I remember a successful businessman I know telling me he didn’t pay his bills until the very last minute and sometimes not until the other business was asking. However, he expected his customers to pay his bills on time.
That didn’t add up to me.
How can you expect someone else to do what you won’t do yourself?
Bear in mind this guy is very successful but that just didn’t feel right to me. At the time I was struggling to pay my bills on time due to the way I invoiced, 20th of the month following. That was wrecking my cash flow and in some ways it still does today. It’s the dumbest idea for cash flow ever and yet most businesses do it. Plus, if you’ve got a customer that’s more than 15% of your business you’re in debt every month while you wait for that invoice to be paid. Stupid.
I still remember the day I was able to pay all my invoices on the 20th of the month. Like paying myself more than my Studio Manager it was awesome!
The feeling of not owing anyone money is a feeling that is hard to beat if you own a business. It’s freeing. It means unlike 90 odd percent of New Zealand businesses you’re not running a technically insolvent business.
Paying your invoices on time means you are building unimpeachable character and your reputation grows because people want to do business with you.
You do what you say you’re going to do when you said you were going to do it. I work on this every day because I’m not always good at this for prospects because proposals suck – I’m always doing something custom and it’s hard.
Hence a big change in my business is coming as I work on the idea of one service for one customer. It’s not easy but it means my business will be super effective, really great at that thing and able to serve even more customers than ever before.
So, as we get to the 20th of the month and stress about the invoices and PAYE and so on you have to pay. Think about the freedom paying them on time will give you. The attention you will have back for other things and remember there is a better way, always.
So, today do this exercise for your business or yourself:
- Decide what you want – write it down.
- Look for people who have done it before and model them – this part is hard.
- Remember, one product/service and one customer.
And always pay your bills on time.