1st November 2012 at 9:31 am #5607
2nd November 2012 at 6:27 am #5639
I have had some clients who were totally inconsiderate regarding payments – and would make up their own rules about when to pay me for services rendered, even after agreeing terms. Fortunately I have moved away from these clients and now have clients who are considerate, supportive and professional. I’m in favour of seeing such a list of poor payers.
2nd November 2012 at 6:29 am #5638
2nd November 2012 at 6:33 am #5637
Heidi D EdwardsParticipant
There is definitely a culture of non-payment for services rendered in South Africa today. From just ignoring your invoice, to only paying a part of your invoice, to making promises that payment WILL happen (and then nothing happens) to just plain lying about making payments. It is definitely bad behaviour and very definitely questionable ethics.
However, let’s lead by example and remember our own values. We live in trying and interesting times.
Heidi D Edwards – CIMAP Convener: Ethics & Accountability.
2nd November 2012 at 6:35 am #5636
This extract may offer some alternative thought.
I work with companies on Stakeholder Management issues and facilitate a program called Stakeholder Reputation Management. On the 2nd day I always end off the Master class by getting delegates to develop a set of ground rules of engagement with Stakeholders including a list of tips on how to foster better relationships and reputation.
The title of this article is what the one group suggested.
Differentiate your Suppliers and pay them accordingly.
This really made me think, and prompted me to share a very disturbing trend on my blog at the time.
I run a one- person consultancy. My cash flow is key to business continuance. Yet, this year I have had spend more time on collecting money than ever before.
This is what is happening:
1. Managers attend courses and events. I advertise events as prepaid. Registration forms are completed and signed and invoices promptly sent out. But that is where it ends. I meet these lovely & dedicated people and work with them. However, now comes the crunch – To get my money.
Sometimes I have to wait up to 9 weeks to get paid. And, I have to deal with unhelpful back office staff.
- Even worse, the lack of attention is frightening. How can it take 2 weeks for a clerk to inform a secretary that the VAT number she gave the client is wrong and that they need an amended invoice?
- Even worse, my own Bank sent a senior manager on course and it took them 8 weeks to pay me. Yet, if I go over my overdraft limit by R2 they have the audacity to sms me that same day. Is that fair? In fact, it is 6 months since it happened and I am still angry about it.
- How on earth does it take 5 days to process a payment? That after they have all the documents and the invoice? It is nothing other than an admittance of poor administration and stalling payments.
- Recently I even wrote to the Head of Finance on two occasions to get paid. He did not even bother to respond.
2. The new tendency. In order for a manager to attend a once-off event I need to complete supplier database forms that need to be signed off by the Bank, sometimes SARS and often by a Commissioner of Oaths.
Sometimes I am sent these documents after an event – and it can take a day out of my time to comply with all this administration. Billable consulting time. Who says I want to be an official supplier? Surely there must be a way to fast track certain expenses?
3. Supplier Database Forms ask for your type of business.
Why I don’t know. What difference does it make? If you state that you are a SME or sole proprietor, it makes no difference. In fact, you will probably be paid even later than some of their key clients.
Yet the South African Government wants to assist SME’s. Companies write that they care for their customers and suppliers. Well, if they did their systems and service surely do not suggest that.
I agree with that group.
Why can they not:
- Fast track sole proprietor and SME payments? (Or do they not understand the different problems experienced by different types of businesses?)
- Why is there no provision for once-off payments such as event attendance?
- Why can managers who attend courses and events, not accept the responsibility for following up the payment of that supplier?
- Why can they not respect my payment terms?
Something is clearly wrong with Stakeholder Management in companies and there is no better place than to witness the lack of focus and lip-service than getting your invoice paid.
If companies were really stakeholder management focused, they would pay more attention to their service providers needs and expectations. As an external service provider who often has already rendered a service, I expect my payment terms to be respected. I expect them to be more sensitive to my needs.
I am not interested in the internal systems and procedures. That’s your problem.
Pay my invoice on time.
It is simple. Differentiate your suppliers and pay them accordingly. Surely it is not that difficult.
Or is it just that Stakeholder Management thinking is just a fad?
2nd November 2012 at 6:51 am #5635
Hi Tass I second your vote regrading the “Bad Payers List” I have total and complete empathy with you and your partners. I was shafted yesterday, again with an excuse and a promise to pay later! So please take a little solace in the fact that you are not alone today in feeling like you have been used and abused.
2nd November 2012 at 7:01 am #5634
2nd November 2012 at 7:03 am #5633
I add my voice to indicate that I am in the same position. And in economic times such as this, it is killing my business. Try being honorable in paying salaries of the two people in employment who has worked their butts off to please the client who has never agreed with me om payment terms to be 60 days. Keep my values upheld in paying for printing services, development fees and all other business related costs when today on the second of the month I get the response from the payments clerk (for the past 3 years) that payments are now done from India and she has nothing to do with it! Now I don’t even have somewhere to follow up and negotiate anything with.
I would love to ‘black-list’ them, but they are one of my main sources of income….. where is the tipping point?
2nd November 2012 at 7:15 am #5632
Deon, your article should be published in every magazine and newspaper and should form the basis of a good debate on Redi’s 702 talk show! We are encouraged to develop the SME sector, yet all the red tape in companies and even the supplier database forms are obstacles that kills cashflow, let alone opportunities to expand our businesses and create employment opportunities.
I find that it is often the larger companies that are the worst payers.
I reached the point where I talk directly to the person (often the MD) who contracted my services in the first place. I normally say something like “you and I had an agreement; I notice that I have not yet been paid. Were you dissatisfied with the service you received?” They normally feel quite embarrassed and my payment is processed without delay.
When dealing with the back office staff I ask “have you received your salary this month?” Obviously they did. I then say “what would you have done if your company delayed the payment of your salary?” If I was promised payment on a particular day and the payment was not processed, I send emails (and copy the MD) day after day after day. December is usually the worst month for receiving payment. Companies happily close their doors for the festive season delaying payment until mid January, not giving the poor self-employed consultant/service provider a second thought.
Where is the ethics in that? So yes, let’s start a bad-payers list – maybe then someone will sit up and take note…
So Tass… get on the phone and throw your toys…
2nd November 2012 at 7:20 am #5631
2nd November 2012 at 7:21 am #5630
Agree that Deon’s article summarises it perfectly. What about Carte Blanche?
I know that there was a special ‘desk’ in the presidential office established recently to deal with the issues of small business and government – which is a ‘client’ you don’t want to even think about….. but corporates are getting just as bad I think.
2nd November 2012 at 7:38 am #5629
Yes please can we have a bad payer’s list. I do not have much of this, as we just do not deliver material until payment has been received, but I have been taken in by a specific client who also did not pay some clients of mine. It seems that certain service providers just make a habit of enriching themselves by simply not paying suppliers and, really, everyone should be warned about this.
2nd November 2012 at 7:46 am #5628
2nd November 2012 at 7:53 am #5627
2nd November 2012 at 8:21 am #5626
2nd November 2012 at 9:48 am #5625
Rufaz M MavhureMember
Brilliant constructive discussion by all. I 100% agree. If a customer is listed as a “Bad Payer’ and all providers shun then the client will pay fast. Need for some processes reengineering. BUT i have one service provider(Training Company) in Jozi who refused to pay (individual service) even telling Labour Department ” I wont pay”. Times for fearing legal implications are now over name and shame might result in positive moves. Before delegates come for trainings clients should process payments in accordance.
2nd November 2012 at 9:48 am #5624
Are we not sinking to the levels of our non-payers?
Some questions I would ask include, When does a supplier make it to the list? How is non-payment defined?
How does a supplier get off the list? Is there an appeal?
If there is no control, can we (every one of us) be trusted not to abuse the list?
So I’m not in favour, but then, I’m new to the game? Perhaps I’ll be leading the pack in a year or two?
2nd November 2012 at 10:13 am #5623
Touchy subject, this one. Another tricky situation is when you as a consultant are sub-contracted by another training provider and they do not stick to their own service level agreement in terms of payment. Their main excuse always being that they are waiting for the client to pay them! So which one came first, the chicken or the egg?
2nd November 2012 at 10:51 am #5622
2nd November 2012 at 10:54 am #5621
2nd November 2012 at 11:12 am #5620
3rd November 2012 at 7:18 am #5619
I have had some thoughts about how other successful learning institutions and companys work – forced debit orders signed on consent by the people who we get work in from… Cell phone companies do this… and if you start thinking about it many other places do too. Can this be done (I have no idea about legalities here) and those that do not wish to do this then… well do we trust them?
3rd November 2012 at 11:49 am #5618
At the APPETD AGM a few weeks back, I suggested that we consider establishing a students/delegates ‘black-list’ for providers. There is nothing more annoying than discovering that a student who cancelled a course halfway through, citing the Consumer Protection Act when demanding a refund of the 20% that he paid, had just done the same thing to another provider. If only you had known this before enrolling him.
But, we need to be aware of the implications of the Protection of Personal Information Bill which is expected to be promulgated early next year (btw: ‘Personal’ includes juristic persons)
Find out more at: http://www.kpmg.com/za/en/issuesandinsights/articlespublications/protectio...
It will, in any case, be quite an onerous exercise for a provider of ETD to keep students/delegates personal information sufficiently confidential. What would the implications of putting a defaulter’s details into the public domain be?
3rd November 2012 at 12:49 pm #5617
Funny thing is that people arrive on the credit bureau listings as poor payers, why can we not establish something like this? If you do not pay other providers such as financial institutions then you are listed, the same goes for anyone else. Perhaps the answer here is to to cite in any contractual area that the Learners/Providers/training Institutions/People who ask us to develop courses, are sent the usual letters stating that they are in arrears,(Section 129 of the National Credit Act 34 of 2005 (the “NCA”) requires a credit provider to notify a consumer, who is in default of a credit agreement, of the fact that the consumer is in default before the credit provider may commence with instituting legal action against the consumer. if they have not paid within 10 days that they risk a listing on credit bureau or being handed over to debt collectors.) Maybe we need to get tougher in the contracts that we make with providers because as service providers we have every right to do this?
3rd November 2012 at 1:04 pm #5616
It would be one thing for me to post a rant on this, or any other social-network site that ABC Company, or student AZ failed to pay me. You can then use the information or not. It would be quite another for us to maintain a credit-risk list on an open forum. In the former case, only I run the risk of litigation (if the bad payer notices). In the latter, we all face the risk. And the risk is greater. In my case I am simply stating the facts of a failure to pay, which would be difficult for them to dispute. In the case of a list, we are judging and labeling them as a credit risk. That’s a much more serious accusation, which would need very tight control in the form of proper contracts and follow up notices and warnings before we add someone.
3rd November 2012 at 1:24 pm #5615
“In my case I am simply stating the facts of a failure to pay, which would be difficult for them to dispute,”Would need very tight control in the form of proper contracts and follow up notices and warnings before we add someone.”
Yes perhaps this will make us more responsible about who we offer our services to then. I think that its time to get tough, as service providers we offer services that are anthropocentric in our environment and to be treated un ethically by those whom should pay is simply not on anymore. I hope that the elements who are not behaving are reading these posts – its time…
5th November 2012 at 6:41 am #5614
I am just as frustrated as you, however the payments I am yet to receive are from the SETAs themselves. I have not just been waiting for payments but taken the issue all the way to the highest levels I can and still have not been paid. Short of legal action and approaching the Public Protector I am not sure what else to really do and unfortunately the list you propose, which I completely agree with, will effectively serve no purpose.
Many of the “clients” I have approached refuse to pay for training and services themselves and insit on funneling the payments via SETA grants. As you can see my issue is a far graver one for my business.
If anyone is able to assist me in how best to land clients that pay for training themselves then I would appreciate it. Until then my voice will stnd alongside yours with the non-payment issue, but my secondary issue has led me to possibly consider working on a consulting basis with other training providers.
6th November 2012 at 10:58 am #5613
TUMELO STUURMAN MOKOENAMember
6th November 2012 at 1:13 pm #5612
7th November 2012 at 8:19 am #5611
Tass, I have experienced it with a huge Educational group – we had an agreement on delivery dates for the work as well as payment dates that went with it.
One part of the contract was a management contract whereby we were supposed to be paid monthly – on the last day of the month. Eventually, payment was made up to 15 days late after having to threaten with legal action. Needless to say, I “fired” the client from this contract and pulled out two months before it was due to end.
The other part of the contract is material development – delivery was made at the end of September with a large sum of money due on delivery – I am still waiting. Fortunately, I had retained the electronic copy which I said will be delivered once payment is made.
It is disgusting that there are businesses like this. This particular client is a huge private training provider who is taking millions from their learners on a monthly basis all around the country and yet they cannot pay their suppliers (I believe I am not the only one…..)
I agree that we should name and shame!
7th November 2012 at 8:29 am #5610
9th November 2012 at 7:49 am #5609
Hello Peter is not a bad platform but companies only really answer if they are prepared to put themselves on the website itself. Perhaps the Consumer Council is a better option, but at the end of the day it seems that they really do not care and providers are always the losers.
24th December 2012 at 4:16 am #5608
I am with the South African Board for Coaching, Consulting and Coaching Psychology. They have created a Yellow list of unethical businesses, these could include bad payers. This is a service for consultants who are their members. They can be found at http://www.sabcpcc.com.
Away with bad ethics!
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