor]

Different type of work, but with plans that I have drawn, I often will not deliver the final plans unless invoice is settled first.

Works well for me.

If someone get's really awkward they can have a screen print of the finished version, which in itself is not acceptable to Land Registry as it can't be printed out to scale, unlike the pdf.

[C Lee Farquar]

I suspect the secretary is more efficient than the dispatcher.

[johnfm]

You agreed a contract for the purchase of widgets when you agreed spec, price, delivery etc.

At that point you are obliged to pay and he is obliged to deliver the widgets.

Why should the supplier have to wait until delivery unless it was an agreed term?

If it winds you up, just agree invoice on delivery as part of the deal.

[BrabusMog]

johnfm said:

You agreed a contract for the purchase of widgets when you agreed spec, price, delivery etc.

At that point you are obliged to pay and he is obliged to deliver the widgets.

Why should the supplier have to wait until delivery unless it was an agreed term?

If it winds you up, just agree invoice on delivery as part of the deal.

Invoice upon delivery is the agreement.

[FairfieldSteve]

I know Sage posts widgets for invoice as they are dispatched. Invoice is quicker to send than widgets maybe?

[Simpo Two]

johnfm said:

You agreed a contract for the purchase of widgets when you agreed spec, price, delivery etc.

At that point you are obliged to pay and he is obliged to deliver the widgets.

Why should the supplier have to wait until delivery unless it was an agreed term?

If it winds you up, just agree invoice on delivery as part of the deal.

This illustrates the difference between traditional B2B business versus eBay-style C2C. The former typically does the work then sends a 30 day invoice. The latter pays up front. I suppose businesses are thought more trustworthy than eBayers.

[Siscar]

There is nothing wrong with invoicing on despatch, it just shows that they are pretty efficient. The concept that they should put a delay in that waits a couple of days before raising the invoice is just bizarre.

[Engineer1]

Simpo Two said:

This illustrates the difference between traditional B2B business versus eBay-style C2C. The former typically does the work then sends a 30 day invoice. The latter pays up front. I suppose businesses are thought more trustworthy than eBayers.

Or businesses assume that their product will be part of a bigger product so in theory the purchaser may not have the money to pay till they sell some product.

[3200gt]

Siscar said:

There is nothing wrong with invoicing on despatch, it just shows that they are pretty efficient. The concept that they should put a delay in that waits a couple of days before raising the invoice is just bizarre.

Unless the invoice date falls at the end of a month and the delivery date at the start of the following month. Not an issue if the terms are 30 days from invoice date but is the difference between 31 days credit and 60 days credit if the terms are 30 days from end of month as most B2B terms are.

[Dave_ST220]

3200gt said:

Unless the invoice date falls at the end of a month and the delivery date at the start of the following month. Not an issue if the terms are 30 days from invoice date but is the difference between 31 days credit and 60 days credit if the terms are 30 days from end of month as most B2B terms are.

Can't say any business I deal with or have ever dealt with works that way. 30 days from invoice date is the norm. As for the OP I can't see the issue tbh. We invoice on day of dispatch, if it's an onsite project we invoice when completed.

Look at it the other way, they don't have to give you 30 days credit & you say you pay straight away, why not pay on the 30'th day?

[Simpo Two]

Engineer1 said:

Or businesses assume that their product will be part of a bigger product so in theory the purchaser may not have the money to pay till they sell some product.

A cuddly idea but no. Once you can't pay an invoice until you yourself get paid that's a slippery slope IMHO.

[Dave_ST220]

Simpo Two said:

Engineer1 said:

Or businesses assume that their product will be part of a bigger product so in theory the purchaser may not have the money to pay till they sell some product.

A cuddly idea but no. Once you can't pay an invoice until you yourself get paid that's a slippery slope IMHO.

Too right. Had that line pulled on me once, never dealt with them again. If they'd been up front I would have weighed up the risk vs reward. But to pull the line after 30 days credit (actually 60 days as they were 30 days late by the time we contacted them) pissed me off no end.

[3200gt]

Dave_ST220 said:

Can't say any business I deal with or have ever dealt with works that way. 30 days from invoice date is the norm.

Not sure what industry your in but in packaging selling to end users both invoices in for raw materials and invoices out to customers are all 30 EOM at best. The customers who then sell to retailers/supermarkets are lucky if they get better than 90 EOM terms.