Subtle way of telling clients to pay by bank transfer

Buttercake

Most of my clients pay by bank transfer when I invoice them but i have one who only pays by cheque

The problem is they are always late and the excuse is "Invoices are processed, we are waiting for signature", they are a large enough business with over 150 employees so i find it hard to believe their accounts dept when they say this every month.

I want to move them to bank transfer payments to stop all this messing but I dont want to rock the boat either as they could easily find another supplier and have many knocking at their door for business. Is there a subtle approach to say "from x month onwards we are only accepting bank transfer payments?" or just leave it be?

jimmii

Who the hell still uses cheques! Just tell them that you them you no longer take cheques and if they say no then so be it just have to keep on going as you are. If they start sending via transfer the excuse would probably just be the guy who does transfers if off today.

pedroeibar1

I'd not force it, but would mention your preference regularly. The customer is always right (sort of!) Payment by bank tfer will not speed it up. Same excuse will be made, different format - 'we are waiting to have the payments authorised.' Do you know the experience of other suppliers with this buyer?

Buttercake

jimmii wrote: »

Who the hell still uses cheques!

I'm pretty sure that our founding fathers in 1932 added a provision to the constitutions that says "Cheques must be accepted for all eternity"

I dont know any of their other suppliers in my field, they are a hotel and would have plenty, id imagine its the same messing about. It might be wise to leave it be as it is a top account and they do eventually send payment.

Just thought someone might have a softly approach in similar situation.

jimmii

Buttercake wrote: »

I'm pretty sure that our founding fathers in 1932 added a provision to the constitutions that says "Cheques must be accepted for all eternity"

I dont know any of their other suppliers in my field, they are a hotel and would have plenty, id imagine its the same messing about. It might be wise to leave it be as it is a top account and they do eventually send payment.

Just thought someone might have a softly approach in similar situation.

If it is very important then I would be willing to make an exception for them especially as they are paying in the end. Instead of opening with it maybe just pop it into the conversation at some point and see what the response is.

thecommander

As pedroeibar1 above said, the excuse will change from "forgot to post" to "forgot to authorise" or that they're still waiting for sign off from the boss. We deal with a few hotels, and the owners still authorise all payments, so they may not be lying.

Ask, but they don't really have to change if they don't want to. Discounting on prompt payment works for some people, but it says to me that they're over charging to begin with.

hfallada

Would you not just tell them that you are going bank transfers only. Give them a direct debit forms with the next invoice.

thecommander

hfallada wrote: »

Would you not just tell them that you are going bank transfers only. Give them a direct debit forms with the next invoice.

You don't get to dictate to a client how they pay their bill. You can ask, but it doesn't mean they have to listen to you. Also, Direct debit is different thing to paying by bank transfer.

Sounds like a strategy to buy them time paying their bills!

I remember dealing with this when I was invoicing a big Telco in the early 2000's. Cheques would always be late sometimes a month late. It was Worldcom and they were having cashflow problems which I didn't know at the time. There are way more excuses that can be made about late payment when paying by cheque!

pedroeibar1

Very true, El R, I did not want to bring that up. However, the hotel sector has largely been weeded-out, the dogs sold (more likely given away for a song as we will realise in a few years) and those that continue to trade are run by Receivers or those with deep pockets, so a good credit risk.
Generally the worst that they can do is to do a (several large co names) and unilaterally extend their credit terms by another 30 or 60 days.
OP also needs to consider if customer has a centralised payment system/outsourced cash management to a sister co./head office.

FC1

Some companies still have a policy of paying by cheques only. As mentioned above this is a delaying payment tactic. You will here excuses of the post being delayed, the cheque has been lost in the post, waiting on signatures etc. Then when you finally do receive the cheque it will take a further 3/4 days to clear.

My advice would be to contact the person dealing with accounts payable or the financial controller and politely explain your situation. Maybe they could arrange payment for you by transfer. I have worked in one such company who paid only by cheques and I would always be willing to accommodate a suppliers payment requirements provided they were polite to me.

Buttercake

We have an agreement every december that invoices for that month would be paid before Christmas day, I sent an email in October to remind them about it and again in November that if we weren't paid before Christmas that the account would be closed. I was very direct in my emails, they reacted well and did pay before Christmas day.

I guess i'm going to leave them at it, its definitely a delay tactic, i can see that a mile off and it must be the same for the milk supplier and the linen cleaners but its a big account so ill have to put up with it.

Heres hoping the EU introduce some sort of "cheque free" business transaction process, like SEPA.

It might be a while yet, we do love an aul' cheque here in Ireland!

thecommander

Buttercake wrote: »

We have an agreement every december that invoices for that month would be paid before Christmas day, I sent an email in October to remind them about it and again in November that if we weren't paid before Christmas that the account would be closed. I was very direct in my emails, they reacted well and did pay before Christmas day.

I guess i'm going to leave them at it, its definitely a delay tactic, i can see that a mile off and it must be the same for the milk supplier and the linen cleaners but its a big account so ill have to put up with it.

If they're not going to pay you on time, then they're not going to pay you on time. Bank transfer isn't going to sort that.

Buttercake wrote: »

Heres hoping the EU introduce some sort of "cheque free" business transaction process, like SEPA.

There is, it's called SEPA.

ANXIOUS

Would you offer them something like a 0.5% discount to pay by eft? A company I worked for did this.

Buttercake

ANXIOUS wrote: »

Would you offer them something like a 0.5% discount to pay by eft? A company I worked for did this.

I was thinking this but margins are razor tight already and as mentioned, it would work for the first month or 2 then back to normal (Mary/Johnny isnt here to authorise payment etc)

28064212

ANXIOUS wrote: »

Would you offer them something like a 0.5% discount to pay by eft? A company I worked for did this.

Despite the OP, the problem isn't the method of payment. The problem is timely payment. A 0.5% discount "if paid by..." might have some impact

Graham

Rather than making the discount part of the invoice how about offering a retrospective quarterly discount that is subject to minimum order levels and timely settlement.

jimmii

Instead of giving a discount for paying on time you could punish late payments. Some of our suppliers have it written into T&Cs that once an invoice is X amount of time over due it incurs 1% a month interest.

neris

jimmii wrote: »

Who the hell still uses cheques! Just tell them that you them you no longer take cheques and if they say no then so be it just have to keep on going as you are. If they start sending via transfer the excuse would probably just be the guy who does transfers if off today.

We still use cheques to pay from of our Bank of Ireland account coz their online banking is such a pile of ****e and a nightmare

Nuttzz

ANXIOUS wrote: »

Would you offer them something like a 0.5% discount to pay by eft? A company I worked for did this.

we went the other way, any accounts not paid through the bank got a 15 quid admin fee. cant remember when i last lodged a cheque