UK Supplier Invoice


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I run a distribution company. We ordered goods which were delivered and invoiced.
Two months down the line the supplier has come back saying they under charged us and would like to issue another invoice for the difference? Is this correct? What should I tell them?

My understanding is an invoice is legally binding therefore the supplier cannot issue us with a top up invoice.

I need your advice please.
Lee
 
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Fidget

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It's more of a point of law. Generally if a price is offered, accepted and paid, then the transaction is complete. So if that's what's happened, then you're correct to say that the supplier cannot invoice you for an undercharge - which is basically an error on their part. Or at least you're under no obligation to pay the new invoice if the supplier actually issues it.

How you approach it depends on things like what sort of relationship do you want to have with the supplier - are you likely to use them again? Or whether you'd've bought from them had the 'real' price been known. Obviously the amount the undercharge is important as well. So it's that sort of thing.

Your options are really to either agree to pay the undercharge or argue the case that the price offered was accepted and paid and you're not accepting this new extra cost.

I've only experienced this a couple of times, and we've paid the undercharge to maintain good relations with the suppliers.
 
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Thank you very much for your reply. Much appreciated.
In addition to the above I can confirm this supplier is one of our large suppliers for the products we sell and would like to keep a good relationship.

Additional background - Our PO had their "correct" price but they then under charged us.
We then raised subsequent POs with the "new" price which they supplied and invoiced us with that incorrect price. This then resulted in them informing us after 2 months that the price was wrong and needed to raise correct invoices with the correct price!
We had already passed this benefit onto our customers who are not prepared to pay.

I have a meeting with their FD next week and was wondering what grounds I have to dispute the price in this instance? Would it be sensible to ask for a 50:50 risk share?

Thank you very much for all help.
 

Fidget

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Your grounds for dispute are that it's unreasonable for you to take the hit for the their pricing error when you've been ordering from them at that price in good faith.

Legally I think you'd be obliged to at least pay the difference on the original P.O because your original P.O had the correct price, and is the agreement of purchase/sale at that price. A mistake in the invoice that under/over charges you doesn't change the amount that you agreed to pay. Legal routes are always a last resort though.

I can't predict the outcome, but it's good that you've got a meeting with the FD because you'll be able to discuss it and likely come to some sort of arrangement.
 
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