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Thread: Everyone knows South Africans don't pay

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    Platinum Member desA's Avatar
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    Everyone knows South Africans don't pay

    "Everyone knows South Africans don't pay!"

    This is a statement by my IP attorney in regards to his requirements for up-front payments for IP work & filings. I chuckled when he said this, as past experience in my earlier years in SA had confirmed this fact. I always pay cash upfront where appropriate, or on a progressive-release basis.

    Fast forward to my latest adventures in SA business.

    I take on a project for an industry association with a solid, historical membership. With these kinds of clients, they are generally expected to pay on time, with an invoice with 'payment on demand' terms. First payment had a few grumbles while the direct banking setup was engaged - so I was informed. Second payment was reasonable - took around 6 days to clear. Bear in mind, these are online payments.

    Third payment: Payment officer sick from 20 Oct to 4 Nov with a minor illness. Promises made for payment on 4 Nov - nothing forthcoming. Officer notified per phone, promises payment today. Payment did thankfully make it, along with a very curt notice.

    At each step of the process, the invoices had been accepted & compliments paid in regards to the performance delivery. What to make of the whole affair? Bear in mind that I had not received this kind of issue in my many years of working abroad, in various countries.

    South Africans don't pay!

    This is a cultural issue, I'm sure. All future work will be performed with up-front payment structures in place. I am not a banker, nor do I have the time to chase down payments. I give the folks good rates & endeavour to perform above guaranteed deliverables. I'm happy to take on work & work my butt off - but, I expect to be paid accordingly.

    A rude awakening - South Africans don't pay!
    Last edited by desA; 08-Nov-10 at 07:54 PM.
    In search of South African Technology Nuggets(R), for sale & trading in South East Asia.

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    Neville Bailey (08-Nov-10)

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    Platinum Member Neville Bailey's Avatar
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    Hear! Hear!

    You have echoed my sentiments exactly!

    What's more - it seems to be getting worse by the month, in my experience.

    As a sole operator, dealing with some medium to large organisations, the problem seems even more acute.

    What really riles me is when I have been praised for great service, and then all requests for payment simply get ignored...
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    desA (08-Nov-10)

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    New Member Dreyer Smit's Avatar
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    I get where you're coming from...I've seen it happen so many times. In my business up front payments are the norm. I've been begged for credit, but I know, come first month there would be some sort of issue preventing full payment.

    But in some cases it is difficult to do the cash upfront plan...say if you render services per hour, then the client can only be billed afterward. It is a difficult situation. Another option is to threaten the client with Credit Black Listing.

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    desA (08-Nov-10)

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    and the latest excuse... for delayed payment...YOU ARE NOT REGISTERED AS A PREFERED SUPPLIER WITH THE GROUP...so we have to first register you company as a preffered supplier with our group which normally takes 6 weeks...but because the company owner is away for a month it will take a little longer.

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    desA (08-Nov-10)

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    Platinum Member desA's Avatar
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    Thanks Dreyer.

    Quote Originally Posted by Dreyer Smit View Post
    I get where you're coming from...I've seen it happen so many times. In my business up front payments are the norm. I've been begged for credit, but I know, come first month there would be some sort of issue preventing full payment.
    This is a key statement for me.

    But in some cases it is difficult to do the cash upfront plan...say if you render services per hour, then the client can only be billed afterward. It is a difficult situation.
    I agree. This is always the difficult situation in terms of services rendered. Perhaps lumps of pre-billed man-hours?

    Another option is to threaten the client with Credit Black Listing.
    I hate this option. Makes you feel pretty mean.
    In search of South African Technology Nuggets(R), for sale & trading in South East Asia.

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    Platinum Member desA's Avatar
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    Quote Originally Posted by murdock View Post
    and the latest excuse... for delayed payment...YOU ARE NOT REGISTERED AS A PREFERED SUPPLIER WITH THE GROUP...so we have to first register you company as a preffered supplier with our group which normally takes 6 weeks...but because the company owner is away for a month it will take a little longer.
    Always happens after the fact - I'll bet.

    Perhaps better to submit an upfront invoice & kick off the work when the invoice is paid? So much time gets wasted chasing down bad debts. It totally de-motivates me.

    This kind of stuff is so much not the norm in many parts of Europe, UK, US & even Asia. SA seems to stand out in this achievement.
    In search of South African Technology Nuggets(R), for sale & trading in South East Asia.

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    Site Caretaker Dave A's Avatar
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    And when customers don't pay on time, it puts stress on you paying your own creditors on time. It's a vicious circle
    The trouble with opportunity is it normally comes dressed up as work.

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    desA (09-Nov-10)

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    Gold Member garthu's Avatar
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    Must say we have had it pretty good and we get most easily. We do ask for 70% upfront and most people are fine, have negotiated a few bigger progressive ones. At the end of the day though it means i dont need credit to get the job done nor do i give credit.

    Lost one or 2 jobs cause of it, but experience also says that guys that query terms of payment are often the problem ones. The references are there for them to call and see...
    Garth

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    desA (09-Nov-10)

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    the way i see it is if they cant put at least 50 % at least up front how will they pay the bill when the time comes to pay.

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    desA (09-Nov-10)

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    Gold Member Martinco's Avatar
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    Absolutely true !

    My son runs a business in USA and there the norm is " pay me and I shall send you the goods" and on top of that the customer pays for the transport/shipment.

    I also run a trailer parts outlet and I apply the same rule. If it is on the shelf, you pay me and take the goods but if I have to order, you still pay me 100% and get your goods when it arrives.
    I mean............can you go to P&Pay and tell them that you are taking the goods and you will pay later ?

    BUT...........dealing with corporates and bigger business it is quite different. Then you run into the difficulties as described by above posts and unfortunately one cannot do without their business.
    Imagine me telling Amplats that they must pay me upfront or COD ! You stand NO chance.
    What I have found is that by the 25 th of the month my accounts lady starts phoning the traditional late payers and checks that they have all the invoices and if everything is ok and " when can I expect the payment ? " and if not in by that date, she phones again and again but as Dave says.......it's a vicious circle, now I cannot pay my creditor and maybe miss out on a settlement discount or get him uptight and he stops supply.

    Being in business is not for sissy's otherwise the Girl Guides would be doing it.
    (No disrespect intended )
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