New York publishing house Condé Nast has reportedly come up with a novel solution to the tricky issue of ensuring its contributors get paid on time.
As reported here, the magazine empire behind global titles such as Vogue, Vanity Fair, GQ and Tatler has decided to offer freelance writers an offer they cannot refuse - Condé Nast has very generously offered to pay invoices early, in return for a small reduction in the payment. Must be to cover all of the extra admin involved.
Changes to the way companies calculate the VAT on invoices that are subject to Prompt Payment Discounts could effectively rule them out as a way of encouraging clients to pay early.
Until now, businesses have been allowed to calculate VAT based on the discounted invoice price, and display this on their communications with customers.
If the customer fails to pay in time to benefit from the Prompt Payment Discount, the business has been able to charge the full invoice amount, without having to recalculate the VAT.