It is a tricky one. As a supplier we have a few people who will not quite pay on time, or need some sort of nudge to convince them to pay on time, and it is very tempting to chase them in advance of being late - i.e. before the due date. When you do that people get quite annoyed - "Of course we will be paying on time". The annoyance is usually because chasing the payment in advance is seen as untrusting and suggesting the customer will pay late. I can't guarantee that our accounts dept have done this, but it is something we try not to do, and would normally only be someone that we really do not trust to pay on time based on a long history of such. Even so, we would have to expect that sort of reaction.
We don't usually have much of a problem because we do charge the statutory late payment penalties that apply when a business customer pays us late. We usually credit the first time, but this is a fully automated process. People learn that at the very least, if they pay late, they get the hassle (trying to get a late payment credited, etc). So they pay on time, or change to direct debit (and so pay on time). It works well.
One trick we did was send a statement mid month if a payment is due. Not a chasing letter or a call, just a statement, what invoices there are and when due and how much. That seems not to cause annoyance, thankfully. It also helps sort any cases where someone has, for some reason, not seen an invoice.
But as a customer, we pay suppliers on time. We are very careful to pay people on time, even the likes of BT where the payment is a very large amount. We plan cash flow carefully to make sure we never pay late. If ever, by mistake, we pay late, we offer to pay the statutory late payment penalties even if the supplier did not know about them. It would be somewhat hypercritical if we did anything different.
Our friends at BT have, however, started getting a tad annoying of late. Some of the BT accounts are complicated because every single month there are a long list of disputes, and also a list of credits where they have agreed previous disputes and deductions are in fact valid. We advise BT clearly of what we dispute and pay the balance on the due date, not a day later. Some of the BT accounts are not a problem, and paid on time, every month, the full amount.
What has got annoying is BT chasing us asking have we paid an invoice, before it is due. This is when the invoice is not due for a week. We always pay on time, but they still ask, every damn month, on several of the BT accounts. And it is starting to wind me up now!
So, am I right? Is it a taboo to chase people for payment before it is due? It is fair that this annoys me?
FYI we asked BT why, and they said that they need to know when we will pay for their forecasts (cash flow, I assume). As the contract does not require us to provide this, I have told them an hourly rate for any future queries of this nature - we'll see what happens.
Of course, to add to the fun, BT have a odd idea on when payment is due. We have 28 days terms, so an invoice issued on 1st is due on 29th. Oddly they state "due on" not "to arrive by" as we would, but when they chase us for payment like this they say that they are expecting payment by 28th. Thankfully the invoice does not say "28 days" but actually states "due on 29th" so not ambiguous at all, but it does just add to the annoyance.
Ironically, whilst it is normal for 28 days from 1st to be 29th, (1+28=29), when we issue invoices we base payment terms on time as well as date, so an invoice issued 09:00:00 on 1st would be due by 09:00:00 on 29th, if on 28 calendar days terms. However, an invoice issued 00:00:00 on 1st (as most are) would be due on or before 23:59:59 on 28th (and we state the date and time clearly). In practice you have to be more than a day late to get penalties, so that is academic, but amused me how something as simple as this can have ambiguities :-)
Surely it's as simple as:
BT: "Have you paid invoice XXXX?"
You: "If it's not due yet, then no. Good bye."
Indeed, but they can see (looking at their own bank) if we have paid it or not, so why ask, unless they are implying we should have paid it, or perhaps we are not going to pay it in time. It is annoying.Delete
Surely the answer is "I don't know. Can you give me the online banking details for [BT account that you pay the money into], and I'll check?" Return irritating with stupids, basically.Delete
Maybe it's just someone keeping themselves in a job.. No proactive calling of customers = less things to do and more chance of redundancy?ReplyDelete
I remember, many years ago, that we paid BT on the due date by cheque after 3pm. Long time since we paid people by cheque! I had a very stroppy phone call from them that it was too late to bank and so they would charge late payment penalties. I asked what the penalty was for zero days late. He eventually caved in after checking with his manager. How childish of them...ReplyDelete
Barclay card do similar.ReplyDelete
They send an email with a subject of "your bill is due" a week before it's really due and it makes me panic, thinking the transfer has failed!
They obviously want the money in their bank as soon as possible. With this in mind it must be in their favour to pay some employee pittance to chase/remind.. For every 5 that still pays on time there may be 1 that pays early, soley based on that chase.ReplyDelete
Surely though (and I have seen this done in the gun trade) it would be better to offer on the invoice a "reduce payment by x% if paid by (insert date, typical 7-14 days)" option (its important to only advertise this on the invoice though) .
Gives the customer a warm fuzzy feeling of getting an even better deal 'and' gets your cash flow moving... And of course those who can't pay early still get the same deal they agreed too 'and' don't feel they are being chased.
Don't chase, give incentive... The ultimate question is would our most complete and favourite telco ever do this? Sadly I think not
As you say, some may pay sooner for being chased. But I cannot be the only awkward bugger that would get annoyed and make a point of paying by cheque on the due date instead of BACS just to get back at them for being so rude... :-)Delete
I send emails reminding customers that payment is due in 3 days. Generates a flurry of bank transfers. Result!ReplyDelete
Well done for not getting flack for that. Interesting.Delete
I can understand why in the aid of cash flow they may want peoples money now, asap, before its due. I can also understand that having someone on payroll to "remind in advance" may even make business sense (hell if it gets the pennies in quicker..).ReplyDelete
However! I have seen it (at least in the gun trade) where suppliers will have at the bottom of their invoices "deduct x% if paid within the next 7(or 14) days". This not only positively encourages fast payment but also gives the customer a warm happy feeling of an even better deal... oh and you dont piss anyone off either.
dont chase, entice.. (just a shame our most complete favorite telco probably will never listen)
If BT gave a 1% discount for prompt payment I am sure we would pay sooner, even if that was "pay withing 2 days".Delete
Can you identify all their mistakes/frauds within 2 days of getting the invoice, and calculate the amount that you will *actually* pay?Delete
Maybe it's BT giving you some hassle for the hassle you give them. Plus you've now announced it annoys you - will be interesting to see if BT increase these calls :)ReplyDelete
We only give them "hassle" if they don't do their job properly. If the service worked we would be no hassle at all for them. Given that we have offered to charge them to help them with their cash flow forecasts now - it would be fun if they do start hassling again next month.Delete
I will confirm to them taht by calling me they now have ensured that I won't ever ever be paying a single day before due date, so they don't need to call back for their cashflow planning.ReplyDelete
An email is less intrusive than a phone call, so I can see how gr0mits method would work well, assuming they are only sent if no payment has been received. (we pay usually about 4-5 days before due, so that would actually be a service to us, as it would mean we've made an admin mistake and now know about it before the invoice is actually late)ReplyDelete
But phoning you every time? Yes, I can see how it would be annoying and a waste of your [companys] time. Charge 'em or just point blank refuse to answer the question.