Letter from the table: Make the 15 days visible where payment decisions are made

To the Cashflow Council

I support the 15-Day Pay Standard. I am writing with a question for the chair: how will we make the standard matter inside the systems that decide when an invoice is paid, not only in the contract or the letter sent to a chief executive?

On 1 June, I sent a $6,240 invoice to a large buyer for completed work. The work had been accepted, and the invoice was received the next day. Our written terms said net 30, with interest of 1.5 per cent per month on overdue amounts. No one disputed the work, the amount, or the paperwork.

Under those terms, payment was due on 1 July. When it had not arrived by 6 July, I followed up with accounts payable. The answer was that the invoice had cleared approval but missed the payment run, and was scheduled for 5 August. I asked whether anything was missing or disputed. Nothing was. I sent the invoice again anyway, because that is often the quickest way to establish that you have done everything you can.

The payment arrived on 7 August, 37 days after the due date. I had drawn $3,200 on my operating line of credit to cover costs while I waited. At the rate on that facility, carrying that amount for 37 days cost roughly $34 in interest. That is not a ruinous sum by itself. But it was money spent because a large buyer’s internal calendar took priority over a small supplier’s cash needs. The hours spent checking, resending and following up were another cost, and they do not appear on the invoice.

I did not send a separate interest bill. The contract allowed interest, but I had to weigh the amount against the risk of making a continuing commercial relationship harder. That calculation is familiar to small businesses: a right that is awkward or costly to exercise can be worth less than it looks on paper.

For this ordinary commercial invoice in Alberta, I could not point to a general 15-day payment rule that solved the problem. The Prompt Payment and Construction Lien Act is directed at construction payment; this was not a construction invoice. In my case, the contract’s net-30 term set the deadline. Even that deadline did not prevent an undisputed invoice from sitting through another payment cycle.

That is why I support the draft’s three parts together: payment within 15 days on an undisputed invoice, automatic interest when payment is late, and publication of payment times. A shorter deadline alone can be ignored. Interest that a supplier must pursue one invoice at a time can become another private negotiation. And without published payment data, a buyer can describe an occasional delay as an exception without anyone being able to see the pattern.

My question is about the Council’s strategy for adoption. Letters to chief executives are important, but the people who configure approval queues and payment runs may never see them. Will the Council ask adopting buyers to translate the standard into operating instructions—for instance, a clear way to record when an invoice is received, whether it is genuinely disputed, and when the 15-day clock ends? Will the published figures show how many undisputed invoices were paid on time, rather than only an average that can hide a long tail of late payments?

I am not asking the Council to turn a practical standard into a complicated audit regime. I am asking that the adoption ask reach the people and systems that control the date money moves. A supplier should not have to discover, by chasing an invoice, that “approved” and “paid” are two different things.

The consultation closes on 24 September. As the Council considers the comments, I hope it will keep the standard simple and be specific about what adoption looks like after a buyer says yes. The most useful test will be whether a small supplier can submit a complete, undisputed invoice and know that the buyer has a firm deadline—not merely a place in the next payment run.