A "good" waste & recycling management firm will always pay their client's hauler invoices by or before the payment due date.
This is called a "zero tolerance" late pay policy.
You would very surprised by how "few" firms actually pay their client's invoices on-time on a consistent basis.
A "good" management firm will have their client's hauler invoices sent to them.
They will complete an inventory to make sure all invoices have been received, conduct an "incentive-based" audit (auditor is financially incentivized to find errors) of each invoice to ensure only the correct services and charges appear, and then consolidate all of the hauler invoices into a customized format that will meet the specific needs of their client.
They will then send the consolidated invoice(s) to the client.
The client receives and processes the invoice(s) for payment, and sends the payment to the management firm.
Then the firm pays the haulers.
This is a very thorough and efficient process as long as the haulers are paid on or before the payment due date.
The "good" management firm's invoice management and payment process will run like clockwork due to their robust back-office infrastructure.
So, what happens when the "so-called" management firm does not pay the haulers on-time? You guessed it...
The haulers do not come and empty the waste & recycling containers.
This is called a "stop service" situation.
When a hauler's billing system red flags a company for non-payment, they place a "stop service" status on the company's account.
This means that payment must be received "prior" to servicing the client's locations again.
Can this cause issues? You bet! Waste & recycling containers begin to overflow, the health department just happens to drop by, and before you know it you have locations that have been assessed fines, etc.
This can be an expensive proposition.
Why does this occur? Many "so-called" management firms just lack the resources or back-office infrastructure to get the haulers paid on-time consistently.
In some instances the haulers will accept the late payment for a while, but when they see that the payment is being received late on a regular basis, they will discontinue their leniency and demand on-time payment.
In other cases the "so-called" management firm will mandate that they receive the client's payment prior to paying the haulers.
This philosophy makes sense in theory, but there may be instances when the client's payment is delayed for any number of reasons.
Many times the reasons are beyond the control of the client's accounts payable department.
In these instances, the "so-called" management firm will not pay the haulers until they have received payment from the client (regardless of the reason).
The "good" management firm's priority will be to keep both the client's locations and the haulers happy.
They will have worked out an arrangement with the client to pay the haulers if it so happens that they have not received the client's payment on-time.
In fairness, these arrangements may include the client paying a penalty if their payment is not received within a certain time-frame after the payment is due, but again, the focus of the "good" management firm is to keep both the client's locations and the haulers happy.
This means haulers consistently picking up waste & recycling "without" any "stop service" issues.
Prior to engaging with a management firm, it would be in your best interest to find out if they are flexible in how they handle hauler payment.
If they believe in always paying the haulers on-time, you are on the right track.