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By Charles W. Kyd
I've found that shipping a high-quality product speeds collections in two ways. At the minimum, it nearly eliminates poor quality as an excuse for postponing payment. Better yet, customers will tend
to take better care of you if you're a vendor upon whom they can depend.
"We can't pay until your paperwork is correct." More typical of a large company than a small one, this excuse automatically postpones payment for at least a week. It arises when an adjustment must be made to the invoice because of a pricing error, damage in transit, a short shipment, whatever. Many companies will be happy to solve the problem over the phone. Others will insist on receiving a credit memo, corrected invoice, or other document before they'll schedule your invoice for payment.
Some companies use a passive variation of this excuse. If there's some question about your shipment or invoice, no matter how minor, these companies set the invoice aside in a "problems file." If you call, they say, "I was hoping you'd call. I need to have this question answered before we can pay..."
Of course, if your paperwork is accurate, understandable, and readable, it tends to reduce the questions and delays that can postpone payment.
"We don't have the paperwork yet." This excuse caused me serious problems several years ago when I worked for a small distributor. After we received a big order from a large chain of department stores, I sent our invoices to the receiving addresses, as the central office had specified. I soon learned that people at the receiving addresses approved the invoices when they had the time, then sent them to the central office for payment. When the paying office eventually received the invoice, it would schedule payment for 30 days from that date. To speed up collections, I had my secretary call the bookkeepers at each receiving address on a regular schedule to help them approve and forward our invoices quickly.
I called another company about an overdue invoice, and the accounts payable supervisor told me that her receiving department had no record of our shipment, and that she'd never heard of the person who'd signed our waybill. In desperation, I called the receiving dock and pleaded with the man who answered the phone to help me find the shipment. After 10 minutes of discussion and research, he found it in the back corner of the warehouse. Since our shipment had arrived when they were very busy, he said, someone had set it out of the way, then forgotten about it. The waybill had been signed by someone from the shipping dock; no one knew why. Not yet satisfied, I called the person who had ordered our product and the accounts payable supervisor. Both were pleased that I'd solved their problem, and both agreed to send payment immediately.
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