When I was a teenager I used to love visiting my next door neighbour — an old geezer whose shrewd business ventures had made him a wealthy man. He liked to sit in his favourite chair by the fish pond with a Marlboro Light in one hand and a beer in the other, doling out life advice and business lessons which I soaked up like a sponge.

Two decades have passed since I saw him last, but I still remember much of what he said. One of his mantras in particular is etched in my memory: “When you have to pay, pay with grace.”

Business is first and foremost a social activity. The more trustworthy and reliable you are, the more goodwill you generate and the better you manage relationships, the more social capital you accumulate, which tends to lead to more opportunities and greater commercial success — a philosophy that applies as much to relationships with suppliers as with customers and colleagues. That’s why our policy at Methodical is to pay invoices to our network of associates and partners as soon as we can — often within hours of receiving them.

Now from a cash flow perspective people might think this is stupid. But the goodwill it generates and the tone it sets for our relationships with our partners more than makes up for the marginal impact on our liquidity. Everyone we partner with works hard, does a great job and is sought after by others — paying them as soon as possible is not only tangible proof of our appreciation, it makes them want to work with us over anyone else, and deliver the best work they can. In stark contrast, nothing leaves a bad taste in the mouth quite like doing the best job you can — often on a tight time scale — then having to waste your time and energy chasing late payments.

I am astonished that more companies haven’t realized how powerful a gesture paying people promptly is, especially when working with freelancers, contractors or small businesses. For us it’s a no-brainer!

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