Differentiate your Suppliers and Pay them accordingly


249609877_a086312dd3Last week I facilitated a Stakeholder Reputation Management Master Class in Johannesburg. On the 2nd day I always end off the Master class by getting delegates to develop a set of ground rules of engagement with Stakeholders including a list of tips on how to foster better relationships and reputation.

The title of this article is what the one group suggested.

Differentiate your Suppliers and pay them accordingly.

This really made me think, and prompted me to share a very disturbing trend.

I run a one- person consultancy. My cash flow is key to business continuance. Yet, this year I have had spend more time on collecting money than ever before.

This is what is happening:

1. Managers attend courses and events. I advertise events as prepaid. Registration forms are completed and signed and invoices promptly sent out. But that is where it ends. I meet these lovely & dedicated people and work with them. However, now comes the crunch – To get my money.

Sometimes I have to wait up to 9 weeks to get paid. And, I have to deal with unhelpful back office staff.

  • Even worse, the lack of attention is frightening. How can it take 2 weeks for a clerk to inform a secretary that the VAT number she gave the client is wrong and that they need an amended invoice?
  • Even worse, my own Bank sent a senior manager on course and it took them 8 weeks to pay me. Yet, if I go over my overdraft limit by R2 they have the audacity to sms me that same day. Is that fair? In fact, it is 6 months since it happened and I am still angry about it.
  • How on earth does it take 5 days to process a payment? That after they have all the documents and the invoice? It is nothing other than an admittance of poor administration and stalling payments.
  • Recently I even wrote to the Head of Finance on two occasions to get paid. He did not even bother to respond.

2. The new tendency. In order for a manager to attend a once-off event I need to complete supplier database forms that need to be signed off by the Bank, sometimes SARS and often by a Commissioner of Oaths.

Sometimes I am sent these documents after an event – and it can take a day out of my time to comply with all this administration. Billable consulting time.

Who says I want to be an official supplier? Surely there must be a way to fast track certain expenses?

3. Supplier Database Forms ask for your type of business.

Why I don’t know. What difference does it make? If you state that you are a SME or sole proprietor, it makes no difference. In fact, you will probably be paid even later than some of their key clients.

Yet the South African Government wants to assist SME’s. Companies write that they care for their customers and suppliers.

Well, if they did their systems and service surely do not suggest that.

I agree with that group.

Why can they not:

  1. Fast track sole proprietor and SME payments? (Or do they not understand the different problems experienced by different types of businesses?)
  2. Why is there no provision for once-off payments such as event attendance?
  3. Why can managers who attend courses and events, not accept the responsibility for following up the payment of that supplier?
  4. Why can they not respect my payment terms?

Something is clearly wrong with Stakeholder Management in companies and there is no better place than to witness the lack of focus and lip-service than getting your invoice paid.

If companies were really stakeholder management focused, they would pay more attention to their service providers needs and expectations.  As an external service provider who often has already rendered a service, I expect my payment terms to be respected. I expect them to be more sensitive to my needs.

I am not interested in the internal systems and procedures. That’s your problem.

Pay my invoice on time.

It is simple. Differentiate your suppliers and pay them accordingly. Surely it is not that difficult.

Or is it just that Stakeholder Management thinking is just a fad?

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One comment

  1. Roger

    Deon, wholeheartedly agree with your sentiments regarding having to chase payments and “fit into” these companies ways of doing things…

    I do think that part of running a robust business, whatever size, is also (at times and as appropriate) define clearly who one will NOT do business with (especially of previous history indicates).

    Perhaps it is also time for us “small guys” to band together and share our experience – and possibly the details of companies that are “problematic”… perhaps even in a public forum so that there could be consequence for these companies (I know that this could be a risk to business – but may be something worth considering…

    Thanks

    Roger