Let’s be super clear here – this is about a short pay to a supplier because either the job wasn’t fully done or wasn’t done to a reasonable level. This article is NOT about being unscrupulous and simply underpaying businesses and suppliers who do a perfectly fine job because you want to shirk paying your bills.
Short pay an invoice
In this scenario, you have someone who didn’t complete all the components of the task. For simplicity sake, let’s say you’ve contracted someone to make a wedding cake for you. It was to have been baked, iced and decorated. The cake turns up the day before the wedding without any decoration or icing. It’s just a plain cake.
Now, what we need to do here is go back a step. When you engaged the cake maker (and sorry to those cake makers who bake absolutely delightful cakes – not a slur on the industry, just had to pluck an example) – were you really clear on your expectations? Perhaps you saw one of their designs or a sample or provided a picture? Did you clarify it was an iced and decorated cake? Maybe they only do the base cake and don’t decorate that and they assumed you knew that and you assumed the opposite.
In any business dealing, make no assumptions. Don’t assume a product will be delivered or that the price is GST inclusive or in this case, the cake is iced and decorated. Ask. Now I know some people might look at you “well yes, of course, it’s iced!” but better to get a response like that than to assume incorrectly.
So, back to our scenario: You engaged the cake maker and yes it was crystal clear there would be icing, decorations and possibly a little statue of a bride and groom on top.
The cake arrives and it’s without icing or decoration. You ask the cake maker about this. The response might be “I’m so sorry, ran out of time, my dog got sick and I had to take it to the vet”. The excuse might be a good excuse (or a poor one), but none the less, you still have a naked cake. At the very least you’ll be ringing around everyone you can find at the last minute to decorate this thing. That’s time and money, plus of course, the cost to pay someone else to decorate. Remember that repair costs or part jobs may cost more than a full-service package.
A good business owner in this scenario would not charge at all, or charge perhaps only the materials it cost them to make the cake – absolutely not the full price.
At this point in time, you are now in negotiation mode. If they say they won’t hand over the cake until it’s paid for in full, here is what you need to do:
- Stay calm and professional. Yes, in this case, especially if you’re the bride, you probably are not going to feel very calm and certainly not composed. However, do your best. By getting angry, screaming or abusive, you might be wearing that cake on your face. Nothing gets achieved by negative behaviour and certainly no negotiation is as successful as it could be if you make it personal, aggressive or nasty. (In this case, tears might work.)
- Consider the facts. If the product is half done, then paying 50% might be fair. Naturally, we are working on the basis that you can use the half-made product. If not, then they either rectify and finish the job by the deadline, or you don’t accept the incomplete item. Be clear in your mind what you want to achieve and remember to be fair. You might want to pay nothing, but that may not be achievable. In this case, the cake decorator may say, no thanks, I’ll take it home and serve it up for afternoon tea. You might want to tell them where to put it, however, can you get a cake baked AND decorated in 24 hours?
- Clearly outline the facts. List what you will need to do to rectify the problem and, of course, those costs. We are talking a cake here, and you’ll be thinking on your feet, but sometimes you get advice prior of what’s happening and you have time to research, consider and plan your negotiation strategy.
- A negotiator is a bit like a salesperson. The person who can persuade and be pleasant and ‘sell’ the solution they are offering (possibly part payment) will do much better than the yeller, bully, abuser or tyrant.
- You may choose to start at a price point which is lower than what you’re prepared to pay. Don’t go so low that the other person is insulted or just walks away as they perceive you as unreasonable. A negotiation is usually just that and you might offer a figure, they counter off and then you end up some place towards the middle.
- Give them logic and emotion as to why it would be better to accept. Reminding them that some payment is better than nothing, particularly in view that the job is clearly incomplete and not what was agreed on. Remind them that taking it to the courts may not achieve the outcome they desire and it means costs and time plus, of course, the stress. Keep this also in mind yourself; you might pay a little more than you would like, but what is the value of your time and your peace of mind?
- Once you have a verbal agreement that you are happy with, confirm it in writing, so that it is in writing and ask them to confirm acceptance. Then once you have that, make the payment you have agreed to and it’s time to walk away. Of course, this step isn’t needed if the cake gets handed over and you hand over the relevant cash.
In life and business, we will always come across scenarios where we are unhappy. We don’t have to accept this, but we also need to be reasonable and let a sensible approach assist us in achieving the best possible outcome. If you know you just can’t deal with this (perhaps you’re the bride about to ‘lose it’) then get someone else to negotiate on your behalf. Be clear (but reasonable) about your expectations and then let them handle it. Sometimes by them being a little removed from the situation, have the right manner, approach and experience. This is why real estate agents are so useful; they don’t own the home they are selling; that experience and separation allows them to broker the best deal possible. If you are also in business, consider also your reputation, although I’ve no problem being known as firm but fair. Though, I must say, don’t bow to threats by the other person, or allow them to bully you. As an experienced business coach, I’ve seen that attempted as well. Sometimes the matter simply does need to go to arbitration, mediation or court. But before you do that, do your best to negotiate a fair deal.
Check out my coaching services for anything you need help with.