November 11, 2008|Kim's Blog|

One of the national newspapers is currently running a campaign to encourage big businesses to pay their bills on time with a proposed eight point plan to help the UK’s 4.7m small and medium sized enterprises.

As an MBA with a long career advising businesses, the concept of “Cash is King” has always been familiar. But at the present time it is even more important. I find myself in the strange position of advising clients to preserve their cash by ensuring that their Accounts teams don’t send out cash until they really have to (i.e. using all the credit available in the agreed payment terms) yet quietly going mad whilst some of my own clients (who, in the main are medium sized firms of lawyers, accountants and surveyors who you think would know better) are rather poor at paying their bills on time.

There are, of course, one or two notable exceptions – clients who understand that I am a sole practitioner and that all my time is spent working to support two children by myself with little time available to chase late payers or deal with the myriad hassles that result when the cash fails to flow. Not forgetting the effects of the stress of constantly moving money between accounts so that I continue to have enough cash to work, buy train tickets to get to clients and so on.

But just so that you know. Whilst I must preserve client relationships by not getting too heavy about my clients paying their bills on time, the various authorities and organisations who demand money from me have no such concerns.

I had a particularly bad run in recently with H M Revenue and Customs over a VAT bill where my accountant has miscalculated, one or two bills had come in particularly late and I therefore had to pay significantly more than expected. They were completely impervious to my explanation and request for some time. The only word I can use for H M Revenue and Customs is Draconian.

Then there are the PAYE people. And the banks. And then all those financial institutions supporting (and I use the term lightly – perhaps “exploiting” would be more accurate looking at their incredible charges) my business and my personal life. They have systems in place which ensure that you feel like a hunted criminal when you go over by a day. And this is really irritating bearing in mind how so many of them have shown that they have failed as good business people on so many counts recently – and caused unbelievable misery and heart ache to so many millions of ordinary people. With both my children’s birthdays and Christmas coming up cash really is an issue for me right now.

A colleague of mine – with two young kids – recently had bailiffs knocking on her door threatening to take away the family car for a small amount which was a little overdue on her thriving new business. Can you believe this?

So I would like to add my support to newspaper’s plea for all businesses to pay their bills on time. But I would also like to politely request that those organisations who demand their money (sometimes with menaces) remember that it is the small business person who gets thoroughly stuck in the middle – between late paying clients (often from larger businesses) and over-zealous creditors (usually from very large businesses).