You have just received an account from a small business for a job well done. How soon will you pay it? What is your usual strategy: same day pay or many days delay? In an article that should prick everyone’s conscience Bernard Salt fires an arrow about paying your bills on time to small business. Salt writes¹ that he has just started his own small business which in a sense is wonderfully liberating. “But in another sense it has been a bit of a rude awakening.” He runs a small business that makes a contribution to our nation: “we generate an income, buy supplies and pay tax. Repeat that process across the nation and it forms the backbone of many communities. There are 1.5 million small businesses in Australia, all doing their bit to make Australia work. If you add families and staff, close to 6 million livelihoods depend on the sector. That means that about four million people of voting age either run, are employed by or are partnered by someone who runs a small business. This sizable group hasn’t had a fair go on an issue crucial to the cash flow that is their life blood – the timely payment of invoices.
It can take 30 days or 60 days or more for an invoice to be paid. Waiting for payments to be paid can be a source of great mental anguish for small business operators with wages and suppliers to pay, especially when they are supporting a family or buying a house.”
Salt believes that if a small business delivers a service ordered by the customer, there is no reason why the customer should not pay immediately, pronto; not ‘at the next pay cycle’. “Saying ‘if I don’t get paid then you cannot pay others’ doesn’t cut it. Don’t order if you cannot pay.” Furthermore the excuse that systems are not in place to process invoices immediately does not hold water. With the right software or on-line banking you can set up a system to pay bills immediately. Salt argues: “This financial matter needs to be converted into an issue of ethics and morality. If you have contracted the supply of goods and services, you have a moral obligation to settle the account immediately the invoice is presented. Same day pay! … It’s a matter of fairness… It merely involves spelling out a new community standard”.
3500 year old law
So far Salt. His idea of “spelling out a new community standard” is very laudable, and fully supported. But it’s not a new standard. In fact there’s a law some 3500 years old that says “You shall not cheat your neighbor, nor rob him. The wages of him who is hired shall not remain with you all night until morning”. This law is found in the Leviticus 19:13 and was part of God’s good law for Israel.
There is another more serious issue: withholding payment for services or goods, not uncommon in our time. The prophet Jeremiah addresses this and gives a hint that withholding payment can result in a curse: “Woe to him who builds his house by unrighteousness and his chambers by injustice, who uses his neighbor’s service without wages and gives him nothing for his work” (Jeremiah 22:13).
A further well-known principle found in the Bible reads “love your neighbour as yourself”. If we apply this principle to paying small business bills promptly, business owners can sleep better at night and small businesses can flourish. If we all apply the principle to life generally, we’ll see great improvements in our relationships and community.
Those bills in your in-tray, will you go and pay them right away, just as you pay immediately when leaving your local supermarket?
(1) Full article, headed “Let’s start a revolution” is published in the Weekend Australian Magazine of 24-25 February 2018.