Negotiating and working within your client’s payment terms to delivering an event
As an SME in the event management field, working with big corporates means being treated like an organisation that has cash flow. Many organisations like to know that the company they have employed to manage a service can deliver the service before payment.
For SME’s that becomes a very difficult task because SMEs rely so heavily on the cash coming in from their clients to run the event and their business.
Here are a 5 few ways we have established to deliver COED ( Cash on event delivery ) events
1. Understand Procurement- Know your payments terms
A lot of the times, we get excited when receiving new business from large organisations and don’t take the time to know the terms in which we have to provide our service.
Many SME’s never ask the upfront questions out of fear of losing business. It’s always important to ask upfront what your payment terms are and to NEVER assume.
Many large organisations, depending on the category of supplier you are, pay between 30 – 120 days. Some organisations have negotiated with their procurement and finance departments to have more relaxing payment terms for SMEs to try and accommodate their need for the cash flow.
Knowing what your payment terms are with your clients, positions you to know how to negotiate with all sub-contractors that will be involved with the delivery of your service.
Make sure you know what your limitations are and inform your client of non-negotiable payment terms. Non-negotiable payments do not include payment of your time, but more so payment that may cause jeopardy to the event taking place.
2. Send that invoice!
Never wait to send the invoice 2 weeks after you have been briefed by a client. Send your invoice immediately.
A good tip is to always ask your client to send you an example of an invoice. Many organisations require different things on the invoice for payment process. Small things like not having the date on your invoice can affect your payment, resulting in late payment.
When sending your invoice, know who to send your invoice to. It’s not always that the person you are working with is the person you should send your invoice to. Make sure you know who to send invoices to. It’s always good practice to copy in your contact so they are notified that you have sent the invoice.
3. Understand your client’s payment process
Always ask your client what their payment process is. Know when they make payments, know when payments are processed and know what bank your client uses so you know how long payment will take to reflect into your account.
4. Develop a relationship with your suppliers
Developing a relationship with suppliers is imperative. In the absence of money, a relationship can be the saving grace of your event.
One way to maintain a relationship is to derive value from each other. We have key suppliers that we now refer to as partners that can assist us in delivering our events. Many of our partners, we have done multiple events with. They know we bring them repeat business and understand to work with us because of that.
Our partners know that what is negotiated as a payment term, we stick to. Always make sure that the payment terms negotiated with your key suppliers are adhered to as this may cause the relationship to deteriorate
5. Be friendly
Being friendly is a culture for us. It is important when you don’t have the cash flow you need to treat people in a friendly manner. In the absence of money, what do you have?
Make sure it becomes a culture to make the experience of working with you and your organisation a friendly one. As human beings, we thrive in positive spaces. Make the space you operate a positive space.
This becomes how people develop a relationship with you and your organisation.
In the end, negotiating and having an upfront conversation with both clients and suppliers allows for all parties to be informed, manage expectations and develop solutions for you when delivering COED event