Hi All,
I am a startup owner and I presented a large customer with a large invoice that he was due to pay about a year ago. The contract stipulates that the invoice needed to be paid (or disputed) within 15 days (after which it is deemed accepted).
After I sent the invoice of about $1.5 Million (yes, it was huge - about 100 times bigger than any invoice we ever sent) we did not receive payment nor did we receive a dispute letter. We waited a bit longer to give the company time - 30 days, 45 days passed. We called the person who signed the contract and I was informed that he had left the company.
We called the accounting department and confirmed that they received the invoice. After several frantic calls, people started not picking up their phones. We continued to send invoices by registered mail with reminders and late fees (as per the contract). There was silence for over a year.
Then we sent an email to the CEO saying that if the invoices were deliberately ignored it was a violation of accounting laws (the company is listed on the stock exchange). Only then did the company reply - they said that they felt they were not obligated to pay the invoices because our services were not "satisfactory". It is total BS and fancy the reasoning a year and a half since the invoice was sent!
The thing is I dont want to start fighting with their big lawyers on the details. I want to keep my argument simple. Regardless of the service (whether satisfactory or unsatisfactory), the invoice had to be disputed OR paid within 15 days. That means it HAD to enter the accounting records in SOME shape or form within 15 days and not doing so is not just a breach of contract, but also a violation of accounting laws since it MUST enter accounts payable.
Can you explain a little more about what I can say to flesh out the "accounting argument" and make it seem more meaty? Isn't it technically accounting fraud? How
*should* the large company have handled it in their accounting?Please advise!
Thanks in advance!