Invoicing rules and collection accounts

[guy incognit]

Hi , I'm drawing a blank so where else to ask but here!

A company we deal with has asked that we pay funds into another bank account, with a different name from that on the invoice. I'm told that it's just another associated company and not to worry.

Quite apart from the fraud risk on their side and that someone might come back and say that we did not settle our bill by paying this other company etc. can anyone give me some handle on the vat/revenue side of this? You don't need to show on an invoice what bank account to pay but is there some guidance or requirement? I suppose it's not the revenue's concern vis a vis vat but surelyh they'd like to see the trail from invoicing company to collecting company, or no?

As I said, drawing a blank on this. Think it's ok but thought I'd check.

 

[DB74]

I don't think it's ideal at all although I don't know of any laws which are being broken by either party. Maybe your supplier is having problems with the Revenue (eg - bank a/c could be frozen) and are looking for a loophole to continue trading without actually using their bank a/c.

At the very least I would insist on a monthly statement from the supplier clearly indicating that you do not owe them any money.

Also I would like to see a written request from the supplier on their headed paper officially requesting that you settle their bills by paying a different company.

You could also do a search in the CRO to ensure that there is some form of connection between the 2 companies.

 

[guy incognit]

I don't think it's ideal at all although I don't know of any laws which are being broken by either party. Maybe your supplier is having problems with the Revenue (eg - bank a/c could be frozen) and are looking for a loophole to continue trading without actually using their bank a/c. - I was suspecting that they were trying to squirrel some funds away

At the very least I would insist on a monthly statement from the supplier clearly indicating that you do not owe them any money. yes - do that anyway, but need to pay this cheque first obviously!

Also I would like to see a written request from the supplier on their headed paper officially requesting that you settle their bills by paying a different company. - only have email - will request formal letter -good idea

You could also do a search in the CRO to ensure that there is some form of connection between the 2 companies - have done this - looks ok

 

[mathepac]

... A company we deal with has asked that we pay funds into another bank account, with a different name from that on the invoice. I'm told that it's just another associated company and not to worry. ...

This is a highly dubious practice, IMHO.

If these companies are associated, why can they not just move funds around via some inter-company transfer or a mechanism of their own choosing? Why do they need you to effect these cash-movements if its not questionable?

You are paying an invoice (presumably) inclusive of VAT, how do you know the 'associated company' is VAT-registered?

If the 'associated company' supplies the same products / services, why not order from them directly and keep things simple?

The minimum you will need is a proper credit-note from the original supplier and a fresh invoice from the 'new supplier', even then I'd be reluctant to facilitate them.

 

[guy incognit]

This is a highly dubious practice, IMHO.

If these companies are associated, why can they not just move funds around via some inter-company transfer or a mechanism of their own choosing? Why do they need you to effect these cash-movements if its not questionable?

You are paying an invoice (presumably) inclusive of VAT, how do you know the 'associated company' is VAT-registered?

If the 'associated company' supplies the same products / services, why not order from them directly and keep things simple?

The minimum you will need is a proper credit-note from the original supplier and a fresh invoice from the 'new supplier', even then I'd be reluctant to facilitate them.

I appreciate the concerns and share them but where you say the minimum you 'will need' i think you mean as 'need' a form of comfort as not 'need' in the legal requirement sense there? That's what I'm trying to get to grips with.