Sunday, March 9, 2014

How I Pay My Bills

This post really has more relevance when interest rates are higher and cash flow management becomes more important, but I expect the current interest rate climb to continue for a long-time and that cash flow management will become more important once again.

When I first started out consulting on my own, one of my first clients was a small NYC bank. The most amazing thing about this client---and I had this client for 6 years before it was bought out by a major--was that my invoices would get paid so quickly. I would send an invoice out on the 1st of the month and sometimes I would, amazingly, get a check back on the 3rd. I can't ever remember getting a check back later than the 5th.

That check came in like clock work, month after month. I could always count on it. Do you think I thought that bank was a great client? You bet I did.

After experiencing this for awhile, I realized just how much of an impact you can make by paying bills quickly to small businesses.

Whenever I receive an invoice from  a small business, I try to pay it within 24 hours. If I am busy, it might take me a couple of days. But any small businessman that deals with me learns pretty fast that my payment to them is coming real fast. I'm sure this ups me a notch or two as a "good client."

With large corporations, my payment style is just the opposite. I drag out the payments for my cable bill, electric bill etc. until the last minute. If I ever have a problem with my cable or electric, the repairman coming over to fix the problem is never going to say, "Hey this guy pays his bills quickly. I am going to give him my best service." As I said, dragging out the payments to manage cash flow when interest rates are low isn't that important, but I have my system and as interest rates climb, I will capture the interest on payments to major corps by "just in time" payments but I will continue to up my "good client" status by paying my small business bills right away.


  1. I do the same. Local, one step away biz gets immediate payment. VERIZON, Kabletown, etc. get it the last day possible.

    This is one thing that pisses me off about Lewrockwell.Com. He still thinks corporations are okay, and should be treated as such. I always suggest to my...friends...that they run up their credit cards before bankruptcy and not worry about it.

    They always make repayment plans with small, local biz and tell the government controlled multinational corporations to suck it. And they feel justified and have no qualms.

  2. How others Pay their Bills,,,,,,,,,,,,,,,,,,,,

    Ukrainian gold reserves loaded on an unidentified transport aircraft in Kiev's Borispol airport and flown to Uncle Sam's vault

    According to the last night ,Ukrainian gold reserves (40 sealed boxes) were loaded on an unidentified transport aircraft in Kiev’s Borispol airport. The board took off immediately.

    A source in the Ukrainian government confirmed that the transfer of the gold reserves of Ukraine to the United States was ordered by the acting PM Arseny Yatsenyuk.

    So my guess is, that is if indeed this report is true it either means the new ruling elite have stolen the gold bullion or perhaps their is a legitimate fear of the Russians taking possession of this bullion, whatever the facts, it still looks very shady indeed.


    Official narrative: gold bullion is going to USA (maybe to reassure the Germans their gold is in safe hands, after all the despite numerous requests from the German Govt The Feds have not given access for them to even view their Gold Bullion) . Real narrative: probably to Switzerland where it is divided between Yulia Tymoshenko and her cronies.

  3. When I ran a small consulting business, one of my clients was a company that's been a DJIA component for quite a long time. Their contract terms were net 90, take it or leave it, so I factored the payment delay into our hourly rates. After a year of mutual success, I received the renewal terms from their purchasing manager, which included a switch to net 120 and a demand that our hourly rates be reduced by 3%.

    When questioned, the purchasing guy said this was their standard renewal and reflected the branding value their business offered a small company like mine. I told him to go pound sand--they were a good client but not that good, and I was able to fill the booking gap with clients who, while not as prestigious, at least paid on time (net 30) and didn't nickle and dime me on rates.

    The DJIA company sourced another vendor, but the subsequent projects were dismal failures, and they contacted me about resuming work. But at that point we were fully booked, and they were only willing to restore the original contract terms--and only if they could have the same team. Once more I told them to pound sand. I never heard from them again, and we never missed them.

    Today I always make sure we pay our small vendors' bills promptly, and if we have someone who's doing a good job for us, I make sure none of my direct reports even thinks about nickle and diming them.

  4. The timing of this post is freaky, I just established a relationship with a division of a client(client does $1 bil/year in revenue) that I wasn't working with before.

    My business is small and I was working within their corporate structure to get paid in a timely manner and received a call from the division CFO Friday at 4:50PM....she dropped the terms to "Net 1 day".


    I told her, "I was already making sure you guys had our company's best efforts, now I have to find a way to go beyond that!".

    Absolutely RW, they have endeared themselves to me now. I have a couple of small business vendors I always pay quick for the same reasons. It comes back to me in spades. Some of big corp vendors I use don't give a rats ass when they get paid to the point of ridiculousness at times.

    The biggest vendor I use(think big yellow industrial catalog/book) doesn't even call me on bills that have been misplaced until after they are 90 days past call my customer 10 days past due.