It was recently reported in this fine publication: “In an effort to ensure small and medium-sized enterprises (SMEs) in South Africa survive the economic crisis, more than 50 large companies have formally committed to paying their SME suppliers within 30 days. “The initiative, called #PayIn30, is spearheaded by Business for South Africa, the South African SME Fund and Business Leadership South Africa and supported by, besides others, Business Unity South Africa, the Small Business Institute and the Black Business Council”.

“Waal, waal waal,” as the Lone Ranger said to Tonto, “lookit all this here.”

I own an SME. I think. I have four staff, three dogs and a cat. It can’t get much smaller than that. In terms of paying our invoices, the worst payer by far is the provincial government of the North West province. They owe us R138 000 and have done so since 2017. We have repeatedly called them (the Department of Health) and invariably speak to somebody who has no idea what an invoice is or how to pay it. We get transferred to others, who refer to still others, who suggest we speak to the quantity surveyors, who suggest we call the accounts department of the client. You get the picture? In general, other provincial departments are not so slack. However, large organisations, particularly telecommunications providers, are very poor payers. They’re too hip to worry about invoices. Not cool. Staff in their accounts departments are very often on leave, on a training course or have “just stepped out” for a bit.

Much worse than the payments are the hoops the SMEs have to jump through to get work. You have to submit the following to get on a vendor list: a black economic empowerment (BEE) certificate, a letter of good standing with the Compensation Commissioner, a tax clearance certificate, an organogram and CIPC registration. Most SMEs are not that organised. The tax clearance certificate is particularly difficult. So, dodgy people buy shelf companies that have similar names, such as Machoy 1, Machoy 2, Machoy 3, and so on. When you start a company, you automatically have a tax clearance certificate, since you only pay tax after a year. The letter of good standing with the Compensation Commissioner is simple and cheap, and BEE is simple. (For Eskom, you have to submit a safety file. It is an awesome collection of documents. When we did work at the Ankerlig power station, I noted in my ‘site safety analysis’ that a potential hazard was having a safety file dropped on somebody’s foot.)

But back to the 30-day payments. It is a good idea to encourage payments, but how to enforce it? There are very many deliberate ‘nonpayers’ out there. I would love to see some form of accreditation system where an organisation could get something like a ‘green star 30-day payer’ and vendors could complain if they didn’t pay. Naturally, if an organisation is a known nonpayer, then vendors automatically increase prices. They figure that, if somebody chooses not to pay them, they might as well price the delay into the product.

In my estimation, if a client agrees to pay in 30 days, we’ll give them a good price; anybody would. If a client agrees to pay seven days after delivery, we’ll give them 10% off.

The fact is that many organisations are staffed with hard-eyed accountants who can drone on about cash flow and interest on outstanding balances, which is really nothing to do with core business.

Harvey Mackay, an American businessperson, author and syndicated columnist, tells a tale of a man who was fired, abruptly. After a few weeks of him doing nothing, the Billy Graham Evangelistic Association (BGEA), a large Christian organisation, phoned the man up and asked if he could do some marketing for them. He agreed and they offered to pay in advance. In advance! By this gesture, the BGEA created a legendary tale which would be told and retold. Some South African business should give it a try . . . hopefully.