When you’re in business, there are times when the cash flow begins to run tight. It’s not uncommon in these circumstances for businesses to start paying bills late. This approach is a slippery slope, and a really bad idea. I’ll explain.
Your name is your most valuable asset when you run a business. When you pay late, you jeopardize your credibility. You gain nothing by delaying your bill payment. You are placing your hard-earned reputation at risk.
This may be uncomfortable from time to time, but it is necessary. When worse comes to worst, you can get a line of credit to make sure your creditors are paid on time. Nothing is worse than having to jump through hoops to serve a client need, and not being able to count on a key supplier because your payment history is poor.
When you pay your bills late, you are courting disaster at a time when you’ll need help the most.
When you pay early, often times you’ll improve the quality of the service that you’ll receive. Good companies value their best customers. They’re human too, and they form judgments about the people they come in contact with. It’s hard to survive in business without being paid, and they know that too.
Paying your bills early comes down to one of the simplest rules in life. You’re treating people the way that you want to be treated. That thought alone will always make perfect business sense.