The Money Your Suppliers Owe You (And You've Never Claimed)

Every article about contracts is about money going out. Prices rising, minimums you did not meet, fees for leaving.

This one is about money coming back — and the reason it almost never does.

If you have a contract with a service level agreement, it very likely contains a remedy clause. The supplier commits to a target: uptime, response time, resolution time, delivery window. Miss it, and you become entitled to a service credit.

In most SMEs that entitlement is never used. Not once, across every supplier, for the entire life of the relationship.

Why credits go unclaimed

The clause is real and the entitlement is real. The problem is that nothing about it happens automatically.

You have to notice. Nobody sends you a notification saying your connectivity dropped below 99.9% last month. The supplier knows, and their systems recorded it. You will find out only if you were watching.

You have to calculate. Credits are usually expressed as a percentage of the monthly fee per unit of failure — a specified percentage per hour of downtime, or per missed response, often with a defined threshold before anything is payable at all. Working out what you are owed requires reading the schedule and doing the arithmetic.

You have to claim, in writing, within a window. This is the part that catches everyone. A typical clause requires a claim within 30 days of the incident, sometimes less. Miss the window and the entitlement expires — not disputed, simply gone.

And you have to be willing to. There is a common reluctance to raise a claim over a few hundred pounds with a supplier you otherwise like. That reluctance is understandable and it is also, in aggregate, expensive.

None of this is a trap. It is simply a clause that requires the customer to act, in a business where nobody has been given the job.

What credits are actually worth

Be realistic here, because the answer moderates the outrage.

Service credits are almost always capped — commonly at a percentage of the monthly fee for the affected service, and frequently they are stated to be the sole and exclusive remedy for the failure. That last phrase matters: accepting the credit may extinguish your right to claim actual losses.

So on a £1,200 monthly connectivity contract with a 25% monthly cap, the most you can recover for a bad month is £300. If that outage cost you a day of trading, the credit does not begin to cover it.

This is precisely why suppliers concede service credits fairly easily in negotiation. They are a bounded, predictable liability, and agreeing to them looks generous while capping exposure. Understanding that is useful in two directions: it tells you not to over-value the clause, and it tells you the negotiation should focus on the cap and the exclusivity wording rather than on the headline percentage.

That said, £300 a month recovered across three suppliers over two years is £21,600. Bounded is not the same as trivial.

Where the credits actually exist

The clauses cluster in a predictable set of contracts:

• Connectivity and telecoms — availability targets, fault response and fix times. The most mature service credit regimes you will encounter, and the ones most worth reading properly.
• Hosting, cloud and SaaS — monthly uptime percentages, usually with tiered credits.
• Managed IT and support — response and resolution times by severity.
• Logistics and couriers — delivery windows and on-time percentages.
• Facilities and maintenance — attendance and rectification times.

If you have a contract in any of those categories and have never claimed anything, it is worth twenty minutes to find out whether you have been leaving money on the table.

The claim window is a deadline nobody tracks

You already track renewal dates. Possibly notice deadlines, and if you have read the indexation and minimum commitment pieces, uplift dates and true-up dates too.

A service credit claim window is a different kind of date entirely. It is not annual and it is not predictable. It starts when something goes wrong, runs for perhaps 30 days, and expires in silence.

That makes it the hardest deadline in a contract to manage, because you cannot put it in a calendar in advance. What you can do is record the window length per contract, so that when an outage happens, the question "how long do we have?" has an immediate answer rather than requiring somebody to find the agreement and read the schedule.

The practical failure looks like this: connectivity goes down for most of a Tuesday. Everyone is busy dealing with the consequences. The following week, things return to normal. Six weeks later somebody wonders whether they could have claimed something, finds the clause, and discovers the window closed a fortnight ago.

What to do about it

Find out whether the clauses exist. Search your five largest service contracts for "service credit", "service level", "SLA", "remedy" and "availability". Many SMEs assume they have SLAs and discover they have targets with no remedy attached — which is worth knowing in itself, because a service level with no consequence is not a commitment, it is an aspiration.

Record three things per contract: the target, the credit formula, and the claim window. That is usually one line each.

Log incidents when they happen, not later. A dated note of what failed and for how long is the entire basis of a claim. Suppliers will generally accept their own monitoring data, but you need to have raised it in time.

Claim without embarrassment. A properly submitted service credit claim is a contractual entitlement, not a complaint. In my experience suppliers respond to them professionally — it is a defined process, their account teams expect it, and it very rarely damages a relationship. What damages relationships is the conversation that happens when a customer has silently accumulated two years of resentment about service quality and never once raised it formally.

What to negotiate at signature

A meaningful cap. The headline credit percentage matters far less than the monthly ceiling. Push on the ceiling.

Remove or qualify "sole and exclusive remedy". At minimum, carve out losses arising from wilful default or repeated failure. This is the single most valuable change in the clause and the one suppliers resist hardest, which tells you something.

Automatic application. Ask for credits to be applied automatically on the next invoice when the supplier's own monitoring shows a breach, rather than on customer claim. Some will agree, particularly larger providers with mature reporting. It removes the entire problem described in this article.

A longer claim window. Thirty days is common; sixty is not unreasonable to ask for and costs the supplier almost nothing.

A right to terminate on repeated failure. More valuable than any credit. If the supplier misses the target in three consecutive months, you get a termination right without penalty — which connects directly to whether you can actually leave a contract when a supplier stops performing.

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The short version: service credits are real money you are contractually owed, capped low enough that suppliers concede them easily, and lost almost universally because the claim window expires while everyone is busy dealing with the failure itself. Record the target, the formula and the window for every service contract you hold. The first claim is the hard one.

Timemy keeps service level terms and claim windows alongside renewal and notice dates, so the answer to "how long do we have to claim?" is already recorded when you need it. See how contract tracking works.