Cash flow, revenue, sales. These are the oxygen for our businesses. They’re not what creates the value, but we’d be unable to create value without them.
Which is why it’s infuriating to see small businesses often left at the mercy of late paying larger customers.
Recent surveys by the Small Business Insights Index and Xero found that half of small businesses operate in the red, and that “on average 30-day invoices [from large to small firms] were paid after 46 days”.
Don’t let a large corporate’s inefficiency or lack of ethics stop you from being firm. And don’t be afraid of losing a client over simply asking them to follow the terms that they’ve already agreed to.
So if their payments are late, have a direct conversation. If need be, stop work until you’re paid. It’s your client being unreasonable, not you. Let your sales or account management team (if you have them) start the conversation rather than your finance dept: it will be more effective and probably less confrontational.
And if you need to escalate, go to the Small Businesses Commissioner‘s office, which explicitly helps small businesses get paid on time.