It really does ‘pay to be prompt’ when it comes to paying invoices. Small firms lose sleep about when they’ll get paid, how they’ll finance the next contract if they don’t get paid fast for the last one and how they’ll pay the bills. Losing sleep leads to poor and deteriorating mental health, household money worries, relationship breakdown and even, in some cases, losing a home. None of us wants this to happen to those we have built up good working relationships with along our supply chains.
For big business, paying late means discovering the supplier you’ve worked with and trusted has gone out of business, leaving you to find another supplier of those goods or skills you need. That costs you time and money. Let’s keep the supply chains intact, especially at this time when opening up fully is a real possibility and skills and available employees are in short supply.
We need to get the money that’s owed on invoices circulating in the economy. The Prompt Payment Code can help, and the team at the Office of the Small Business Commissioner can help and support you to be a Prompt Payment Code signatory.
Signalling to bigger firms you’d like to work with that you pay promptly and keep supply chains from fraying is good for businesses of any size. And why wouldn’t you, in turn, want to signal to smaller firms that they can trust you to pay them promptly? This makes it more attractive for them to bring you the skills, expertise and goods and services your customers want from you.
Some claim that big firms deliberately delay payment. I don’t accept this in all cases. Some do use excuses such as lack of information or mistakes on invoices to keep delaying payments. Some do force smaller suppliers to accept long payment terms or forego the contract and the work. Most however, want to pay suppliers on time but have poor payment processes in place, often due to legacy systems, or financial controllers who believe in keeping a tight rein on the company’s cash.
At board level many directors, and probably even CEOs, don’t realise their payment practices are poor. Let us help you do the right thing and get your systems fit for purpose and get you signed up. I believe people do genuinely want to do the right thing but sometimes don’t realise they’re doing the wrong thing. If you are deliberately doing the wrong thing then I want to talk to your board.