Contract Law……..
What sort of world do we live in when a main contractor can get away without paying you – but then insist that you have to go back and carry out works or they will get someone else to do the work and contra-charge you.
These are the times we live in folks!
Personally, I’m thinking that maybe us business owners need to have a little more respect for each other. If you have shaken hands and agreed to pay within a reasonable length of time – that’s what you should do….if you can’t – then get on the phone and explain.
Some smart arse will no doubt respond to this blog and say … ‘but you don’t pay everyone on time Mike’ – well no I don’t – BUT- there is a reason. As a small to medium sized business I very much depend on my customers paying me – to enable me to pay others.
This year has been a nightmare from a ‘cash’ point of view. Its one thing having a full order book – it’s another thing entirely to get people to actually part with their cash. All it took this year is three of our customers to delay their payments and we were down by £150K. They all insisted that they had valid reasons for delaying payments – but - all that they were doing was using us as a banking facility.
Another one of our larger clients decided that they were no longer going to pay on 60 days – and were going to pay on 90 days.
All that actually happens then is that we don’t get paid anything for one extra month. With a regular 12 monthly payment profile when terms are extended – you only get that money back when you stop working for them – when the contract rolls over to the next year you have actually only been paid for 11 of the 12 months i.e. they have discounted the project by 1/12th.
And so it goes on.
I’m not really complaining because I know some companies are far worse off…some companies are no longer around.
I’m just saying that my stress levels would be much lower if all I had to worry about was getting the work done.
As a business owner, one has to worry about getting the work, worry about doing the work, worry about getting paid….
Worry, worry, worry
Mike C
