This recession is running long and deep. Where businesses are noticing it most is with the time it takes for clients to pay. Slow payment kills cashflow and no cashflow kills businesses. It’s as simple as that.

enotions is not alone in seeing how the speed by which clients pay has decelerated over the last 12 months. The change is stark. I speak to businesses on a daily basis who are just scraping through, laying off staff and spending significant amounts of time and money chasing up payments, just because the time between invoicing and payment has steadily increased.

Enforcing terms and charging interest might intimidate, or more likely annoy, some customers but if they simply lack the funds to pay, no amount of banging on their door, demanding payment and quoting percentage increases to the overall bill will deliver cold hard cash or promote respect on either side.

Picking clients carefully, based on their credit rating, might offer a glimmer of insight into their payment record, but credit ratings are based on previous years and a lot changes in a business in a short amount of time these days. A sudden downturn and that business might go from a profitable goldmine to a dud tin-mine. Equally, can small business, or business generally, choose to be so picky when work is at a premium?

I have been thinking about this a lot recently and wonder if the answer is to actively promote in daily business discussions and, consequently, advertise good payers (and therefore good businesses) YOU want others to know about. This requires minimal effort on your part but would hopefully benefit the business in question, not only regarding their business ethic but also their financial (and consequently business) reliability. No need to target the bad ones. They know who they are ;). But if you promoted those good businesses in such a way to make it desirable for businesses to become good payers and therefore be on the ‘promoted list’, you might be able to solve your cashflow in a manner that benefited all involved.

Promotion could involve highlighting appreciated customers on web sites, recommending businesses on email sign offs, mentioning businesses in published articles, featuring logos on adverts or advertorials, or even reducing the next bill by 5%. Or it could be something as simple as sending flowers, chocolates or something stronger to your best payers’ offices each month.

There needs to be a way to crack the cashflow issue without resorting to endless chasing or threats. If you incentivise clients to pay quickly, everyone should benefit.

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