I hope all these suppliers will be charging statutory late payment fees - while the fixed charge (£40 - £100 depending on value of invoice) is nothing to Lloyds, the interest at 8.5% for ~£30m of invoices being paid say 2 months late is £419k...
Lloyds supplier payments TITSUP: What, you want money from a bank?
Lloyds Banking Group’s (LBG) failure to settle debts with some tech suppliers over the past few months has reached “crisis” point, and could have dire consequence for smaller players, sources tell us. The High Street lender recently automated its payment processing system and brought it back on-shore with the intent of …
COMMENTS
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Saturday 17th January 2015 00:24 GMT auburnman
And you expect them to pay that? They wont. What's that? You'll take them to court if they don't? I hope you sent your invoices recorded delivery and had an independent witness verify the invoices were correct in the format you sent, because if you can't prove when you sent correct invoices you can't prove they were paid late. I would love if this was not the case, but reality isn't so kind.
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Friday 16th January 2015 10:11 GMT Lee D
You can be sure, if that was the other way around, you'd have bailiffs and court representatives hounding you left, right and centre by now.
You're a bank. You know what needs paying. You press a button and it gets paid. Pay it from your contingencies while you fix the system. And if you're still paying TWO MONTH OLD invoices, then you're probably in breach of contract, technically, depending on what the invoice allowed for payment. Those people can easily come back in, take back their goods/services at any point, and still bill you for their hassle. Like YOU would if it were the other way around.
I understand a day, a week, of hassle. But it costs nothing above normal costs to get people to drop other tasks until you've paid your debts off, even if you have to do it manually and from some other fund for the moment.
At some point, we're going to have to treat banks like banks treat us. By now, in that situation, I'd be on nearly 1.5x the original debt with fees, hassles, etc, with a permanent credit history mark against my name, and I'd never get credit from those people again and they'd be demanding money up-front on all future projects.
There's a reason I avoid giving any bank a single penny more than I have to, or leaving a penny more in my current account (don't have a savings account, for them to play games with and then give me below-inflation increases back after several years of my not touching it) for a second longer than necessary.
Remember when I went a tenner over and you charged me £50 for the privilege? Let's multiply that up. The only way I could get my own back was to waste an hour of a bank manager's time (which probably costs about the same, I estimated) and then tell him why I'd done that. He said that it wasn't "very productive". I agreed entirely. Charging your customers five times their debt for a day "borrowing" £10 that they never asked to borrow (I'd have been happier for the payment to be refused!) is no more productive than me having to waste your time either.
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Friday 16th January 2015 10:26 GMT Anonymous Coward
Recursion
I used to work in Lloyds IT, what probably happened is that they have onshored the project and then outsourced it to third party supplier (that's what normally happened as they got ride of loads of IT staff).
Irony of irony is that the third parties invoice is probably also not being paid :)
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Friday 16th January 2015 12:52 GMT Alan Brown
Re: Suppliers....
The only items the bailiffs need to seize to cripple a bank branch are the comms devices connecting it to head office and they should be directed that way.
Completely shutting down a branch is an extremely fast way of getting action, especially if the busiest one in the area is targetted.
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Friday 16th January 2015 10:51 GMT LucreLout
CxO's - Are you paying attention?!
Crippled systems, bad PR, lost customers, higher supplier pricing.... this is what comes from offshoring complicated tasks which you're not equipped to understand. IT costs money because doing it properly requires educated/trained people with a lot of experience - it isn't supposed to be cheap. Graduates are cheap, much like offshorians, because they haven't learned how to do the job properly yet (sorry graddies, you'll understand and agree with me later).
Lets simplify your organisation. There are two types of role within it. Talking jobs, and doing jobs. Almost universally the talking jobs leech away bigger bonuses and pay packets than the doing jobs. The doing jobs are those people that sit at a compiler, or are hands on with your server farm etc - Strategising is not doing. When you need to cut costs, cut from the talking layer, not the doing layer. You'll get more done with less noise.
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Friday 16th January 2015 11:53 GMT John 98
The bankrupcy option
I believe any creditor of a plc can, after 28 days, have the company declared bankrupt. I know a guy did it to Rolls Royce in the 70s. The magistrates gave RR a 24 hour stay on condition the MD appeared in person first thing the next morning to grovel (and pay - cash).
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Friday 16th January 2015 13:29 GMT paulf
Re: The bankrupcy option
Winding up* a company that owes you more than £750
https://www.gov.uk/wind-up-a-company-that-owes-you-money
*Having it closed down and liquidated; not calling them and asking to speak to Amanda Hugnkiss
Bankrupt an individual who owes more than £750
https://www.gov.uk/apply-to-bankrupt-someone/overview
Limit to be raised from £750 to £3000
http://www.ft.com/cms/s/0/edd768ae-9cb9-11e4-971b-00144feabdc0.html#axzz3OzTn7Ywj
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Friday 16th January 2015 14:19 GMT Alan Brown
Re: The bankrupcy option
The really fun one is for the creditor to "go on holiday" incommunicado when the litigation hits court. The more remote a location, the better
This leaves the company expensively scrambling to find him/her and get approval for any settlements in order to stave off mandatory bankruptcy.
It has been done in the past and is regarded as the equivalent of a missile over the bows.
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Monday 19th January 2015 05:10 GMT LateNightLarry
kick some @$$...
Maybe the managing director should be invited to spend some time in the iron bar hotel until ALL the payments are caught up and current... plus an extra 30 days to ensure he understands that bills must be paid on time...
Time for a glass of cabernet... it's wine o'clock somewhere.