A client of mine recently had a problem develop with a company they contracted with to perform services. Although my client had billed per their contract, payment had not been received within the terms. No one likes having to call someone for payment that is due, and my client procrastinated before reaching out to this company. Due to the substantial sum, it was affecting her ability to pay her debts, too.
When she finally called their accounting department, she was told that because she emailed her invoice to her contact person, and did not copy a specific person in the accounting department, it was never put into the system for payment.
This person stated that if the contact person receives an invoice, they assume the accounting department has entered it into the system and probably never even opened the email. Nowhere, in any of the discussions or written correspondence/contract is it stated that the accounting department should be copied. As this is the first time my client has contracted for that company, she had no way of knowing this step.
Issues such as this trickle down and cause more problems than most people think about. Along the line others are not being paid, my client must utilize contingency money to keep current with her bills (all businesses need to have a savings for unexpected expenses), and now there is a distrust created between these two parties. Although fixing this particular problem will take a little time, it would be advantageous for both parties to put some policies into place to avoid issues in the future.
Of course, you don’t know what you don’t know, and problems can arise seemingly out of nowhere. The key is to put a stop into place so problems don’t repeat themselves and work to solve any similar issues in the future. Both the contractor and my client should create a checklist of information that supports their policies and practices. The contractor should inform their vendors of any specific requirements on their part and my client needs to be sure she has all the information she needs when she reviews contracts sent to her.
The company holding the contract should:
- Clearly explain any specific procedures which need to be followed by their contractors.
- Create a follow up procedure, so that invoices (or other important paperwork) sent to parties within the company do not fall between the cracks.
- The contact person should be informed of these specific procedures to be sure they are following them and their contractors are informed.
- Has created a checklist of specific information, or items, she needs to know with every contract.
- She will also follow up to obtain answers to any open items from her checklist. This will prevent similar problems in the future.
- She has also learned not to procrastinate when something is not being paid on time!
Things have fallen into place to since this initial incident and my client is prepared for future contracts. Have you had troubles arise and need to set up a system to solve them and keep them from happening again? Set up your procedures now! If you need help, I’m available to help get you going!