What does 'Invoiced monthly in advance' mean?

What does 'Invoiced monthly in advance' mean?

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Hello

I am sorry to bother you with such a trivial question but can someone clarify for me please what 'invoiced in advance' actually means. We signed a contract with waste collection company several months ago. According to the contract we are to be 'invoiced monthly in advance' and credit terms will be 14 days from the date of the invoice.  My understanding was that an invoice would be issued on the first day of each month in which services are due to be carried out. e.g Invoice dated on 01/04/16 should be covering April bin collections and paid on 15/04.  The waste collector, however, keeps invoicing us 1 month prior monthly service commences.  The latest invoice received from them dated 01/04 covers the whole May period.  They are also expecting to receive a payment from us by15/04.  My communications with their billing/customer service departments are going nowhere. They are threatening us to suspend their service if they do not get paid on time which is at least 6 weeks before monthly service is actually provided. 

I'd be very grateful for your time and a piece of advice

Thank you in advance(!)

Olga

Replies (19)

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By marks
09th Apr 2016 23:54

my intrepretation

My interpretation of monthly in advance is you are invoiced at the start of the month for the service to be provided in that month.

Surely if they invoice on 1st April and require paid on 15th April for the services in May then payment isnt 6 weeks before but on average 4 weeks before assuming the service is provided evenly over the month.

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Replying to Duggimon:
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By AOB68
12th Apr 2016 16:01

invoicing

marks wrote:

My interpretation of monthly in advance is you are invoiced at the start of the month for the service to be provided in that month.

Surely if they invoice on 1st April and require paid on 15th April for the services in May then payment isnt 6 weeks before but on average 4 weeks before assuming the service is provided evenly over the month.

This is exactly how I thought we should be invoiced, at the beginning of each month for the service to be provided in that month.
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RLI
By lionofludesch
10th Apr 2016 09:43

6 weeks ?

Between two and six, surely.

I agree with you but you probably need to dip into the nitty gritty of the t&cs and decide whether you want to deal with these people or someone else.

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By johngroganjga
10th Apr 2016 09:51

"Monthly" is the billing interval, which seems to be uncontroversial.

"In advance" means before (i.e. not during or after) the period during which the service is provided, but does not specify how far in advance.

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By bernard michael
10th Apr 2016 11:23

Whatverer the definition you

It's almost incidental as whatever the definition you'll have to comply or lose their service

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By petersaxton
10th Apr 2016 12:02

"In advance"

They could invoice you today for the next 100 years.

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By Yonder Dave
10th Apr 2016 12:15

“Invoiced in advance”

is normal for services, although for waste collection in my area the main providers, Biffa/Sita/Hills, invoice at the end of the month for the number of bin “lifts” for that months. For hazardous waste there may be a separate licence fee paid annually in advance.

A good example of invoices for periods in advance is for telephone and broadband services, where the invoice might be split between rental charged in advance for the following month and calls, usage, etc. billed in arrears. Similarly rental invoices can be monthly, quarterly or even annually in advance and, if for premises, invoices can include services (electricity, broadband, etc.) paid in arrears when the usage is known. All maintenance/service contracts for things like alarms, website hosting, etc.are paid in advance.

There is no problem paying an invoice for services in advance, as long as you are sure you will receive the service you are paying for, and the only thing to remember is to include these charges in the calculation of prepayments at year end (and reverse them in the following year). So if, for example, your year end is 31st March the invoice dated 1st March for the April service will be included in the prepayments.

As lionofludesch points out you are actually paying 2 weeks in advance of the month you are paying for.

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Replying to Paul Crowley:
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By AOB68
12th Apr 2016 14:10

I agree that there is no problem paying for good services in advance. However, they keep changing collection day, missing collection...It's a nightmare and take so much of our time.

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Stepurhan
By stepurhan
10th Apr 2016 21:17

Legal question

If you aren't sure of the terms yourself, you might need to get a solicitor involved.

If they do suspend service, then they might end up shooting themselves in the foot if they are not careful. If you paid on 15th March for the April service, and they suspend because you don't pay 15th April for the May service, they might stop the service for a period that you have already paid for.

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Replying to Tax Dragon:
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By AOB68
12th Apr 2016 14:32

They are threatening us to suspend the service if we do not pay in time.  However, they have recently charged us twice for the same period and took money from our bank account. I had to contact them as we were not aware of any 'additional charges' as they failed to send us an invoice prior DD payment.  They admitted that the invoice was issued in error and emailed a credit note. No refund has been offered. I had to cancel Direct Debit.  Thank you for your comment

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Replying to Tornado:
By petersaxton
12th Apr 2016 14:40

Paid in time

AOB68 wrote:

They are threatening us to suspend the service if we do not pay in time.  However, they have recently charged us twice for the same period and took money from our bank account. I had to contact them as we were not aware of any 'additional charges' as they failed to send us an invoice prior DD payment.  They admitted that the invoice was issued in error and emailed a credit note. No refund has been offered. I had to cancel Direct Debit.  Thank you for your comment

If you had paid an invoice twice then you will have paid in time wont you?

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Replying to jm07740:
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By AOB68
12th Apr 2016 14:56

paid in time

petersaxton wrote:

AOB68 wrote:

They are threatening us to suspend the service if we do not pay in time.  However, they have recently charged us twice for the same period and took money from our bank account. I had to contact them as we were not aware of any 'additional charges' as they failed to send us an invoice prior DD payment.  They admitted that the invoice was issued in error and emailed a credit note. No refund has been offered. I had to cancel Direct Debit.  Thank you for your comment

If you had paid an invoice twice then you will have paid in time wont you?

That's right. We have paid in time for services that due to be carried out next month and for the service provided and paid few months ago!
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By paulwakefield1
11th Apr 2016 08:27

I long ago

came to the conclusion that, of all suppliers, waste/pest control/cleaning businesses need closer monitoring of their invoices than any others.

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Replying to Paul Crowley:
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By Yonder Dave
11th Apr 2016 08:54

Good points

stepurhan wrote:

If you aren't sure of the terms yourself, you might need to get a solicitor involved.

Surely simpler to find an alternative supplier. They're all desperate for new customers.

paulwakefield1 wrote:

came to the conclusion that, of all suppliers, waste/pest control/cleaning businesses need closer monitoring of their invoices than any others.

Especially as many insist on payment by DD.

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Replying to Paul Crowley:
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By AOB68
12th Apr 2016 14:35

totally agreed

paulwakefield1 wrote:

came to the conclusion that, of all suppliers, waste/pest control/cleaning businesses need closer monitoring of their invoices than any others.

Cannot agree more with you. Absolutely!

 

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RLI
By lionofludesch
11th Apr 2016 09:12

Changed

I've changed suppliers in the past, where I didn't like the terms. Sometimes it costs more and you have to weigh that against the service you get.

With whom you trade is always your decision.

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Replying to Tax Dragon:
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By AOB68
12th Apr 2016 14:46

changed impossible

lionofludesch wrote:

I've changed suppliers in the past, where I didn't like the terms. Sometimes it costs more and you have to weigh that against the service you get.

With whom you trade is always your decision.

If it was easy to change supplier.. Our existing contract should expire at the end of this year. If we terminate the contract before we will have to pay substantial early exit fees 
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By AOB68
12th Apr 2016 16:17

more accurate wording in the contract?

Do you think the wording in the contract should be more accurate? such as ' invoiced monthly in advance prior service commencement? 

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By Yonder Dave
12th Apr 2016 18:07

This is not an accounting problem

and seems to be a purchasing issue and should be resolved by whoever agreed to the contract.

AOB68 wrote:

marks wrote:

My interpretation of monthly in advance is you are invoiced at the start of the month for the service to be provided in that month.

 

This is exactly how I thought we should be invoiced, at the beginning of each month for the service to be provided in that month.

The problem then is you are then not paying a month in advance, you will be paying half way through the month. It seems this supplier is trying to time the invoices so the payment is received in advance of the month of service, i.e. before the first of each month. A common situation. From what you have said they should be invoicing about 17th of each month with notice of DD 10 working days later. (10 days written notice used to be part of the conditions for DD's, unless the banks have changed that.)

Personally, I would cancel the DD and tell them to sling their hook. If they start on about breaking the contract you can point out they have already broken it by charging twice for the same period and then taking money fraudulently.

On the other hand, I know the recognised national suppliers do not act like this and if it is a local supplier who has undercut the big operators it is a case of you get what you pay for I’m afraid, but a little bit of hassle might be worth the savings.

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