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Late Payments - Your Experiences?

Discussion in 'General Business Forum:' started by Squiddy, Feb 16, 2013.

?

Have late payments affected you/your company?

  1. Yes, I/we are constantly having to chase payments

    1 vote(s)
    16.7%
  2. Only occasionally

    3 vote(s)
    50.0%
  3. Once

    1 vote(s)
    16.7%
  4. Never

    1 vote(s)
    16.7%
  1. Squiddy

    Squiddy Guest

    I was reading through my latest issue of First Voice the other day, a magazine focused on Small to Medium Enterprises (SME's) in the UK. It has a lot of information on new laws that are being passed, issues that are being faced by local businesses and how to deal with them, amongst a great many other things. There was one noteworthy story that related to a post we have up currently which talks about about a web development company defacing one of their clients websites, so I thought I'd explore the topic a little bit more on DF.
    The story in question is titled "Late Payment: A culture of Contempt" and it relates to a plastering company that collapsed in 2012. They basically got screwed out of £450k by a company that refused to pay them for their services. It also mentions a glazing company that sacrificed 40% of its turnover by refusing to supply the construction giant Balfour Beatty, due to the constant struggle of trying to wrestle their deserved payments from the company.
    The most astonishing piece of the article, however, is the fact (Source: Bacs - Payment Providers) that there is an estimated £36 billion worth of collective debt for SME's in the UK, a result of late payments. That is a lot of fucking money.
    I myself have had only brief issues of clients not paying, and I managed to wrestle the funds out of them after no more than a month or so and it was not for anywhere near the amounts mentioned above. I can only imagine the stress this put onto someone's shoulders - especially if they have other staff to pay, so that they can provide for their families.
    Has anyone here, or their company, suffered from late payments? How do you deal with those matters and what preventative measures do you put in place to avoid these situations?
     
  2. balders

    balders Member

    It happens a lot in the construction industry. I can't say to much because the company I work for had to sign a nondisclosure agreement in order to claw some of the money back.Basically we were sub contracted to provide a service by one company that was ran into the ground after it had accrued a substantial amount of debt, we are taking hundreds of thousands. Its sister company, very slightly different name, carried on trading. This was a massive multi million pound construction company that is still trading. This is why all the construction for the Olympics finished under budget.
     
  3. Levi

    Levi Moderator Staff Member

    had a couple go about a week/week and a half over due date.
    Normally if I haven't been paid by the due date I contact them the next day and check to make sure there hasn't been any issue with payments (knowing that there usually isn't).
    Usually it goes something like "Hi I was just checking my accounts and it would appear that I haven't received payment from you for invoice xyz, can I just get confirmation that the money has been paid so I can follow up with my bank in respect to the missing money" First time might be by email so i have 'written' confirmation over anything they say, it may come in handy :)
    I normally get a response similar to ah sorry completely forgot, will get it in the bank today/asap. Give them another couple of days and then ring up again if it's still not there and mention the fact that my t&c's include a late payment penalty, this seems to get them going faster lol.
    My late payments are usually down to 1 of 2 things, forgetful/unorganised client (we all have them) or waiting on payment from 'their client', which to be fair isn't my issue so why should I have to wait.
    Having said that I'd rather a client says they're waiting on payment from their client and it will be an extra few days than just not tell me.... I even state on my invoice, please let me know of any possible delays as soon as possible because I know that a lot of my clients are working for someone else too...
     
  4. scotty

    scotty Well-Known Member

    Happened quite a bit recently.
    I'm usually pretty relaxed about it.
    Some pay right away, others after 30 days but I've started to ask for 50% up front and the balace on hand over in my terms for new clients.
    Only ever had one fall off the planet on me and they owed me quite a bit.
    You live and learn.
    The construction industry is awful when it comes to getting money.
    My Bro-in-law is a Consultant Civil Engineer and going back years he's had to wait for over six months to be paid as he works for a lot of the bigger companies who seem to think this is okay to do this.
     
  5. Squiddy

    Squiddy Guest

    It's quite ridiculous really. The government should be looking to provide better regulation for this industry. Someone I'm working with at the moment has a brother who's working for a company that builds and sets up log cabins. (expensive ones..!) He had three jobs last year, all of which the clients tried to get out of paying because the company he works with has a sales department who like to intervene and start offering discounts and incentives which they don't follow up on. The result is that the clients then try to get out of paying by saying that they weren't provided with what they asked for. Seems like a difficult industry to work in..! I think I'll stick with building websites and graphic design!
     

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