Chasing invoices

An advertiser signed for a page and the page ran. The issue went out to the shops, and my invoice sat in somebody's in-tray while I waited for it to turn into cash. In the same weeks, Stella paid two bills by the day they were due, every time: the printer, and the automated mailouts to subscribers.

In publishing, the money runs backwards. The printer wanted to be paid first. Most advertisers paid after their pages ran, and the shops paid after the copies sold. By the time the money for an issue came home, I was already paying for the next one. The exception was the advertisers who signed for a year up front. Their money arrived before the pages existed, and it only carried an issue when enough others had agreed a similar deal. For most of Stella's life, the gap between money in and money out was the job underneath the job.

Even a paid invoice took its time. In those years, almost everyone in Port Moresby paid by cheque. Every cheque meant a long wait in a bank queue to deposit it, and then a week at least, sometimes more, before it cleared and the money was Stella's to spend. Getting paid had two finish lines, the cheque arriving and the cheque clearing, and the printer cared only about the second. Looking back on it today, it feels like another century.

Chasing invoices never had a week to itself. It shared time with following up delivery dates from the printer, and it coincided with the photo shoots and interviews for future issues, each running on a different clock.

For Stella’s first twelve months the printer wanted cash on delivery, and at Issue 6, I negotiated thirty-day payments. Thirty days to pay only helps a business when the money owed to it arrives inside the same thirty days. When it arrives at sixty, the founder carries the gap herself.

The mailouts ran through an account in my name. Subscribers paid Stella before the issue existed, and I treated that account the way I treated the printer, paid on time whatever else was still outstanding. Those two bills kept Stella in readers' hands, so I protected them first. Shop sales were the slowest money of all, about two-thirds of the cover price coming back only once the copies had sold.

The chasing itself was by emails and phone calls, and a meeting wherever I could get one. Port Moresby is a small city, and the person I emailed on a Tuesday was often someone I would see around town that weekend. I understood that the person who signed for the page was rarely the person who paid for it. My invoices moved through approval chains and accounts queues, and the marketing manager who loved the issue often waited on that process as much as I did.

I learned quickly to keep the invoice and the handshake in separate pockets. In practice, that meant being grateful for every payment when it came, and getting inventive while I waited. I sold year-ahead deals so some of the money arrived before the pages did, went after sponsors who would carry a whole cost line, and built new income around the magazine, RUNWAY among it. In the leaner stretches, I took editing work on the side and went back to teaching English to cover my own costs, so Stella’s money could stay with Stella.

Late payment runs downhill. When a big customer pays late, its suppliers pay their own suppliers late, and somewhere near the bottom of that hill sits a small business with an invoice, and a supplier of its own waiting to be paid.

Lisa wrote to me during week four that cashflow is “such a challenge for small businesses”, and she wished “the big suppliers understood when they wait until day 30 or beyond to pay an invoice”. I was buying thirty days from my printer. Lisa is the one waiting thirty days and more. A small business usually sits in both places at once, owed by the client on one side and owing the supplier on the other.

I sat in both places too. The person who waited longest for me was a photographer, who shot the cover of Issue 18, the issue that never ran. When I started clearing my debts, theirs was the first bill I paid.

If you’ve run a small business, you know the particular quiet of an invoice at day forty-five, when one late payment decides who else gets paid that fortnight. At Stella, two bills always left on time, printing and distribution. Everything else waited on somebody, and for a while, somebody waited on me.

What a loan costs once the interest is counted

Best

Amanda

P.S. What’s your view on today’s newsletter? Did I miss something out that you’d like to share? Write to me, [email protected]. I may not get back to you, but I will try to read what you send in.

Wild Money is general information only, drawn from my own experience and research. It isn't financial advice, and nothing in it is a recommendation to buy, sell, hold or manage money in any particular way. What worked for me won't necessarily suit you. Please seek advice from a licensed financial adviser before making decisions about your own money.