Important lessons arose early in the Badger’s career from experiencing the stress, effort, and time taken to get an invoice for a contractual milestone paid in full. The Badger learned about the importance of rigour when invoicing, and the need for detailed, verifiable, proof that all deliverables were delivered and contractually compliant. He also learned that clients may play games to delay payment if it suited them or provided useful leverage over their supplier.
This stemmed from particular dynamics encountered after completing software Acceptance Testing on a client’s site. It was an important contractual milestone with a sizeable payment attached. Its achievement also marked the point whereby a) control of the software transferred to the client to roll it out to their users, and b) the contract’s warranty and support phase started. Testing had been successful and on its completion the client agreed the milestone had been met, they took control of the software, and they agreed the start of warranty and support. Relationships were good and the invoice for the milestone payment was submitted. Then things became difficult!
The client claimed the invoice format was wrong, that all contractual deliverables hadn’t been provided, and that relevant documentation and certifications were not contractually compliant. They continually demanded more and more material to support the invoice. Relationships soured. The Badger’s line management, fearful of jeopardising future work for the client, simply said ‘do what they want and get the payment in pronto’. The Badger did as he was told! Eventually the client said everything was in order and that payment would arrive in line with contracted terms. The money, however, did not arrive!
It emerged that the client’s user rollout programme was suffering delays and so they had decided to withhold payment to ‘keep the supplier on the hook’ until it was back on track. A frustrated Badger wrote to the client pointing out that contractually there was no transfer of software to the client without payment for the milestone, which meant their user rollout activities constituted a breach of contract. It was not a popular move, but a contract is, after all, never an irrelevance! Payment happened a few days later.
The young Badger learned lessons about the real dynamics of business from this experience. Sometimes clients don’t pay because they choose to preserve their cash flow at the expense of suppliers, they don’t have the funds, or they really have lost an invoice. Sometimes, however, they simply engage in gamesmanship and choose not to pay. Today the proportion of invoices not paid on time by large UK businesses can be checked here, but business fundamentally revolves around people who have diverse characters and behaviours. Gamesmanship will thus always have a part in business dynamics, so it’s worth remembering that, as the Badger learned then and over the years since, suppliers need to be just as good at playing games as their clients…
