PAY UP, PAY UP AND PLAY THE GAME

The Missus is locked into a Kafkaesque procedure with one of her clients. She did some work for them four months ago and they haven't paid. Rather than pay her, they send her endless versions of forms which have to be completed in order to satisfy their labyrinthine procurement procedures. Her Company is her. She's done the work. They've had the benefit. The answer is plain for anyone to see.

She, far more emollient than I would be, gets caught up and frustrated by meeting their requirements. I'd simply send 'em a legal letter with seven days for payment.

Once a client withheld payment of a six figure invoice because a small expenses claim was outside their policy. I discovered this as I was about to run a series of change programme events for their senior managers. I rang the procurement person and politely explained that I would be waiting to start the events (including some of her bosses) until I had her assurance of payment. After a few minutes thought she kindly rang me back with that assurance.

This is not a unique problem. Over the last twenty odd years of being in business I've encountered it myself a few times. Sometimes it has been a great amount of money at stake. Always it has been a great amount of frustration. Once, British Airways owed me a quarter of a million pounds for more than six months. I was extremely lucky that my business could ride that. Many could not.

More recently, my tolerance for such shenanigans is lower. Much lower. Clients who don't pay me on time get sent prompt reminders and then a legal process begins. I refuse to get caught in the trap that most small businesses feel when dealing with big Companies - that you can't afford to upset them. My thought is, if you're not going to pay me. you're not worth having as a client. Moreover if our relationship is to be one of mutual trust and respect then it needs to be honoured at the key test point of payment.

There are some clients who one senses will be difficult. Much as one senses, on a road, certain drivers who will do daft things. Once, sensing this of a very large client, I wrote penalty clauses into their contract and ended up with them paying more non and late payment penalties than they did for the original assignment. There was little joy in this for me. In the end, as they were paying penalties on the penalties, I rang one of their top guys and just wrote a line under it. For all I know it might still have been running. So inept were their processes.

I have very rarely had to threaten legal action. Only a couple of times in more than two decades. Neither progressed far. Both were solved by single legal letters. One procurement man I spoke to on the phone was wise enough not to actually say he would not pay, but hinted to that effect. As the call drew to a close I asked him,

"Do you have a wife and kids?"

"Yes,"

"Will you see them this evening?"

"Yes,"

"When you see your family and you tell them of how you are behaving with me, will you do so with pride?"

There was a silence. "No comment," he said.

"Then I think you know what to do," I said, and put the phone down.

Three days later a cheque arrived.

On the whole procurement people don't want to behave badly. They are as imprisoned in mad systems as the small companies supplying them. Nor do I believe that many big Companies really want to screw the cash flow advantage from tiny suppliers. This would be disastrous for their reputation. The answer really is obvious. Have one procurement system for when you are dealing with Microsoft, General Motors or Halliburton. Have another, radically simpler one for dealing with Joe Bloggs, sole trader, that pays them easily and on time.