One of the things that we do work for is to get paid. This may seem, at least on the surface, to be obvious, but you would be amazed at how many companies don’t seem to get it. After several years of enduring the slings and arrows of outrageous payment terms, we finally started hitting back. First, we took some very excellent advice from the WSJ, and started firing some of our customers. The largest sugar water sales company was one of these, when we went just short of a year in getting paid. Automotive companies seem physically unable to pay a bill in under 60 days, we have had at least one pay a non-discounted price just to get net 60. We try to steer these folks to a couple of outfits we work with who will gladly add their carrying charges on top to let the 60 day (or 90) clock run out. We have a list of about 20 companies that we just will not even quote anymore because of their payment issues. We also changed the wording of our quote since several people interpreted the add-ons for late payment to not be applicable to them. Now we quote the 30 day payment discount, and if you take it to 60 and then try paying the quoted price, you are trying to take a discount you aren’t eligible for.

We had a recent company send a motor in for repair, and through an installation issue, the motor died after 6 weeks or so. This was a large motor, and the repair was somewhat expensive. So at 7 weeks, they call and get the motor sent back in, and we find that it is not eligible for warranty repair because of the failure mode. Some quite harsh words go back and forth, and we finally get to repairing the motor again.

Then accounting comes to me and notes that they have yet to pay the first bill. We copy everyone we have had discussions with on the email that says we will not release the motor until the first (now overdue) bill is paid, and yet we don’t get paid before the motor gets fixed. So the motor starts collecting dust, while their plant is down.

I will bet you money that accounts payable doesn’t get a single word said to them over this. Nobody ever blames Accounting for downtime, but there are people who we could have gotten up in a heartbeat (sugar water again) that we simply have said “we don’t do business with you any longer” and hung up. And the company with the motor? They took a 3 day downtime hit they didn’t have to.