What payment timing is normal?
It varies. Public examples include Boulder County, which expects to pay by cheque within 45 days of the end of the month of delivery, and New York's statewide contract, where the revenue share is paid monthly as a credit against the contractor's invoice, and the credit for one month's recycling may be applied to the next month's invoice.
Payment or credit?
When the buyer is also your hauler, the rebate is often a credit against the hauling bill. That is fine if the credit is shown as its own line, with tickets and the index value, and if it can become a payment when the credit exceeds the bill. If your hauling contract is the bigger document, see wastecontracts.com for the service side.
What if a statement is late or wrong?
Set a date by which the statement must arrive, a period in which you can dispute it, and interest on late payments. Disputes should not hold up the undisputed part.
Sample wording
11.1 Payment. Within [20] days after the end of each month Buyer shall deliver a statement under section 10.2 and pay all undisputed amounts by electronic transfer. [Where amounts are credited against Buyer’s invoices, any credit in excess of the invoice shall be paid.]
11.2 Disputes. Seller may dispute a statement within [60] days. Undisputed amounts shall be paid on time.
What to negotiate
- Shorten the payment period.
- Make excess credits payable.
- Pay undisputed amounts while a dispute is open.
Red flags in a draft
Rebates "credited at Buyer’s discretion".No statement deadline.
Questions
- When are recycling rebates paid?
- Usually monthly in arrears, within a set number of days after month end, as a payment or a credit against another invoice.