A small electrical repair business was approached by a Housing Association to provide a repair for a pressure washer. A verbal agreement was made with no payment terms being discussed or agreed.
The work was successfully completed and the small business submitted an invoice for payment.
No payment terms had been agreed prior to commencement of the work and no payment terms were detailed on the invoice. As a result, payment terms automatically default to 60 days in accordance with the Late Payment of Commercial Debts (Interest) Act 1998.
Four weeks after submission of the invoice, the Housing Association contacted the small business requesting that they settle the invoice by their company credit card.
Unfortunately, the small business did not have the facilities to accept a credit card payment. After waiting a further 4 weeks, the Housing Association advise the small electrical repair business that they were having difficulties in making the payment due to them not being on their Approved Supplier List.
The Housing Association attempted to add the small business to their Approved Supplier List but without success as the small business could not provide the relevant accreditations.
The invoice remained outstanding for 4 months and the small electrical repair business contacted the Small Business Commissioner with their complaint.
A caseworker from the Small Business Commissioner’s team contacted the Housing Association on behalf of the complainant and successfully resolved the dispute and secured payment within 5 working days.
The Commissioner found that there was no intention by the Housing Association to pay late as they had made attempts to settle this invoice as soon as they could. The Housing Association intentions of using a local supplier to complete repair being well intended. However, in doing this they had not followed their own procurement processes which created issues when trying to make payment. Maverick procurement processes being the cause of a significant number of late payment complaints referred to the Commissioner.