The Bad Customer And The Terrible Effects Of Bowing To Them

There is a seldom mentioned force out there in our world that I doubt is found anywhere else in the universe.

This force, although massive, is only growing stronger and ever more dangerous, has always been one that the ones most affected by it have been left to deal with, and feel ashamed when the need to ask for help arises.

The force that I am talking about is what I refer to as ‘The Drag’. It is the accumulated weight caused by our customers not doing their part. The stress caused by years spent chasing late payment and having to navigate what has become the socially accepted approach of pandering, ego stroking and the pantomimed acceptance and understanding of any and every excuse whilst offing yet more options and time frames, which in turn will require yet more pampering and management and further acceptance.

This head down chest to knee bowing while exiting backwards approach to simply getting paid, the only thing that the majority of customers are required to do within the transaction is debilitating.

In my past life as an electrical contractor, it got to the point where, I knew that EVERY invoice that was sent out, whether it was part of a contract or not, would require an awkward follow up, several missed phone calls, emails that took an hour to compose because heaven forbid you get the tone wrong and end up with a negative review or worse.

If we take one demographic within one industry for example.

Small businesses within the construction industry in 2019 was owed $64Billion at any time due to Late Payment. This number is staggering, and to think that this number doesn’t include the micro business (0-15 Employees) nor does it include any business larger than that of the small business. What makes it even more amazing is that the $64B doesn’t include the invoices that were still in the accepted terms, or those marked as delinquent or non-payment.

Fast forward to 2021….

Same specifics within the review and the number owed at any one time to small businesses within the construction industry in 2021 was reported as $138Billion.

Whatttttttt??

At this rate, at the end of this year, this number will be over $200Billion. Maybe we should start to do something. Maybe we should start to talk more openly about our joint issue!

The weight of ‘The Drag’ upon the shoulders of every small business owner in enormous. The acceptable practice of withholding payment with the idea of “pestering”, whatever scale that might be measured on, being socially unacceptable, is something that we as business owners should not have deal with.

“Expert Advice” will tell you that you must:

1. Write a payment request letter or email. … 
2. Send an overdue invoice. … 
3. What is a statement of accounts, and when should you send one? … 
4. Make the dreaded phone call. … 
5. Charge a late payment fee on your invoices. … 
6. Cut them off until outstanding invoices are paid.
7. Contact the debt collectors.
8. Speak to the lawyers.
9. Write off the debt.

All of the above is yet more work, more time and yet more resources to dedicate, and if you don’t get down the list to number 8, within what is usually, 45 days of the recipe of invoice, it’s probably too late to do anything legally about it anyway.

Agreed Upon Terms And Beyond…

As we know, its usually 30 days to pay and then a follow up call and or email, a few days for the customer to acknowledge and reply, a promise of the payment being on the next run, another 10 days waiting for the mail because they don’t do direct transfer, and then by the time it doesn’t arrive this time, we’re on day 50….

Even if you did hit number 8 within the 45 days, have you seen how costly the process is. Im not just talking about the lawyer fees, Im talking about your time taken to deal with this process, that you aren’t allowed to claim for. Just the original invoice and the lawyer fees, that’s it.

Generally, they will do nothing for 12 months just incase you let it drop off, and then if pride is driving you, and you can live with the 3-4 hours per week of your time spent keeping on top of everything, when it eventually comes time for them to think about paying, they will offer you a fraction of the total, just in case fatigue has set in.

Is it any wonder that most invoices are simply written off when not paid?

We know what the drag is and how it is caused. Lets just for a moment look at what effects it has on a business.

1. Many business owners will forego their own wages on an increasingly regular basis.
2. Upcoming jobs are pushed back or cancelled. 
3. Pay rises and bonuses, even though warranted, are not given.
4. Growth and expansion plans are pushed back and often never realised.
5. Because of the stresses caused, the owners, managers and supervisors are unable to step back, in order to effectively support key employees, leading to loss of moral and higher staff turnover.
6. Drive and ambition is over taken by stress and fatigue.
7. Businesses that were so full of promise, close their doors.

So what can we do?

This isn’t a people bashing exercise. It isn’t a beating up of the customer scenario either. What we need to do, is to steer the ship in the right direction, to bring balance, to make being a good customer, whether it be a Residential or Commercial customer, sexy… Make getting one over on a small business, socially unacceptable. We must start to bring the offenders into the light, make it known that they do not satisfy their role, and make it harder for these customers to do the same to other businesses.

Thats why I started Hindsight Rated……..

My Name Is Gavin Hesketh. Please Connect With Me On LinkedIn

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