Unintended Consequence

No pay or slow pay. The wonderful world of small business debt collection. Over the years, I’ve operated several small businesses, and there have been any number of slow-paying accounts, not so many no paying. Most of my slow payers were not bad people.
In my carving business, many of them were like me. Very small, and we worried more about cash flow than about profits. When boat owners slow paid, we all slowed down. Many of our agreements were based on trust and mutual respect rather than a written contract. As funny as it may seem, your word really could be your bond.
At a final resort, many of us traveled in the same professional circles at boat shows, and a reputation could be at risk with a few words. In fact, in the fifteen years, I regularly operated the maritime woodcarving business I was only stiffed once; by a boat owner.

In an earlier venture, it wasn’t so easy. In the early to late 1980’s I had a small consulting business doing cultural and ethnographic documentation projects for not for profits, schools, municipalities, and government agencies. Almost all of them were sloooooow pays. When I went to work regularly for the feds, I rapidly shed all of my remaining accounts. Glad to give up a folder full of documented attempts to collect from “reputable” organizations.
The worst was a large urban school system for which I researched social studies and history curricula. Over the three years I worked with them, one invoice got paid on time. The administrator who was my liaison had a great rapport with me. I made the mistake of making the relationship personal, and that complicated debt collection,
Finally, a project was completed, and I submitted my invoice for complete payment ( including amounts past due). My contact was sad, the government agency funding the grant hadn’t paid yet, but soon. But soon began to stretch to several months, and I began to understand my lack of wisdom in allowing a professional arrangement with the agent of a client to become personal.
Feeling stymied, I went through the documentation I found in the grant application and began following the trail of bread crumbs back to a contracting officer at the federal agency. The contracting officer was understanding but insisted that I had to deal with the school that had contracted with me. I demanded one final bit of information; had they been paid. “Of course! As soon as the documentation was complete!” the feeling of hurt professionalism coming across the phone line made me believe.
So, it is true that I can have a short fuse. Hell, in this case, it was a volcanic eruption. I made threats, I hollered, and at last, I used the dirty practice of political extortion. ” Charles, I’m having lunch with City Councilor Sullivan next week. Yes, I know he takes a great interest in the school budget. I do plan on mentioning your non-payment issue with him. Haven’t you received the funds? No? I guess the contracting officer I spoke to last week will wonder where the funds got misappropriated.”
“You’ll expedite the payment? and when will I see the check?”

I wrote a very polite thank you after receiving payment. By way of a postscript, I mentioned that work with other agencies would make it difficult for me to accept further contract work with them. I referred them to a fellow contractor whom I had great distaste.
About a half year further on, I received an urgent call from them asking me to accept a new contract. I debated with my self about this. I neither wanted the work nor did I want new collection woes. But I did want to tie a knot in the devil’s tail. “Charles, My per diem has doubled, and I understand that you can’t pay that. Perhaps in the future!” As I moved to hang up, he frantically agreed to the double rate.

Be careful what you ask for in business. You might get it.