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Creating Invoices dispute with sales rep

When should a sales invoice be issued, sales say only when payment received I disagree

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So our sales rep is arguing with me that we do not need to isse any sales invoices until the client has actually paid. In his opinion there is no obligation to issue the invoice until the customer had paid. However I argue that the invoice should be issued as soon as the customer is under obligation to pay. His response is that they then might choose not to pay, gives me some exapmles of when you only have to pay for something over the counter once you receive the goods (not really relevant as our company is in the services sector). I have tried the approach of when the emails are exchanged and the customer  is happy with being supplied with the service but this does not cut it. I am afraid he is not very open minded and need some strong arguments here. Help!

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By Mr Hankey
03rd Aug 2017 14:21

The sales rep is clearly an idiot. I wouldn't concern myself with his existence and carry on as normal.

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Replying to Mr Hankey:
RLI
By lionofludesch
03rd Aug 2017 15:32

Mr Hankey wrote:

The sales rep is clearly an idiot. I wouldn't concern myself with his existence and carry on as normal.

Harsh but fair.

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Replying to Mr Hankey:
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By The non-boring accountant
09th Aug 2017 21:16

Best response!

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RLI
By lionofludesch
03rd Aug 2017 14:23

[sigh]

Would the sales rep agree that the time of supply of a Mars bar over the counter at your local corner shop is very likely on the same day as you pay for it ?

Tell him to come up with more convincing. Dealing with services, perhaps. As opposed to goods.

Have a look at the tax point rules for services (not goods) for which I might find you a link when I've finished filing these forms at CoHo.

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By WhichTyler
03rd Aug 2017 14:40

What does the contract with the customer say about payment terms?

And most businesses aren't going to pay anything without an invoice in their hand

Some businesses issue proforma invoices and then only supply once it has been paid (and then follow up with a formal VAT invoice)

But yes taking accounting advice from sales reps is always risky...

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Replying to WhichTyler:
RLI
By lionofludesch
03rd Aug 2017 14:42

WhichTyler wrote:

But yes taking accounting advice from sales reps is always risky...

Or any advice at all, really.

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Replying to lionofludesch:
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By WhichTyler
03rd Aug 2017 15:42

Usually see this when they have reached their target for the month and want the sales to count towards the next period.

If they are under target they will be begging you to invoice as soon as the customer has expressed a vague interest

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Replying to WhichTyler:
RLI
By lionofludesch
03rd Aug 2017 15:51

[chuckle]

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Replying to WhichTyler:
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By tom123
03rd Aug 2017 16:50

That is so true..

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Replying to WhichTyler:
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By The non-boring accountant
03rd Aug 2017 16:19

WhichTyler wrote:

What does the contract with the customer say about payment terms?

And most businesses aren't going to pay anything without an invoice in their hand

Some businesses issue proforma invoices and then only supply once it has been paid (and then follow up with a formal VAT invoice)

But yes taking accounting advice from sales reps is always risky...

Well, the payment is on receipt. However some customers pay by instalments.

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Replying to The non-boring accountant:
RLI
By lionofludesch
03rd Aug 2017 17:02

marta.stevens-AT-btinternet.com wrote:

WhichTyler wrote:

What does the contract with the customer say about payment terms?

And most businesses aren't going to pay anything without an invoice in their hand

Some businesses issue proforma invoices and then only supply once it has been paid (and then follow up with a formal VAT invoice)

But yes taking accounting advice from sales reps is always risky...

Well, the payment is on receipt. However some customers pay by instalments.

Payment is on receipt ? They pay, you receive ?

Or, if you mean payment is on receipt of invoice, there's your answer. If they don't receive an invoice, they've no obligation to pay.

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Replying to lionofludesch:
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By The non-boring accountant
09th Aug 2017 21:19

Sorry, I wasn't very clear. The payment is due when the service starts, but the service doesn't start until payment is received. Anyways, now we issue invoices before the payment!

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By Duggimon
03rd Aug 2017 15:32

I, as a customer, will not pay for anything without an invoice. Ergo I will never pay for your services.

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Replying to Duggimon:
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By thestudyman
04th Aug 2017 08:17

Duggimon wrote:

I, as a customer, will not pay for anything without an invoice. Ergo I will never pay for your services.

So you would never buy anything from online? They might provide an order form but unlikely an invoice at checkout.

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By andy.partridge
03rd Aug 2017 15:50

Let me think this over . . .
* Client will not pay unless there is an invoice
* You will not issue an invoice before client has paid
Isn't there is real danger you will run out of money?
The only good to come out of it is the sales rep makes himself redundant.

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By Kim Jong Un's Hair
03rd Aug 2017 17:28

[***] sales reps. All the same.

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By Mike Bath
08th Aug 2017 15:19

There's actually nothing to stop you issuing an invoice for goods/services which have not yet been delivered. Whether or not the customer will pay it is another matter, but that's not the question here. I agree with everyone else - the sales rep's view is utter rubbish and is almost certainly related to how his personal targets are structured.

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By The non-boring accountant
09th Aug 2017 21:16

Thank you everyone. I talked to CEO, they agree with me and, an email went out to everyone (oh I dread the sales rep reaction) we now invoice in advance too.

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Replying to The non-boring accountant:
Hallerud at Easter
By DJKL
10th Aug 2017 09:28

But given you appear to now invoice before the service itself has been supplied to the customer (work done) do remember you will need to adjust for this at period ends within the accounts.

I tend to only invoice once work is complete, I certainly do not often pay for services before services have been provided, invoice or no invoice.

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Replying to DJKL:
Mike Cooper HJS
By mike_uk_1983
10th Aug 2017 10:53

Surely it depends on the contract and service provided. Phone companies and insurance you are invoiced and pay in advance of the full service provided.

It is common in lots of industries. It very useful for cashflow purposes to be able to get your money up front.

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Replying to mike_uk_1983:
Hallerud at Easter
By DJKL
10th Aug 2017 11:36

For prolonged service maybe, however even with phones they tend to be line rentals in advance/calls arrears.

Re insurance I would never pay a full year in advance where there was a significant premium after the scare we had when Independent turned turtle way back in the depths of time. I was so thankful I had set up to pay via Premium Credit/ similar otherwise we could have dropped about £30k. As it was we merely cancelled the monthly payments and sorted insurance with A N Other and told the liquidator to go whistle.

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By Jackie0802
10th Aug 2017 10:34

Does sound rather as though the sales rep is trying to manipulate figures somewhat. We get it sometimes by reps who are much more creative and credible than this guy. They don't usually last long...

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By richardterhorst
10th Aug 2017 11:10

Since when do sales people get involved with accounting decisions. Especially based on legal principles.

Maybe suggest you pay his commission after the YE accounts have been signed. That will shut him up. Idiot!

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By slarti
10th Aug 2017 13:09

Well if I were the customer, I wouldn't pay without an invoice.

None of my customers would pay me without an invoice.

Also, VAT tax point, when the work is done/goods delivered/whatever. Invoice is needed.

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