As an aviation consultancy, we provide specialist, sometimes niche, services to our clients, services that they may find difficult to source elsewhere. Developing trusted, sometimes dependent, relationships can bring immense value to both parties, fostering productivity and mutual benefit. However, trust and relationships can be easily and quickly eroded.
Like most small businesses, I spend time each month monitoring cash flow and regularly following up on late payments. In 11 years of trading, I’ve only experienced full non-payment once (probably a lower hit rate than most). While unpleasant, I’ve largely adopted the Tony Soprano philosophy that such issues are ‘just business.’
Late payment can often be the result of a simple mistake somewhere in the system and is normally fairly easily resolved. But sometimes, it signals bigger issues, and the impact on the supplier-client relationship can be significant.
Since many in corporate life have never run a business, the real effect of non or late payments on their, sometimes critical, supply chain may not always be fully appreciated. For businesses like mine, delayed or non-payment doesn’t just cause frustration; it directly affects cash flow, limits opportunities for growth, and can even threaten survival.
Most late payers are not bad clients, but I’ve learned that consistent delays often signal deeper, sometimes endemic, issues. This article isn’t about ‘outing’ any specific client but to understand some of the root causes by shining a brighter light on an issue that has blighted small businesses for many years and to offer some practical suggestions on how to avoid it.
Here’s five things I’ve come to understand from late paying clients, and how to manage them:
