Building Better Relationships With Timely Payments
Timely payments keep the machinery moving
When clients pay invoices on time, suppliers feel appreciated. They feel that their expertise is valued, and that their needs are important. Like you, suppliers have deadlines to meet. And timely receipt of payments owed makes it possible for suppliers to service your needs, and the needs of others. But missed payments can stall the process -- or stop it altogether. Here's how it happens:
Missed payments can affect relationships
Whether a late payment will jeopardize your relationship with a supplier depends on two things:
- The dollar amount of the payment. The higher the figure, the more quickly the problem needs to be resolved.
- The treatment the supplier receives when following up on an overdue payment. Relationships suffer when suppliers are ignored or given the runaround.
Not meeting vendors' payment terms can have unintended consequences for you and your company. Suppliers may:
- Require their money up front when doing future business with you
- Add a premium to your work
- Decline your projects
- Mention their problems with your firm to others
What happens when a supplier requires an advance payment, but the client is unable to do so? Advancing money is part of doing business. Advancing money demonstrates that a buyer is serious about their project, and that they value the needs of the supplier. If you are unable to make an advance payment, a supplier may wonder about your ability to pay your bills on time, if at all. If you want to work with first-rate suppliers, be prepared to make advance payments when requested.
The bottom line
Many suppliers feel that everything a client does -- and doesn't do -- is a reflection on the client's attitude toward the supplier. And when it comes to making payments, how clients treat vendors says a lot. That's why one of the proven ways to build lasting relationships with quality suppliers is to pay invoices on time.
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