Getting Paid

It is common in large companies for the payment process to work against the vendor or contractor. This is both a process issue and a culture issue. The process is that payment comes from purchasing, but approval for payment comes from the manager who authorized the work. Your invoice is received, processed, and put on hold waiting for approval. The culture issue is a lack of negative impact on the manager who delays approval. When the company does millions to billions in revenue, the $1,000 invoice is in the noise even though it may be a significant amount to you.

Better companies have a process that issues payment unless the approving manager directs purchasing to withold payment for non performance. This automates the routine instead of the exception. It also builds better relations with vendors and contractors.

With little companies, such an issue is more likely a cash flow concern. Chances are the person who approved the work cuts the check, and may be waiting for funds to be available. This is especially true in hard economic times when the company you have invoiced may in turn be waiting for their invoices to be paid.

Try calling the manager who issued the work orders and ask him to help expedite processing so you can make your payments.

Do you have a clause about late payments? Does this start to accrue an 18% apr on late charges, plus late fees? In which case, you usually only need to remind them that [in a very busnessy form letter] of this fact, and that you [your business entity] may be forced to submit a credit rating update due to the deliquent account status.

But I'd try Oldefar's path first, as it additionally gives you yet another chance to prove a strong relationship with your contact there.

There is no way to tell what's going in this situation until you can actually talk to someone.

The fact that you can't reach anyone in accounts payable could just be a sign that they have a very poor work process, or are extremely understaffed. How many times have you called? Have you tried the head of the accounting department?

On the other hand, Accounts payable could be avoiding returning vendors calls because of cash-flow problems. Are you aware of other vendors experiencing the same problem with this company? It could be that they are putting off payments to those vendors that don't complain.

Have you tried contacting the person you normally work with? It's possible your invoice just got lost in the pile. A prod from your contact could be enough to get it found again.

In the mean time, resend your invoice. Mark it prominently as LATE PAYMENT. Send it registered mail requesting a return receipt.

Dear Mary/Michael,

I am writing to you with the hopes of getting a bit of advice as to what I should do concerning a problem I am having.

However, before you offer this advice, it might be helpful if you fully understood the perplexity of my predicament. To ensure your understanding, you'll have to contact your payroll department and instruct them to withhold your paycheck for an undetermined amount of time. You must further instruct them to disregard any future contact from you asking them to reinstate your pay. Furthermore, you may get a better grasp of this situation if you sent a notice to your mortgage company, and all of your other creditors, for that matter, advising them that you will be unable to make your scheduled payments until some undetermined future time, but assure them that you'll eventually get caught up. I'm sure they'll understand. Then, tell your kids that they will have to go one season, at least, without soccer or dance lessons. And lastly, please tell your spouse that he/she will have to find a second job to make up for the financial deficit you both face.

After you do these things and fully understand the position I am in, will you please let me know what I can do to get your company to pay the invoice I sent to you eons ago?

Thank you very much.