[CityCM]

We currently manage a Google Adwords campaign for one of our clients. Their monthly spend on Google Adwords is approximately £200 and we charge a small commission for managing the campaign for them. Every month, we pay the Google bills and then invoice the client for the amount we pay Google plus our commission and every month we've had no problems. We've billed on 28th of the month and been paid around the 18th of the following month.

However, on 28th July we invoiced the client as normal and come 18th August we had no payment. I queried it with the client and they responded by saying 'we pay net 30 days so you'll get your payment on or around 18th September'. So we accepted that and let it roll. We sent out an invoice on 26th August and today we've been paid July's invoice but not Augusts.

Now, what I don't understand is this 'Net 30 days' business. Every month in the past, we've invoiced on 28th and got paid the following 18th(ish) so why the sudden change?

If anyone can offer any advice that would be really appreciated because at the moment it's as if the client has had a 'free month' because they didn't pay in August and are now a month behind with every payment.

We've been thinking about changing the invoice date to 15th of each month but would like some advice from you guys first.

Thanks

[pandadoodle]

It should be 28 days not 30... also the change is due to them managing cash flow. However if you have a contract in place for when payment is due its down to you to change the payment date not them...

If you got nothing in place I would simply invoice at the start of every month with pay within 28 days on the footer of the invoice

This post has been edited by pandadoodle: 21 September 2011 - 10:25 AM

[Renaissance-Design]

The terms of the invoice are set by you, not the client. It's not even remotely their choice. It's a common tactic for companies to claim that they do their accounts a specific way and thus will need to change dates, especially when dealing with a smaller or greener company. They don't do it with their rent, they don't do it with their rates and they don't do it with their phone and internet providers so don't let them do it with you.

Specify a billing schedule on your invoices - given that you're essentially extending £200 of credit to them every month, it's perfectly fair for you to specify Net 7 or Net 10. If they're late for YOUR due date, you're entitled to charge them a one-off fee (per invoice) and interest at 8% over the Bank of England base rate.

This post has been edited by Renaissance-Design: 21 September 2011 - 10:32 AM

[pandadoodle]

^ Applies if no terms have been set though, deciding to charge 8% above base (I do 10) now when nothing has been agreed before hand could be a way to shock your customer and make them leave.

This all comes back to simple business practices and making sure you have things like this set up in place on T&C print them on the back of your invoices etc.

[CityCM]

Thanks. What I don't get is why they've all of a sudden changed. I actually work on site with the company so get to hear how they do their finances and things. They've always paid the same way and they've always done one BACS run per month which we've been fine with.

On all of our invoices for this specific client, we specify a payment due date which is always 30 days after the invoice date (as an example, the invoice for 28th July was due by 28th August) but we received the BACS payment today (nearly a month late). Now what's confusing is all other invoices that they received in August from the rest of their suppliers were paid today as well because when I queried it they were flicking through a file and I noticed the payment dates.

If we were to invoice them at the beginning of a month (i.e. 1st October), we wouldn't get payment until 18th November because all invoices they receive in October are paid in November.

I think the main problem we have is the lady that does all the finances is stuck in her ways a bit and won't budge for anyone. The amount of times I've been there and they've tried to order things and accounts have been put on stop is unbelievable.

[CityCM]

pandadoodle, on 21 September 2011 - 10:34 AM, said:

^ Applies if no terms have been set though, deciding to charge 8% above base (I do 10) now when nothing has been agreed before hand could be a way to shock your customer and make them leave.

This all comes back to simple business practices and making sure you have things like this set up in place on T&C print them on the back of your invoices etc.

Yes, unfortunately, there is no contract in place (mainly because I started with the company as an employee and the Google Campaign management came from that.

Terms and conditions on the back of invoices sounds like a good plan though. Any idea where I can get some example t&c's?

[pandadoodle]

Simply-docs.co.uk or there maybe something in a freelance pack I been giving out for free, bit busy to search properlly but simply docs you could find something there that should suit your needs anyway

In that case then I would send in a simple reminder to pay invoice on time and or failure to pay would result in a late payment fee being applied to the invoice of 5-10% or more plus a 2% daily charge above base rate until invoice is paid. Taking additional 20+ days after your original 30 days is bang out of order id change 30 days to 28 also.

To get around the above all you have to do is send out a revised copy of your T&Cs to ALL your clients before you implement the charge system! It would be advisable to say that this will take place 28 days in the future or from X date of this Year so it gives all your customers a chance to get ready for the changes. This would also be a good time to alter any of your prices etc if you have not already done so for the cost of living

[CityCM]

Thanks pandadoodle I will have a look.

I just had a thought though. The payment due date of July's invoice was 28th August so do you think it's possible that the client is paying NET 30 days of that date rather than the invoice date?

I'm getting so confused by this and struggling to determine what to do for the best.

[pandadoodle]

CityCM, on 21 September 2011 - 11:28 AM, said:

Thanks pandadoodle I will have a look.

I just had a thought though. The payment due date of July's invoice was 28th August so do you think it's possible that the client is paying NET 30 days of that date rather than the invoice date?

I'm getting so confused by this and struggling to determine what to do for the best.

Its a possibility. Email me a copy of a sample invoice and ill take a look at if you like

However either way I would do a notification to all your customers as mentioned above anyway

[CityCM]

pandadoodle, on 21 September 2011 - 11:32 AM, said:

Its a possibility. Email me a copy of a sample invoice and ill take a look at if you like

However either way I would do a notification to all your customers as mentioned above anyway

Thanks, I will definately do that. We are rebranding anyway as we've just moved into an office and feel the logo's a bit naff so a good time to do an updated terms too.

I've sent you an email with an edited invoice.

Thanks again

[MikeChipshop]

A client does not dictate to you when they pay, you dictate to them!

As Panda said above, and as many people here will do, charge a late fee of a certain amount of interest on all late payments.

Currently my contracts state that all invoices must be paid within 15 days otherwise a 5% charge is added and if still not paid after 30 days a 10% charge is levied on top. Anything over that is legal action which will cost them double plus expenses. Make sure this is all in your original contracts.

The days of HR departments and banks taking 30 days to settle invoices is long gone. The BBC pays up within a week now!