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Underbilling - what to do?

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albert67

Guest
Hello,

Firstly, apologies if this is in the wrong section - couldn't really see an appropriate section here for it.

We are based in the UK, as a registered private business, but our suppliers are based in Florida USA.

The problem is that our suppliers have never invoiced us correctly from the start. We have had to spend hours carefully going over each invoice we receive to make sure that it is correct, and with every month the invoices are getting larger and larger so its becoming a fairly time-consuming process.

Now, until recently, they had been overcharging us just by a small amount here and there. We would go through the bill and correct the items, and send it back to them, and pay what was the full and correct amount.

Now, the last two months, they have been undercharging us quite considerably. Recent bills have been undercharged by over $2000 each month. We don't really know what our legal position is on this.

Business sense tells me that if I am not being invoiced the full amount, then I am not going to pay a penny more than they are invoiceing me for. After all, why should we spend time and effort going over bills each month if the net result is that we end up paying more than they want us to anyway.

So... what I need to know, is what our legal rights are. If we pay the amount they request each month, are they then entitled to come back to us to inform us that they invoiced us incorrectly, and that they now require payment? If so, is there a time limit on how long they are able to reclaim this money? For example, if two years down the line they were to write to us to try and claim several thousand dollars worth of invoices which were previously underbilled, would they have the right even though it is so late after the invoice date?

Currently we are still calculating the correct amount we owe, and are paying the amount they request. The additional amount is being placed in a reserve account which we are not touching in case they request the money, or at least until we know our legal position.

Sorry for the lengthy post, hope someone will be able to help.

Thanks!
 


JETX

Senior Member
Pay them what they invoice and put aside the amount of the underage. That way you will have it if/when they come a 'knockin'.

You might also send them a very nice letter explaining that you believe their billing is not accurate and give them 30 days to submit a correct bill. Be sure to make it very clear that if they do not submit a correct bill within that time, they will lose any rights to amend later (not really legal, but might wake them up).
Also, you might see if you can get them to agree to that, if they sign it, then it would be a legal condition.
 
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albert67

Guest
Pay them what they invoice and put aside the amount of the underage. That way you will have it if/when they come a 'knockin'.
Thanks!

This is what we are doing at the moment, but how long do we keep that up for?

If say a years down the line I'm staring at $30k of money in a reserve account I cannot touch, at what point do they lose a claim to it? Do they ever lose a claim to it? Does anyone know if after 10 years for example, they are still entitled to demand it even tho they never invoiced for it originally?
 
A

albert67

Guest
Yes, I did, I was simply trying to get a hold of our current position.

We have told them many times that their billing system is inaccurate, but if they are going to persist in underbilling, why should we jump up and point it out? Personally I feel a lot more comfortable paying what I'm invoiced and leaving the extra as a security blanket in a reserve account. If they claim it, we have it to pay.

So what I was trying to ascertain with my response was whether without writing such a letter and getting them to sign a document/contract, could they legally claim the uninvoiced funds in a year, five years, ten years time etc?

Sorry if it appeared as though I had not read your post, I most certainly had and I am grateful for your reply.
 

JETX

Senior Member
The SOL (Statute of Limitations) for Florida (the time allowed to legally pursue a debt) is four years if an 'open account' (revolving credit) or five years if a written contract.

So, the SOL in your case would depend on the type of agreement that you have with that vendor.
 

JETX

Senior Member
No problem, cheers mate!

(Oh, and before someone gets upset about my responding to a NON-US post, this one clearly dealt with a US issue - at least on the billing end).
:D
 
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