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Getting purchase order is quite a pain when you work with one of the Big Four consulting companies. They give PO number and then when you issue your invoice on

by wdb 5y ago

Getting purchase order is quite a pain when you work with one of the Big Four consulting companies. They give PO number and then when you issue your invoice on that they say it's incorrect, or say they decided the payment period is six months instead of your 14 days. It's a mess

ColinWright 5y ago
Agreed. This submission was simply to show the flow. Making it work is the subject of many articles and books. Broadly, you need to assess where the risks are, and then put mitigations in place. You suspect they won't pay? Make sure the contract states explicitly the PO number, the payment schedule, and the penalty rates. If they don't pay have a clear path to small claims court (or equivalent), or other legal route. Balance that against against the possibility that you'll never get work from them again, and the time you will spend to pursue it. Factor those into the price you quote. Offer a discount for prompt payment. So there are processes to follow to reduce the problems. The main problem is that people assume all will be well, and have no way to deal with the issues that arise. Remember, in human terms, corporations are sociopaths. Defend yourself accordingly.
- Throwawayaerlei 5y ago
  Units of US Federal government can also be "sociopathic" about payments, especially timescales for small, cash flow focused companies. One of those I worked for which did a fair amount of business with them in the 1990s found a discount for payment in 30 days worked wonders.
- wdb 5y ago
  Yeah, we stopped delivering the servers after they didn't pay two invoices over a period of 8 months (€200k+). Which was part of the contract with them that we could if they didn't pay. The quickly paid once they couldn't deliver our service to one of their Fortune 100 customers. Paid all the fees, got payment in advance. These companies only pay when themselves get in trouble with their own customers
  - ColinWright 5y ago
    Yes, when they have what they want they can't find the money to pay outstanding invoices. When they need something more, then the money becomes available. The only recourses are to require payment in advance, or to pursue them through the courts. Risk assessment and Game Theoretic analysis are required when dealing with new business and large companies.

by wdb 5y ago

ColinWright 5y ago

Agreed. This submission was simply to show the flow. Making it work is the subject of many articles and books. Broadly, you need to assess where the risks are, and then put mitigations in place. You suspect they won't pay? Make sure the contract states explicitly the PO number, the payment schedule, and the penalty rates. If they don't pay have a clear path to small claims court (or equivalent), or other legal route. Balance that against against the possibility that you'll never get work from them again, and the time you will spend to pursue it. Factor those into the price you quote. Offer a discount for prompt payment. So there are processes to follow to reduce the problems. The main problem is that people assume all will be well, and have no way to deal with the issues that arise. Remember, in human terms, corporations are sociopaths. Defend yourself accordingly.

Throwawayaerlei 5y ago
Units of US Federal government can also be "sociopathic" about payments, especially timescales for small, cash flow focused companies. One of those I worked for which did a fair amount of business with them in the 1990s found a discount for payment in 30 days worked wonders.
wdb 5y ago
Yeah, we stopped delivering the servers after they didn't pay two invoices over a period of 8 months (€200k+). Which was part of the contract with them that we could if they didn't pay. The quickly paid once they couldn't deliver our service to one of their Fortune 100 customers. Paid all the fees, got payment in advance. These companies only pay when themselves get in trouble with their own customers
- ColinWright 5y ago
  Yes, when they have what they want they can't find the money to pay outstanding invoices. When they need something more, then the money becomes available. The only recourses are to require payment in advance, or to pursue them through the courts. Risk assessment and Game Theoretic analysis are required when dealing with new business and large companies.