Net Monthly Account and the 25 January 2017 Cheque Run

Large companies which need to pay their suppliers will often do a computerised cheque run round about the 24th to the 26th of the month. If they have received several invoices from a supplier, then they will want to settle them with one big cheque, so they will expect to see a statement from the supplier totalling all invoices sent. At the practical level, the supplier should summarise all invoices sent in December 2016 on a statement which the large company receives on 1 January, which is then settled about today. If you work it out, you will see that an average of 45 days’ credit is being given. The invoice will say “30 days or net monthly account”, but an average time of 40 – 45 days being taken to settle it is normal. Talk with local accountants such as David Porthouse and Co if you would like more advice. We aim to be general-purpose business advisors as well as preparers of accounts and tax returns.