To Invoice or not to Invoice; Commerciality vs. Humanity in Times of Turmoil.

To Invoice or not to Invoice; Commerciality vs. Humanity in Times of Turmoil.

Between the price war and a pandemic lies some seriously tricky terrain for businesses to traverse. A cacophony of well-meaning voices, scream conflicting information, leaving behind the awkward moral dilemma: to invoice or not to invoice?

Good business practise would dictate that, logically, you should be chasing every penny owed to you. It’s yours by contractual right, your client has benefitted, you have delivered whatever product or service it relates to, and you will have incurred the costs of doing so. So far, so good, right?

If only life were so simple. The thing about having a business is that all business owners have one. It’s impossible not to recognise the challenge facing other business owners and employers when it’s the same challenge that currently faces you.

So, maybe, following an honest conversation with an important client, who is also under strain, you are now offering deferred payments, massive discount or not charging certain clients for services at all to protect your relationship. They will remember you when its over right? 

Maybe they will, but assuming you can continue to burn costs without your usual revenue streams for an unknown period, will they still hold the position, power or business that you need to pay the piper when things to return to ‘normal’? More importantly, will you?

At times like these, it’s hard to know how to reduce the burden on clients, colleagues and suppliers without devaluing your own business to the point of unsustainability through nothing more than well-meaning human decency. This is particularly true for small businesses where relationships are critical to the long-term future of the enterprise.

Small business owners are often closer to the day-to-day operations of the business, having a direct relationship with many of the clients. This can taint their view, creating opportunities for informal discussions where promises are made that can have longer-ranging ramifications than the current lock-down will.

Sometimes, the line between business and relationships is very thin, but there is always a line. Issuing nil invoices to support clients is noble but short-sighted. Businesses need cash flow, and the taxman expects to see believable invoices – even in times of disruption.

We all have a duty to our staff, suppliers, clients and families to at least try and secure our survival in these unprecedented times.

If you are providing a service that adds values and creates opportunity for your client base – charge for it. Review your fees if you must, but giving your primary product or service away for free, even temporarily, is a short walk to a ‘closed’ sign. Even if you survive, your client’s perception of your product value will have tanked, and it’s a hard climb to reinstate a paid product or service when people received it for free – at precisely the moment when it became most valuable to them.

Reserve incentives for easy-to-deliver services which cost little and use minimum resource, they can provide a useful passive income at times like these. These can be discounts, payment plans, early-bird discounts on services which will be reactivated when things get moving again. Barter, look for reciprocal deals, but please don’t offer freebies in attempts to buy loyalty. Loyalty is earned by reliably adding value. Know your value and respect it.

Every business is different, but the basics still apply – stall/shelve products or services that are currently undeliverable, focus on where you can add value and charge for it. Pay for the services you value to keep your business afloat and endeavour to keep costs low on all non-essential services – even the ones you like.

Frankly, if it’s not adding value to your clients in some way, then it’s probably not adding value to your business.  We have a long road ahead, and it’s going to be hard enough – there is no need to make it harder on yourself. Pay for what you get, and charge for what you can offer. Simples.