Payment delays undermine Supplier Relationships – my personal experience with one Bank

Companies can go bankrupt waiting to be paid. Okay, that can be drastic, but if you are dealing with a gorilla and you are a mouse, chances are you have to march to their drum. Big Buyers make the rules. And sometimes they can use tricks and delay tactics made up by back office minions to delay payments by months. Yes months.
Let me relate a personal story. I am currently dealing with a Bank for a small invoice. The amount is outstanding since end of June. Yes, it’s October.

I will keep the bank anonymous because it is not my intent to bad mouth them but to show how payment terms can be one of the big lies.

Normally clients are required to pay me when work is delivered. That happened in mid-July. My client had received the research and found it to his satisfaction and before he left for his European 3 week vacation, said via email:

Bank: I’ve given the instruction to start the process to pay the invoice, instead of waiting three weeks until I’m back.

Of course nothing happened. So when I pinged him upon his return in mid August, I get this response.

Bank: Just returned from holiday last week, and primarily focused on an important meeting with a client next week but I found the minutes to call to my Admin to double check the payment of your invoice. They told me that the invoice has to be reissued, as it must include:
1) VAT number of our Bank A-39000013
2) VAT / Tax Id number of your company.

Yes, they are quite strict on this formalities and yes, they could have checked this before the vacation period. Sorry for that.

Okay, so hoops to jump through that should have been brought up before. Now I reissue the invoice and again a few weeks go by. I hate to chase money and my client is chasing internally. Finally I get this message:

Bank: I've talked to Admin today. They apologize for the delay, and due to internal procedures they'll make the payment next week at the latest.

Aha, okay, won’t hold my breath. And of course nothing happens. Another email exchange and this:

Bank: Again apologizes for the delay in paying your due invoice. I copy my colleague Cristina, who is on top of this payment and trying to speed up the process, so you can directly liaise with her.

Sure, pass the buck. Now it’s poor Cristina. Man do I feel like a valued relationship! Again more chasing when nothing happens and then the real shocker –

Bank: I’m embarrassed for this one but when everything seemed ready for payment, our Admin came back and said that the document you presented as tax certificate is not valid for tax purposes. In order to process the payment forward, they need a document similar to the attached model. Can you please handle it? Warm regards.

Warm regards. Yeah right. Please handle it. Sure, get right on it. It takes Canadian Revenue anywhere from 6 to 9 weeks to provide that document. Why wasn’t I told they could not make the 100% payment without the tax certification.

I am sure Walmart and GE suppliers know what hoops they must jump through to get paid. Yes big buyers make the rules, but it would be nice to know them in advance.
In this new age of compliance, who knows what new hoops we will have to jump through? Maybe blood samples? Not a pretty thought.  I am sure many of us have customers that put up all kind of walls to delay payment. Sometimes it’s painful to walk away, but obviously when customers put you through this, they don’t value your relationship.

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Voices (2)

  1. David Gustin:

    Hey Peter, I just want paid. Reissuing invoices with late fees is not the issue, they keep putting up compliance requirements never explained from Day 1. cheers, David

  2. Peter Smith:

    Submit a new invoice with 2% a month compound added on for late payment? Of course, you never know in these situations whether it is just a standard practice to delay payment or genuine administrative incompetence!

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