I suspect we are all creatures of habit and I was reminded of this when a friend commented on my placing a bottle top in my pocket rather than discarding it as there were no litter bins around. He wondered if this was an age thing. Maybe it is, but it was the way I was bought up.
So is not paying invoices on time a habit? Late payment has certainly become endemic. Many businesses blame the banks for their tight lending policy or the larger corporates for their scandalous policy of changing pre agreed payment days when they certainly wouldn’t allow their customers to do the same to them.
Call us old fashioned but if you agree payment terms, we believe you should stick to them. Particularly in circumstances where the supplier has to pay their suppliers on time or is locked into a long term production cycle. This is particularly highlighted in the farming sector.
Changing habits is what is needed and it is sad that the Government is having to consider legislation to force corporates to change – but who will police the policy?
Both businesses and consumers need to accept the reality of the situation: Businesses use late payment to reduce their borrowing costs and increase their profits but this has far-reaching consequences. Witness the many farmers and associated organisations being put out of business due to the ever-accelerating demand for cheaper products, combined with the ever-decreasing speed of payment from the big retailers.
Cheaper products such as milk. Which brings us back to the bottle top where we started. Just as bad habits can become the norm, good habits – such as putting bottle tops in your pocket rather than littering - can be instilled. If your clients have fallen into the habit of paying you late, we can help both retrieve the money they owe you and instil the habit of timely future payments whilst maintaining friendly working relationships.
One in three new businesses fail due to poor cash flow caused by late payment. We’re here to make sure this doesn’t happen to you. Talk to us on 020 7148 9007.