EOW Reflections 14/07/2023

Last week I said ‘no conversation is wasted’. This week I learned in conversation that CFOs in Germany are trained to pay invoices from small suppliers ahead of those from bigger firms. Music to my ears.

In the UK many payments professionals are attempting to do the same. Others still prioritise the £30,000 invoice over the one for £300. Here’s the bottom line from my own experience of running a small firm:

I do the job during the week and run the business (the admin including the invoices) at the weekend. Invoices sometimes don’t get to your payment/approvals departments as quickly as I’d like. I try to make sure all the information you need to make the invoice payable is there, but each one of my clients has a different system. If you don’t pay me as agreed I can’t get hold of you at the weekend. If I do get time to chase you during the week that’s time I could be spending improving my products or services, planning, looking for new customers or growing the business. Time is money but it’s also productivity.

If you get the money to me quicker, I have more confidence in the viability of my business and start thinking about investing in recruiting, training, upskilling, creating some of those innovative products I’ve been dreaming about during the wee small hours (instead of worrying about getting paid). If I grow, the local community benefits from jobs and added social value. You benefit too because my business survives. My talent is vital to your success. If you delay paying me and I shut up shop it will cost you to replace me.

Small businesses are increasingly using apps and invoicing/accountancy tools to help speed up invoicing and payments. Payment times have improved dramatically over the last 10 years but there are worrying signs that, in the current economic climate, some bigger firms are offering suppliers longer payment terms and paying later than promised. If your payment practices are deteriorating customers, suppliers and investors worry you’re struggling financially. So here’s the call to all CFOs, your leadership on payments to small businesses will benefit all concerned. #EveryoneBenefits