Whose payment terms apply?

Forums › Off topic › Whose payment terms apply?

Geektastic

17943 posts

Uber Geek

Trusted

Lifetime subscriber

#183809 30-Oct-2015 17:26

If the business being invoiced and the business invoicing them have different length payment terms, whose win?

1 | 2

8231 posts

Uber Geek

Trusted

2degrees

Lifetime subscriber

#1417227 30-Oct-2015 17:29

The one whose payment terms you accepted when you ordered from them?

iPad Pro 11" + iPhone 15 Pro Max + 2degrees 4tw!

These comments are my own and do not represent the opinions of 2degrees.

Handle9

11394 posts

Uber Geek

Trusted

Lifetime subscriber

#1417228 30-Oct-2015 17:30

IANAL but as with all legal matters - it depends. Was the purchase accepted on the buyers or sellers terms? Was there a battle of the forms with the PO saying one set of terms but the order acceptance saying another?

If there is no paperwork and you have just asked someone to send you an invoice I'd say the sellers terms would prevail but it's very very grey.

Geektastic

17943 posts

Uber Geek

Trusted

Lifetime subscriber

#1417368 30-Oct-2015 21:24

It arises as an academic question. SWMBO contracted for Fonterra for a year and moved on. She got a round robin from Fonterra saying that they were now moving to a regime of paying their bills 61 days after the month of completion.

As she said, it effectively ruled them out as future employers as our cash flow wouldn't stand that wait. Her terms are 28 days.

gzt

17140 posts

Uber Geek

Lifetime subscriber

#1417375 30-Oct-2015 21:52

That's a bit different. Chances are she would sign a standard contracting or supplier agreement with fonterra's terms.

Inphinity

2780 posts

Uber Geek

#1417381 30-Oct-2015 22:07

IANAL, but the advice I have had previously on a similar matter is that the terms agreed in the contract prevail. If no terms are agreed in the contract, the terms of the invoice prevail.

Geektastic

17943 posts

Uber Geek

Trusted

Lifetime subscriber

#1417411 30-Oct-2015 22:38

I will pass that on to her.

I must say, I thought 61 days was a bit off, myself, for a multi million dollar business.

networkn

Networkn
32353 posts

Uber Geek

ID Verified

Trusted

Lifetime subscriber

#1417424 30-Oct-2015 23:32

I've never heard of it, I'd never agree to such a thing.

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

Handle9

11394 posts

Uber Geek

Trusted

Lifetime subscriber

#1417434 30-Oct-2015 23:56

60 day terms are getting more and more common, especially with large corporates in industrial businesses. We pay most of our suppliers on 60 day terms (I work for a very large European corporate). It's an easy way to get better cash flow for the purchaser, especially if the goods are consumed and then in charged for work in progress.

You can not agree but then you don't do business with them.

Edit: nonsense English.

Bung

6488 posts

Uber Geek

Subscriber

#1417435 30-Oct-2015 23:56

Fonterra's terms dated 2011 were for 2 months + 1 day. Their billing on the other hand is summed up by this quote "Time is of the essence in respect of your payment obligations to us."

Telcos probably pull the same asymmetric stunt.

sen8or

1789 posts

Uber Geek

#1417602 31-Oct-2015 11:25

Using your creditors as a bank, cheapest form of business finance there is. So long as creditors accept stretched payment terms and don't cut off supply, take as long as you can to pay them.

tdgeek

29749 posts

Uber Geek

Trusted

Lifetime subscriber

#1417607 31-Oct-2015 11:31

Geektastic: I will pass that on to her.

I must say, I thought 61 days was a bit off, myself, for a multi million dollar business.

Its aids cashflow, but thats a one off gain. Interesting if they have the same terms wth their debtors, those that pay them money. Maybe the big debtors extended payment terms, so they in effect pass it on to preserve the cashflow numbers

afe66

3181 posts

Uber Geek

Lifetime subscriber

#1417754 31-Oct-2015 17:01

My experience is some insurance companies take up to 3 months from when I bill to paying..

A.

Geektastic

17943 posts

Uber Geek

Trusted

Lifetime subscriber

#1417926 31-Oct-2015 23:07

"Fonterra is reviewing its execution of strategy, processes and working practices to ensure the Co-operative remains well-placed to respond in an increasingly volatile and competitive environment.
As part of this, we are aligning our standards and processes globally to maximise operational efficiency and enable us to grow our business to achieve mutual success with our suppliers, and for our shareholders. This includes streamlining our payables process and adopting a single payment term. This will see Fonterra paying for services and products that it acquires 61 days following the end of the month within which the invoice is dated.
This alignment to our payment system takes effect in November.
If you have any questions, please direct them to the vendor submission email address"

k1w1k1d

1526 posts

Uber Geek

#1417989 1-Nov-2015 08:03

So a mechanic gets called out on January 1st to fix a broken down Fonterra tanker.
He invoices Fonterra a few days later.
He gets paid three months later on April 1st.

Not going to do much for his cash flow.

Handsomedan

7294 posts

Uber Geek

ID Verified

Trusted

Subscriber

#1418647 2-Nov-2015 10:53

It's getting more common for large corporates to push their payment terms to X+1 to fall into the next month's accounting...it's also becoming quite common for suppliers pushing for the opposite - 14-30 days, to be paid as soon as possible.

It comes down to who has the most to lose/gain...

In this case, I'd say Fonterra could probably find someone else to do business with...which is cold comfort to you and your wife, who rely on prompt payment to live.

Handsome Dan Has Spoken.
Handsome Dan needs to stop adding three dots to every sentence...

Handsome Dan does not currently have a side hustle as the mascot for Yale

*Gladly accepting donations...

1 | 2