My least favorite task is making collection calls, but it was again time to do so. Although it took less than an hour, I spent more than a day getting psyched up for this distasteful task. I find that I am quite adept at finding other things to do (which are decidedly more interesting and satisfying) in order to avoid “dialing for dollars.”
My perspective is that it is moral and ethical business behavior to pay all bills by their due date, if not sooner. Therefore, I shouldn’t be put in a position to have to ask people for the money that they freely and readily agreed to pay me for my services. It's moral and ethical business behavior to pay all bills by their due date, if not sooner. Click To Tweet
I have found that my customers fall into four categories:
- Most pay their bills on time, every time. (Thank you!)
- Some generally pay on time, but need an occasional reminder or a resent invoice.
- A few always need a phone call before they pay. (This could be a result of corporate policy or cash-flow issues.)
- A couple can’t or won’t pay what they owe me.
I once worked for a company whose policy was to pay all bills, net forty-five. It wasn’t a cash-flow issue, but a desire to operate off other people’s money. This made it most challenging to engage new vendors and keep existing ones happy; they always wanted to be paid net thirty. Another company I worked for had cash flows issues—sometimes majorly so—and paid almost all bills late, sometimes months late; this was an even more challenging environment.
I have decided to treat my vendors the way I want to be treated: I usually pay bills within twenty-four hours. That requires a bit more cash reserves—and many would call it fiscally foolish—but I call it the right thing to do.
Wordsmith Peter DeHaan is a magazine publisher by day and a writer by night. Check back each week for updated content, and look for his upcoming book, Woodpecker Wars.