We are experiencing an increase in the number of companies trying to interpret their payment terms:

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"It has always been my experience that a payable due on a specific date was paid on time if the check was issued on that date. I have several vendors trying to dishonor discounts because they have not "received" the payment by the due date. In none of these cases do the terms say that they need to "receive" payment by the due date. Generally, are payments made timely when the check is cut on or Monday following a weekend due date?"

 

Bank practice is to value date the day following a holiday, whether it be a weekend or national holiday. According to David Hay, one of our experts whose experience is with banks and very large organizations, "Most companies I know of follow this rule."

However, be careful with credit card payments, utilities, customs and certain other government organizations -- they expect payment on or before the due date, regardless of when that date falls, and they penalize you if payment is late. David adds that as far as e-payments are concerned, banks always use the day after a due date, if the due date falls on a Holiday. He says, "This a global practice."

Specific practice between customers and vendors can be a little looser, depending on what the vendor tolerates.

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