“Creditors have better memories than debtors.” – Benjamin Franklin

Do you pay your bills on time as they arrive, before they’re even due, or do you wait until the last minute, maybe longer? How about the people who pay you, your clients or employer? Does that money arrive on time, or do you often need to wait – even needing to chase down your pay check?

As a small business owner, I lived every emotion.

To understand what fast payment can do for a relationship, on both sides, follow me on my Saturday morning routine in the mid 1980’s.

My first stop was the main post office on McDowell Street. This was a daily visit, but Saturdays were special. My relaxed mood let me almost smell which envelopes had checks inside. I would open those before even leaving the building. On a good day, there would be several envelopes from Midship Seafood, my good friends in Gloucester, MA.

My Krispy Creme on Independence is gone. So is Butler Seafood. Things change, but the importance of relationships remains. We are not yet a fully transactional society. I hope we never are. I still like to walk into a store, speak to the owner, and walk out with my purchase.
Later, I substituted fresh baked cookies for donuts. Our client, Otis Spunkmeyer, had the best. It was impossible for any Customer to say, “No thanks.”

Next was the short drive out Independence Boulevard to the Krispy Kreme at Hawthorne Lane. My arrival was timed to coincide with the “HOT” sign being switched on, meaning the glazed donuts were coming out of the fryer. I would buy a dozen and head back towards town. I’d then go in the back door of Butler Seafood on Morehead Street, put the box of hot donuts on the work table for the guys, taking a few with me into Lee’s office.

These weren’t appointments in a formal sense, or even knocks on the glass door back then. You just showed up and the conversation started. When the time was right, the business got done, but that wasn’t until the end when it seemed more like an afterthought, not like the real reason for the call.

“Let’s do one truck of flounder and another with half flounder, then the second half split between perch and snow crab,” Lee might say, “Split the sizing up as usual – more 5-8’s than 3-5’s or 8-12’s.”

That was it, with my order from Lee Butler, I could calculate, almost to the day (and the penny), when the Midship check would be waiting for me on McDowell.

My last stop, before enjoying the weekend, was at my office. I’d open the rest of the mail, make out the deposit slip and pay the bills from the “most urgent” pile, a big deposit would let me pay some even sooner. The large, impersonal vendors could wait, at least until they began to threaten service. The small guys, ones like me, got better treatment because I wanted to be important to them, just as Midship and Butler were important to me.

On Saturdays before the fifteenth and thirty-first, calculating and writing payroll was the final item on my list. I always found the money for payroll, none of our people ever missed, or even waited for, a paycheck. Other than me, of course!

It took that Saturday routine for me to appreciate the value of friends like Midship and Butler. Friends who paid fast, keeping me in business. That’s the origin of my Fast Pay Makes Fast Friends rule. I know our people appreciated the rule as well.

Midship’s office in Gloucester was small, above their processing room on the Fish Pier. Ned was the bookkeeper. Task-focused, Ned would complete every step of any transaction before going to the next. He would open an envelope with a payment from someone in the Carolinas, he would write a check to McIntyre for our share before he even opened the next envelope. If there were more payments involving McIntyre, there would be more checks to us. Money in – money out, all in one motion. That’s Lemon Aid Accounting at its best.

Of course Midship was not our only client. We had others to sell, but with many I often spent more time on the phone with them, chasing my money, than I had spent making the original sale.

Because of the way Midship paid us, I gave them more attention. My sales calls would often open and close with a pitch on Midship. Their samples were always packed near the top of my freezer bag.

Ben Franklin was right, “Fast Pay Makes Fast Friends”. It is also true that slow pay strains friendships. No pay destroys a friendship completely.

What has been your history with pay-cycles and friendships? Can you describe experiences where you have done more, knowing your reward would be sooner, rather than later?

Can you explain why some people pride themselves on being slow pay, or reduced pay, as a sign of their great business skills? Do you think they are driven more by their own greed than any sense of fair play?

How did you react when you were in a position of having “more month than money?” What did you do or say? How did you feel?

As always, the conversation starts here.

“In the ordinary choices of every day we begin to change the direction of our lives.” – Eknath Easwaran


I needed this video back then. Here are five mistakes and ten things to do right when you have a small business.