Who’s your best customer? I know who s/he is. The one who pays on time! Waiting, often not so patiently, for customers to pay you for products delivered or services rendered is one of the hardest aspects of doing business. Many times it is the small entrepreneur who suffers in this way. According to Leo Kits of the organization for small businesses in The Netherlands, “Large companies often have the attitude; come and kiss my feet, and then I will give you an order and pay when it suits me.” He welcomes new EU laws introduced this month which state that governmental offices and businesses must pay their bills within 30 days, longer if this is contractually agreed beforehand and is not disadvantageous to both parties.
Small businesses suffer long delays in payment and are often too afraid to stand on their rights and demand payment, worrying about future orders. This can be disastrous for small businesses who are almost without exception suffering from lack of working capital. Bankruptcy is just around the corner.
I remember John Harvey-Jones, CEO of the chemical giant ICI, giving some essential business advice some years ago, which I have always followed; “Turnover is vanity, profit is sanity but cash is reality!” Getting your payment from customers in good time is a major part of a healthy business. We discuss this regularly in our workshops “Business by the Book,”
According to Jet Cremer, chair of an association of Dutch collection agencies, “Companies are currently owed €4,8 billion by consumers. This is damaging and that’s why the new law is necessary.”
Paying your bills on time gives you a good name with your creditors. And, according to the wise Solomon; “a good name is more precious than gold or silver.” (Proverbs 22:1)