Outside of my beer hobby, my day job involves managing a small company in a boring sector. Without going into detail of the work, it is in an industry that relies on business to business relationships and standard 30 day payment credit terms; like the vast majority of British business and industry.
In an idyllic world there would be nothing more to say on this matter. As a company we pride ourselves on being excellent payers to suppliers and we will bend over backwards to help our clients who are too. But this business utopia doesn’t exist and, as such, the accounts department spend many wasted hours chasing payments, sending copy invoices and trying to work action plans with people.
Once a month we’ll compile the “on-stop” list of clients we are no longer to do business with. Some will eventually pay. Some will fold, leaving us to scrape around 15% of what is owed through the administrators.
On larger orders, several industries maybe involved with the end user, most likely being a large billionaire powerhouse. It is true that the largest companies with the greatest turnovers and internal infrastructure are the worst payers and often they are the customer of the customer of the customer. Everybody at each stage of procurement is waiting to get paid and further down the line you don’t know whether people are working with longer credit terms. We, at the end of the line, are waiting for a payment domino effect.
There are even times when you take a calculated risk with companies that are simply bad payers; companies that you still do business with, knowing that they will eventually pay you but it will always be out of the agreed terms. One company only pays when they receive the court letter – then fully pays, court charges and all, every time...
It is also true that you feel a sense of frustration when companies that owe you long overdue payments – sometimes for rather “measly” sums – will be present online announcing huge new contracts or expansion facilities. You bastards, shaking hands with giants of the industry, announcing ongoing profitable partnerships, increases in turnovers, additional staff and yet we’re still chasing you for a 5 month overdue invoice. You absolute arseho...
But the frustration stops at the office door.
The beer industry differs to many others, including the one that I work within, due to the face that it has. Many of the customers and supporters are hobbyists rather than clients. People are not viewing the product as part of a business, preferring a sense of familiarity and the employees to have names and personalities.
This can lead to customers – or “end users” – becoming more of a fanbase rather than a target audience. The issue can be that such loyalty leads to encouragement and support of problems that should be addressed in a business capacity. There needs to be a strong disconnect between the two.
When the frustration at payment chasing begins to spill onto social media then the office walls are being removed. Sure, use the power of social media to have a rant or vent about some accounting annoyances but know when to close the app down. It frightens me when I see responses along the “Name and Shame” line – “Tell us who the pub is so that I can make sure I never give them any of my money.” This isn’t right.
There can be many reasons that small businesses are struggling with working with agreed credit terms; lack of payment higher up, cash flow issues, etc... Of course, it could be that they are genuinely awful. We can't know but most importantly, we the consumers and observers shouldn't know.
Those customers may disagree with me, thinking they have the right to this information so that they can choose where to spend their money in support. You don’t. If this isn’t part of your everyday work then it may sound horrifying but are people showing sympathy and understanding because they believe they are so worldy that they can empathise? Does their compassion come from a sense of blind loyalty? Because this is reality and it doesn’t care about your feelings.
Behind closed doors, perhaps. Share your experiences with industry peers. Share those that have screwed you over to stop it happening to others in the business if you wish. But globally naming and shaming is unacceptable.
If people want to discuss the damage it does and how it should be changed in this industry then fine but do not lose demureness whilst you are at it. It is every industry at every business level and can put smaller businesses in precarious positions. It is the carousel hell of credit agreements that I would like to see universally changed too. It isn’t just a problem for beer though.
The mantra from Jim at Beers Manchester that he discusses here is hard to argue with and would be ideal. Business rarely works out that way though. Showing and giving respect includes not humiliating them via social media but addressing commerce issues through the correct channels.
Understand that these opinions come from a place of empathy. The abuse on agreed credit terms is such a grievance across all business, but especially smaller ones. Let us not allow the temptation of social media venting claim further decorum and professionalism. Unless you are determined to be the anarchist of business finance it needs to be something that we grasp.
Supporters, customers and followers need to follow suit.