Are we just victims?

The issue of late payments is often characterised as a big vs small issue; namely big companies exploiting the weakness or naivety of small companies and hanging on to cash they should be handing out to their suppliers. I’m wondering though whether this is leading to a bit of victim culture in which us small players feel helpless and unable to affect our position. Is there another way of looking at it and is there something we could all do, with very little effort, to help ourselves?

Now notwithstanding the often punitive terms that are rife in certain industries, these aren’t my beef here though they are cynical to say the least, I’m just looking at getting compliance with the terms of payment that are agreed. I’m also not excusing systemic policies where a company actively pursues a programme of avoiding paying to terms; they deserve all the stick that comes their way.  Big guys are supposed to know how to behave and have responsibility to do so. But their systems, designed for their own benefit of course, are often inflexible and need understanding and compliance from suppliers if they are to deliver what the supplier wants ie: correct payment, on time, as promised.

Lets not assume also that its exclusively a big vs small issue here. Small companies are just as likely to shirk their obligations to pay when the pressures on their business are high, or they are just not very competent. 

Whatever the size ratio, there is stuff we can all do to minimise the chances of the other party hanging onto to money that is rightly ours. Its not rocket science, just requires some understanding and diligence, but once its in place it becomes a habit and in most cases you may end up being respected for your professionalism and have your reputation enhanced.

The experts at MCC have encapsulated a lot of this knowledge into a short email-course of bite-size chunks that you can always find time to read and digest in your hectic day. Sign up and just become better at business rather than a victim.

1. The Importance of Good Credit Control
2. Giving Credit is Optional - how much should you give?
3. Are Your Invoices up to Scratch? - your invoice can help get you paid
4. Best Practice to Get Paid on Time - offering strategies to ensure customers pay you
5. Applying Interest and Compensation to Overdue Invoices - your statutory right
6. What to do if a Customer Goes into Administration
7. How to Spot a Bad Debt Before it Happens

Despite all the things you can do to become a payments expert, if it still doesn’t work you can always get MCC to do it for you, and often at no cost to you. Click here to find out how.

Lessons in Invoicing from the Milkman

For many years, we've had fresh milk delivered to our doorstep at home each morning.  I guess we like the idea that we were helping to keep a tradition going, together with the feeling that we were supporting a local small business.  No doubt the milk comes from farms near Chernobyl and the company is owned by a tax-dodging multinational, but it made us feel good.

I suppose it did all feel a bit antiquated, leaving handwritten messages when we were going away and cheques for payment rolled up and stuck in the top of an empty bottle for the delivery person to collect, so I wasn't surprised when the dairy wrote to us saying that they wanted to move to receiving payment of their invoices by bank transfer.

Unfortunately, when the next invoice arrived, it was obvious that this company hadn't read the My Credit Controllers article on how to design your invoice to get your money in quickly.  The invoice clearly stated that ALL PAYMENTS SHOULD BE BY BANK TRANSFER, but the crucial information was missing - the details of the bank account to which they wanted a remittance made.

Of course, this isn't make or break, it just slows down payment from people who want to pay you and perhaps gives cover to others who want to delay payment as long as possible.  The real clincher , and what unfortunately lost the company a customer, was that the office didn't reply to repeated requests for the bank details.  As the weeks went by, we became more and more embarrassed about the money owing and eventually just cancelled the deliveries and left a cheque for the total outstanding.

So why not learn from the example of my Milkman?  Why make it difficult for your customers to pay you when it's so easy to make it simple?  Have a look at our guide to designing an invoice template and make sure your business is doing everything possible to get paid on time by customers.