Want respect for your business? How you pay your bills says a lot about you. Successful and trustworthy businesses that consistently stay on top of their accounts payable, paying them on time every time, are telling the world that they are winners.
You might think that your payment history is between you and the vendor, but in reality your payment history affects not only that immediate business transaction, but your credit history, ability to receive prompt service when you need goods or services on time, and your local business reputation.
Let’s look at two potential customers. If you’ve been in business for any length of time, you’ve met them both.
Runaround Ron always has an excuse for not paying on time. His view is when his vendors can catch him, or when he needs something from them, then he’ll pay the bill. It might be 60 days overdue, but hey, he paid it, right?
Then there is Trustworthy Tom. He checks every invoice for accuracy, clears up any problems immediately, sees to it that it is posted to accounts payable promptly and scheduled for payment so that his vendors actually receive payment on or a day or two before the due date. If Tom says the check is in the mail, it is.
Which one do you think vendors want to work with? Which one has a stellar business reputation, and even gets leads from their vendors? Which one projects a successful business image?
Successful businesses have reserves for lean times. The Trustworthy Toms plan ahead and make sure that even if there is a temporary cash flow hitch, they can stay in business. Their customers never have to worry about not getting parts or services, because they keep inventory on hand and make and can stick to service schedules. A salesman calling on them is happy to be there. When they call for parts, everyone moves a little faster. If there is a genuine problem with an invoice, it gets cleared up right away, because the vendor knows that the complaint isn’t just an excuse not to pay the bill.
The Runaround Rons find themselves begging for parts, putting off their own customer’s deadlines, and not getting paid because the job isn’t done on time. When they need a loan, the bank pulls a credit report and denies the request. Their business connections run from them, not to them.
Don’t be Runaround Ron. #DontBeRunAroundRon Tweet
Your creditors value your business and want to serve you, but if they can’t get paid on time, then your business is not a good value for them. Be sure that your accounts payable management proves that you are a successful, trustworthy business.
Don’t know where to start? Type “Tips for Managing Accounts Payable” into Google. Here is a sampling of additional resources available on the web:
If you need to talk to one of us at QRFS about your invoice or have a product question, contact us anytime at (888) 361-6662 or send us an email here.