7 day payment terms - invoice overdue already, hwo soon to chase?

[yasockie]

Hi.

I have a client that I have been rather suspicious with from the start.
Typically my end client is a Fortune500 company and in this case it's a consultancy doing a project for a Fortune500 company.
Due to this relative lack of credibility, I negotiated 7 days payment terms. Today is 7 days from my first invoice.
In the morning, I have sent a gentle reminder to the accountant, PM and CEO.
They have acknowledged receiving the invoice last week, I also have deliverables (piece of software) hosted on my server.

How soon should I get more aggressive about the payment?
I imagine that on Friday afternoon, in the middle of the summer, someone might have missed the impending deadline, so I will definitely wait until Monday, but other than trying to get in touch with them, how soon should I start chasing this through other means (a letter from my solicitor, Small Claims Court etc)?
At the moment, the project & development is ongoing, but I think it's rather reasonable that I cut my losses early if they can't even pay the 1st invoice on time?

[northernladuk]

Late payment isn't really breach of contract, certainly not yet.

I would send them a reminder late Monday night and they a mail every day after that and see what happens personally.

Look up the term Dunning...

[Boo]

I have a client that I have been rather suspicious with from the start.
Typically my end client is a Fortune500 company and in this case it's a consultancy doing a project for a Fortune500 company.
Due to this relative lack of credibility, I negotiated 7 days payment terms. Today is 7 days from my first invoice.
In the morning, I have sent a gentle reminder to the accountant, PM and CEO.
They have acknowledged receiving the invoice last week, I also have deliverables (piece of software) hosted on my server.

How soon should I get more aggressive about the payment?
I imagine that on Friday afternoon, in the middle of the summer, someone might have missed the impending deadline, so I will definitely wait until Monday, but other than trying to get in touch with them, how soon should I start chasing this through other means (a letter from my solicitor, Small Claims Court etc)?
At the moment, the project & development is ongoing, but I think it's rather reasonable that I cut my losses early if they can't even pay the 1st invoice on time?

It's up to you, but I am on 30 day terms and monthly invoicing and I have not been at all backward about things, sending reminders and requests to be notified about payment schedules in advance of the 30 days. The first payment was made fairly promptly but I let my chasing of the second payment slip a bit and when I finally got round to asking a few days before the end of the 30 days they shilly-shally'd about whether it's be one week or the next. A quick email explaining that I could not give extended credit terms, copied to their manager in charge of the project I'm working on, put an end to that and I got paid on the earlier payment run.

So my advice is chase it before they're due to pay and get a payment date. If they don't meet that then you need to poke them a bit harder but don't just let things slide - the banks are holding the taps to a thin trickle for UK businesses atm and you won't get paid on time unless you are uppermost in your customer's mind.

But I wouldn't do anything to put the project in jeopardy until I was certain there was something amiss.

Good luck,

Boo

[Scrag Meister]

IMHO I would give them the benefit of the doubt for a week or 2, give them time to get it all in order.

I was rather cautious when I was only given monthly billing and an initial 7 week lead to payment, but every thing has now been moving along just fine for 16 months. Invoice end of first week of each month, paid around the 21st of each month, also means I have some time in hand so when I leave I still recieve an invoice payment mid way through the month I leave and the month after, unless I leave bang on the end of the month.

[Platypus]

IMHO I would give them the benefit of the doubt for a week or 2, give them time to get it all in order.

Yes. Getting you into the system and payments set up means that first payments can often take longer than subsequent ones. I'd wait until Wednesday, so when when they say "oh no, sorry, you're not in the system" there is still time to get you paid by the end of the week.

[SimonMac]

You mention fortune 500, so I assume its a US company, given they would have just had 4th July and its the 1st invoice I would chase today, but certainly not "aggressively"

[Safe Collections]

Hi.

I have a client that I have been rather suspicious with from the start.
Typically my end client is a Fortune500 company and in this case it's a consultancy doing a project for a Fortune500 company.
Due to this relative lack of credibility, I negotiated 7 days payment terms. Today is 7 days from my first invoice.
In the morning, I have sent a gentle reminder to the accountant, PM and CEO.
They have acknowledged receiving the invoice last week, I also have deliverables (piece of software) hosted on my server.

How soon should I get more aggressive about the payment?
I imagine that on Friday afternoon, in the middle of the summer, someone might have missed the impending deadline, so I will definitely wait until Monday, but other than trying to get in touch with them, how soon should I start chasing this through other means (a letter from my solicitor, Small Claims Court etc)?
At the moment, the project & development is ongoing, but I think it's rather reasonable that I cut my losses early if they can't even pay the 1st invoice on time?

If you have negotiated seven day terms and they have been accepted, the onus is on the consultancy firm to comply with your payment terms.

We would definitely agree that sending a friendly reminder is a good start as you need to show the consultancy client that when you say seven day payment, you really do mean 7 days.

It may be a bit early to start getting "aggressive" with your chasing, but if you have doubts about the ability of the consultancy to pay you do need to look to reduce your risk.

As a very general guide if it gets to due date of invoice 4 and invoice 1, 2 & 3 are still unpaid that would be the time to cease supply of services until all your invoices are paid in full.

We always pay our contractor suppliers in seven days or less, it may slightly increase our admin but it is perfectly possible.

Look up the term Dunning...

What is it with you and Dunning?

[northernladuk]

What is it with you and Dunning?

I think it is a pretty sound method to use rather than firing off adhoc communication and then blowing a fuse. Cojak mentioned it awhile ago and I have tried it rather than just going off on one and it worked quite well. Just passing on experience.

Just make sure you look at the wikipiedia definition and NOT the urban dictionary one!

[Safe Collections]

I think it is a pretty sound method to use rather than firing off adhoc communication and then blowing a fuse. Cojak mentioned it awhile ago and I have tried it rather than just going off on one and it worked quite well. Just passing on experience.

We were just kidding

We agree that having a defined set of credit control procedures is a must for any business.

Oh and Dunning is an American term that is not well known here in blighty

Just make sure you look at the wikipiedia definition and NOT the urban dictionary one!

Mistaking the two could lead to some, how shall we say, interesting discussions with the client

[Wanderer]

How soon should I get more aggressive about the payment?

If you are serious about getting paid on time then you start chasing it before it is even due to be paid. Get to know the people in the accounts team and make sure everything is in order and approved ready to be paid on schedule. Keep following it up to make sure there are no problems because they will probably just let it fail rather than pro actively contacting you...