If corporations are "people" too, they should cough up interest when they pay late...

[qikgts]

I've got some customers who are slow to pay. It sucks chasing down money and even though every job I do the customer must approve the payment terms, there are still those that don't give a shit they are paying late.

Over 10 years ago, in the UK they seem to have found a way to help businesses, no matter the size, by passing legislation that grants them the right to bill interest and collections costs to slow paying customers (other businesses) even if it's not in the payment terms.

Could something like this gain traction here in the US? Imagine if businesses had to face this on a daily basis. Would the economy get a shot in the arm if corporations came off their cash quicker?

I would like to see something like this happen here. How bout you?


http://en.wikipedia.org/wiki/Late_Payment_of_Commercial_Debts_(Interest)_Act_19 98


Here's a website with some practical info regarding this...

https://payontime.co.uk/

[Nitro Express]

In the good ol days you just sent two big Italians over to discuss payment options. The money usually came in a few days later.

[ZahZoo]

I would suggest restructuring your bid contracts to include a penalty stipulation for any past due payments.

Make it real simple and clear... Net 30 days pay the normal price. 30-60 days normal price + 15%. 60+ days normal +25%, plus any collection and legal fees.

You may run the risk of losing customers... but if they ain't paying what's the loss. I'm sure once most corporate Accounts Payable folks are aware of the cost implications they will put you on a priority pay schedule. I've seen this before even on very large scale Fortune 10 companies.

[qikgts]

I would suggest restructuring your bid contracts to include a penalty stipulation for any past due payments.

Make it real simple and clear... Net 30 days pay the normal price. 30-60 days normal price + 15%. 60+ days normal +25%, plus any collection and legal fees.

You may run the risk of losing customers... but if they ain't paying what's the loss. I'm sure once most corporate Accounts Payable folks are aware of the cost implications they will put you on a priority pay schedule. I've seen this before even on very large scale Fortune 10 companies.

Funny enough, with the 2 clients I have which are currently past due, I included penalties for late payment on the estimates and the invoices. I thought it may help get them to pay on time. It didn't in these instances. One of the clients is a larger outfit and they may just not care about paying the penalty. Or, they may just pay the original amount sans penalty which in that case, I'd have to collect. On their invoice I listed what the original total was, then I listed the "first" payment penalty plus original amount and then the "second" payment penalty plus the original amount. It seemed like when I submitted the invoice I was going to be paid on time as I got an email back saying they would process the following week but they didn't. The second client may honestly feel that paying late is cheaper than moving his money around. He's a small company (like me) so I can see it being cheaper to pay my fee rather than taking an advance on a credit card or something.

The thing that makes me laugh about both of these companies is that in the terms I give them the "opportunity" to communicate with me to approve their late payment without penalty. Neither of them bothered to call and talk about it. I'm a reasonable guy, all they had to say was, "We fucked up and we're sorry, we'll try and do better next time." I would have let them off...

Dumbasses... Now we get to go where we likely don't want to...

[Seshmeister]

Funny enough, with the 2 clients I have which are currently past due, I included penalties for late payment on the estimates and the invoices. I thought it may help get them to pay on time. It didn't in these instances. One of the clients is a larger outfit and they may just not care about paying the penalty. Or, they may just pay the original amount sans penalty which in that case, I'd have to collect. On their invoice I listed what the original total was, then I listed the "first" payment penalty plus original amount and then the "second" payment penalty plus the original amount. It seemed like when I submitted the invoice I was going to be paid on time as I got an email back saying they would process the following week but they didn't. The second client may honestly feel that paying late is cheaper than moving his money around. He's a small company (like me) so I can see it being cheaper to pay my fee rather than taking an advance on a credit card or something.

The thing that makes me laugh about both of these companies is that in the terms I give them the "opportunity" to communicate with me to approve their late payment without penalty. Neither of them bothered to call and talk about it. I'm a reasonable guy, all they had to say was, "We fucked up and we're sorry, we'll try and do better next time." I would have let them off...

Dumbasses... Now we get to go where we likely don't want to...

Yeah been there done that. Most of the time I'm selling to government so penalty clauses don't work because no one gives a fuck and the thought of going through the process again for the fine just isn't worth it.

The only effective way of doing this I've found over the years is to pay someone else to nag them.

Be annoying but in a nice way.

Some big organisations are just incapable of paying on time because of bureaucracy it's not an avoidance thing. Often it's better not to rock the boat too much.

[qikgts]

Yeah been there done that. Most of the time I'm selling to government so penalty clauses don't work because no one gives a fuck and the thought of going through the process again for the fine just isn't worth it.

The only effective way of doing this I've found over the years is to pay someone else to nag them.

Be annoying but in a nice way.

Some big organisations are just incapable of paying on time because of bureaucracy it's not an avoidance thing. Often it's better not to rock the boat too much.

Very well said. My business is still very new and frankly, I'm still learning how to run it. These are relatively small amounts in the range of $250-$500 and both clients were billed for labor only. My labor. I need to thicken up my skin a bit and try to not feel so attached to my "work product". I take a lot of pride in what I do so I need to get over that or else I'll be carrying this shit around for a while...

I can agree with ya though, and I see how sometimes it's better to just let it go.

Thanks for the personal input. I appreciate it...

[Nitro Express]

Also make sure their accounts payable person gets your bill. A lot of times they don't pay because the person that pays never got your bill. Follow up politely and if they still don't pay you lean into them more. Some people or businesses will pay you quickly and others will take their time.

Also if you want a return favor pay your own bills quickly. We are short plumbers in this area and everyone wonders how come I can get a plumber quick and it's because I pay him as soon as I get the bill. He returns the favor by putting me on the top of his priority list. So it works both ways. Business is all about relationships. Sure in todays environment you have to do written contracts but in the long-run the relationships you make will pay you back many times.

[ZahZoo]

Another option... escalate.

Don't settle with dealing with the lowest person in the chain who answers the phone. Many times they're just operating business as usual and their executives have no clue what issues you are experiencing.

Contact the person who comes knocking to engage your business. Ask for a meeting with their senior executive of finance. Don't settle for anything below a Director level... Present a polite and professional summary of the issues... then ask... what can you do to resolve this?

Odds are really good you'll get results.

[qikgts]

Thanks again for all the different perspectives. Like I noted before I have a lot of lessons to learn and the advice you all have presented is golden. I can tell there is an awful lot of experience in what you have passed along in this thread. I promise it won't fall on deaf ears!!!