Contractors' Questions: What if my Purchase Order has lapsed?

Contractor’s Question: I have an ongoing consultancy agreement with a large UK IT outfit that includes monthly and quarterly payments. Up until recently, the Purchase Order (PO) relating to my fees was issued/renewed to cover about 6 months of the amounts payable under the agreement. 

My July invoice (plus the current quarterly invoice) could not be issued, as no renewal of the PO took place. But the consultancy agreement is still in place and no action has been taken by the outfit to terminate the agreement. Multiple verbal requests have been made to provide further information and the person I report to verbally confirmed that he'd requested the renewal of the PO as normal. But nothing’s happened; what’s the best way to proceed?

Expert’s Answer: Working without a Purchase Order is rarely a good idea, as many larger organisations rely on payment systems that require both a PO and an invoice to release payment. While it is possible to recover what is owed without one it is generally preferable to secure it in order to remove a readymade excuse to delay or otherwise stall payment.

The good news is that as you are still engaged by the client and they have taken no steps to terminate the contract. So the chances are that this is an administrative slip-up as opposed to a conscious decision to stall payment. If that is the case, then it could be as simple as an internal client wrangle as to which department’s budget will be paying your invoice. If it is, then it is a relatively easy fix that requires nothing more than a little patience and perseverance.

You state that you have already made “multiple verbal requests” and that these haven’t been successful. It is entirely possible that your contact has requested the PO but it is stalled further up the management ladder. So in cases like this, you need to work your way up until you find the person ultimately responsible for the issue of the Purchase Order.

Your first stop, is to speak to your contact and explain the seriousness of the situation to them. Tell them you are concerned by the delay and that you would like to speak to the person it is who they request the PO from. Your aim is to secure these details so you can approach them direct in an effort to resolve the situation as soon as possible.

Once you have these details then give the next person in the chain a call. Again, the aim here is to clarify if they have the authority to issue the PO number you need to get paid. If they don’t, or they are waiting on input from someone else, then repeat the previous step. Secure their contact details and ascertain if they have the authority to issue a PO.

Be sure to repeat this step until you have reached someone with the seniority to release the PO number. In a majority of cases, this will be enough to secure the details you need. If it isn’t, then you have a relatively good indicator that all is not well with this client and you should start taking steps to minimise your risk of non-payment.

Make sure your attendance is documented, either on your timesheets or in your own records and keep a close eye on any upcoming payments. If any payment is missed, then be prepared to terminate the contract in line with your contractual obligations if necessary and start the process of collecting what is owed.

The expert was Adam Home, a debt recovery specialist at Safe Collections.

Friday 31st Aug 2018
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Written by Adam Home

Adam Home is Managing Director of UK & International Debt Recovery Specialists Safe Collections. The company, founded in 1984, has more than three decades of experience in recovering unpaid invoices and contractual arrears anywhere in the world.
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