“Sorry, the dog ate your invoice”

Thursday, 15 November 2012, 18:03 | Category : General
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It’s not good to look tight – whether you’re always the last one to get the round in at the pub, or a corporate behemoth disrespecting payment terms.

Ian Gotts’ blog about the impact on SMEs of corporates paying bills late struck a nerve. Why is it that on a personal level it’s generally accepted that it’s very poor manners to be stingy with your cash, yet big business gets away with it? Or does it?

Ian posits that corporates who consistently fail to pay their suppliers on time are as culpable as the banks in terms of the impact on the 1 in 3 UK small firms that go bust every year. More than that, they are actually cutting off their proverbial noses, as companies depend on their suppliers for their own businesses to deliver. While the focus in the media has been largely about the banks refusing to extend credit lines and holding on to money allocated for business loans, actually big business should hold up its hands and take some share of responsibility.

As a small business we have noticed that the bigger the client, the more hot we have to be in terms of agreeing payment terms that work for us and chasing up payment as soon as invoices become overdue. Conversely, we always honour invoices received in a timely fashion. We never pay late – if we’ve had the pleasure of buying an associate’s time or commissioned a website or video, we’ve committed to pay on sensible terms that suit both sides – and we respect that.

Since birth, The PR Network has made it our mission to support the independent comms sector by paying promptly – and I believe we have stuck to this. We know we have a reputation to be good to work with, and this is part of the reason why. One of the best ways to curry favour and create loyalty to your company is quite simply to adhere to (or sometimes beat) the payment terms that you agreed with them. It’s not rocket science, but it is certainly good manners.

I think big firms need to develop a sense of personal responsibility around this, as it has an impact on corporate reputation. Talking to other business owners, there is an unpublished list of the worst offenders in terms of late payment. Instead, it seems to be offloaded to the accounts dept who are well versed at wheeling out lame excuses such as: “sorry, you’ve just missed the payment run”, “we can’t find the invoice, please can you resend”, “the dog ate it” etc.

OK, the last may be a joke – but the way many big firms treat the companies in their own ecosystem is also no laughing matter. CFOs and CEOs – we’re looking at you, and you want us to think you’re generous, don’t you?

Nicky

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