THE WIMPY SYNDROME – WHY CLIENTS DON’T PAY ON-TIME – DEALING WITH FINANCESDec 23, 2019
Popeye was a Sunday morning cartoon staple for most of my childhood. It had a character named Wimpy who would always show up just in time for food, promising to “gladly” pay later to eat today, swallowing plenty of delicious burgers but never paying up.
"I’ll gladly pay you Tuesday for a hamburger today." — J. Wellington Wimpy
As the owner of two businesses (a software company and a marketing consultancy), I make it a practice to require payment upfront for products. Consulting clients pay a 50% up-front deposit and pay the balance before I release the final deliverable. Why do I do this? Because I’ve been continually burned by clients or partners who don’t pay on time, sometimes taking months to pay (and sometimes not paying at all). And even this due diligence doesn’t always ensure my invoices are paid on time or at all. Sadly, this doesn’t just happen to me - I have seen many other colleagues also going unpaid.
I may be treading into forbidden waters here, but I am going to say 2019 has been one of the toughest years financially for me for a few reasons, but the Wimpy Syndrome has directly negatively affected my bottom line. I’m calling it out because this behavior is bad for healthy workplaces and the overall health of our industry and economies.
MY DEALINGS WITH THE WIMPY’S OF THE WORLD:
I was waiting on a client to pay me for a job I did and delivered on in July that included expenses. I did this one without a deposit because I’ve known this company since I on-boarded them more than a decade ago. Alas, the original owners are no longer there, and the friend that recommended me for the job had to nudge them to get my invoice paid. It finally came in after that nudge, but I firmly believe I’d still be waiting without it. Worse, the person responsible has never responded to me about it, and I’ve seen him many times at events without a word being said.
This Summer, I got paid from another client who was on retainer but ran out of funding and finally paid when they got their next round — not the first time with that one. The project has started up again, but the client hasn’t included me in this next set of deliverables or responded to my email thanking them for finally paying my invoices. And this wasn’t the first time this had happened. Lesson: The squeaky wheel doesn’t always get the grease.
A large contract of mine was shortened by two months because a colleague decided to redistribute the funds in my purchase order to something else; she deemed more important. She had the ear of director and was able to make this happen, effectively disappearing two paychecks I was counting on into thin air.
Earlier this year, my bookkeeper hounded a partner for months on two invoices. One got paid and one did not. Instead, we received a form letter that the business had shut its doors and there was no recourse but to write off the debt. I consider this person a friend, someone I have looked up to and have held in high esteem. I’ve since seen this person at two events, and they can’t even look me in the face, let alone offer an explanation or even a simple I’m sorry. I have and will continue to take the high road on speaking and doing community work alongside this person, but why? If your dog poops on my lawn and I catch you, you usually get embarrassed, apologize, and pick it up. So why am I the one who feels weird about a lack of integrity in others?
An international colleague told me when they started doing business here in the US, they also were getting short paid, with one client going bankrupt, leaving them to write off a great deal of money. Another had to drive two hours to a client and sit in the office waiting room for three hours while the client pretended they were not there, finally bringing out a check - but no apology.
I recently saw a Facebook post from a colleague, sharing her story of not being paid and asking all of us the question, “Why? What did I do wrong?” Of course, she did nothing wrong, and that’s the issue.
I have to pay the people who work for me, my living expenses and my credit card bills, regardless of when or how much I get paid – it’s called managing cash flow, running a business, and having integrity. I hear these horror stories all the time (and have plenty of my own) - so what gives with this rampant Wimpy Syndrome?
BAD BUSINESS PRACTICES AND A FEW REASONS CLIENTS DON’T PAY ON TIME:
Shame/Embarrassment: It is easier to go into denial/avoidance mode than to answer emails and phone calls that make you face the fact that you have mismanaged your business or finances. This denial is the business equivalent of “ghosting” a (disgusting) phenomenon in the dating world.
Not Worth the Effort: We all know hiring a lawyer to sue someone is way more costly than the $1,500.00 owed on a project. Deadbeat businesses know this too and use this knowledge to get away with bad behavior. My bookkeeper is excellent at going after funds, but even she sometimes hits a brick wall.
No Bad Word of Mouth: Unfortunately, in today’s gig economy, there are countless consultants and workers at the ready to quickly and cheaply do a myriad of jobs. Availablity of workers means burning bridges has fewer consequences than ever. Not so long ago, if you didn’t pay someone on time, you would be blackballed, called out, and put on the list to get coal for Christmas. These days there is always someone new waiting in the wings to do the work.
Wiggly Accounting/Letting Things Get Out of Hand: Money is easy to get, through loans, credit cards, and other sources. Instead of staying within one’s means and truly understanding one’s numbers and cashflow, these options can keep businesses afloat until the very moment of bankruptcy or a change of business name. The US is a nation of debt, with most people just one or two paychecks away from not being able to pay their bills. Many businesses are in this same boat.
“The average American now lives in effective poverty – unable to afford healthcare, housing, and basic bills. When we become too poor to afford public goods and social systems, something is amiss.”
– Umair Haque, London-based consultant, economist and writer for Harvard Business Review. This comment is from his article “This is How a Society Dies.”
Most people think the main goals of any business are growth and revenue. Those are critical, but the most important component of running a business is cash flow (this is also true on a personal level). Sadly, finances are unbelievably easy to mismanage through taking out loans, overextending on credit cards, and living on the edge of “getting the funding” or not.
Here are a few ways to keep your business and your life solvent. 11 Financial Health Strategies for Business Owners, I love this list and article by Sam Campbell, Senior Marketing Strategist, When I Work:
Know your numbers
Keep up with your billing
Meet your financial obligations
Keep business and personal separate
Track expenses in real-time
Build up your business credit
Minimize your overhead costs
Optimize your workforce
Focus on employee well-being
Create a business emergency fund
Don’t forget to take care of you
For those of us who are consultants, here are a few more things to consider:
Never start a project without a deposit, signed contract, or statement of work
Bill on a retainer by milestone, and don’t begin the next step until paid for the previous
If someone has short-paid you or not paid you in the past, never work for them again
These are all sound preventative measures, but nothing is foolproof. Sometimes you have to try harder to choose wisely who you work with and who you give your precious time and energy. Davy Greenberg, a video director from Los Angeles, posted this quote on Twitter in February 2019 and it immediately went viral:
“If I do a job in 30 minutes, it’s because I spent ten years learning how to do that in 30 minutes. You owe me for the years, not the minutes.”
Greenberg’s words struck a nerve with consultants all over the world. We need to start respecting people, their time, their talents, and the years of experience they have spent becoming mavens (experts in their fields). We need to pay them on time and accordingly. Not respecting people’s talents or constantly asking for freebies (“Why the doctor isn’t in”) creates a lot of unnecessary and damaging stress and hardship.
To me, this all comes down to integrity and having processes in place to manage our money. We are at a time in our economy as well as humanity where we owe it (all puns intended) to each other to be above board, to value each other’s work, intellectual property, dreams and ingenuity. To have a healthy workplace, industry, and economy, we first need to have a handle on our finances. And this time of year is especially tough for many people.
E.C Segar created the character J. Wellington Wimpy in 1931, as our country was emerging from the worst economic situation in history. Wimpy is a degenerate scam artist and a mooch, the very embodiment of financial irresponsibility.
So, don’t get caught up in the Wimpy Syndrome - or be a Wimpy - with the people and businesses you hire. Please pay people on time, respect each other, and value each other’s work. Trust is essential if we hope to increase productivity and positivity in our industries and our lives and build that healthy workplace culture that we all want.
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