There´s good news and bad news of winning a big deal from a big company — you won the deal"?¦congratulations, you probably won´t be paid anytime soon.
Experian´s survey of 366,633 companies shows businesses of all size are extending the time taken to pay their invoices. Big companies are the worst offenders, taking on average 80.6 days to pay their suppliers – often smaller businesses.
This isn´t anything new. There are few surprises in this analysis. Except maybe one"?¦the problem is getting worse. Average payment times have lengthened over the last decade. And they aren´t likely to shorten anytime soon. There´s little recourse.
Slow paying customers can cripple and even bankrupt a smaller company. You have to get money flowing through your business is you want to survive. Materials need to be purchased, facilities must be maintained, operations must continue, salaries must be paid.
So what is a small business to do?
According to Richard Lloyd, managing director of Experian’s Business Information Division:
“Companies owe it to their shareholders and employees to ensure that they protect themselves from customers that simply pay late and those that are suffering cash flow problems by checking the payment record of prospects and customers – even if they’ve been customers for years.”
If you have a customer that consistently or suddenly pays slow, investigate them. Ask about their financials, question their intent to pay, ask for information. It´s your right to understand your customer´s intent and ability to pay. You don´t have to be rude and the conversation doesn´t have to be difficult. Just be professional and find out what´s going on. It´s your business.