Small businesses plagued by nonpayment

'We have lost between $10,000 and $15,000'

ESTHER ASHBY-COVENTRY
Last updated 05:00 19/02/2013
calvin gabites
ESTHER ASHBY-COVENTRY/ Fairfax NZ
TIME FOR CHANGE: Business owner Calvin Gabites is sick of carrying the cost of bad payers.

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Small Timaru service and repair businesses are struggling to survive the cost of carrying bad payers.

Stan's Auto Electrical had outstanding customer debts of $54,000 last October. With a team of only three, including the owner and his wife, carrying such debt was a major burden. So far this month the company is owed $11,000.

Most people never budget for appliance repairs, according to Calvin Gabites, owner of Gabites Appliances.

He estimated every month there were up to 10 people who had not paid for three months.

The bills were often quite small, between $60 and $150, and were sometimes written off because it was not cost-effective to go through a debt collection agency or the small claims tribunal.

"Over five years we have lost between $10,000 and $15,000 which goes on overheads.

"It kills a lot of small businesses," Mr Gabites said.

He said he could cope with slow payers but non-payers made him so angry he was considering providing his servicemen with mobile eftpos machines so work would be completed in people's homes only after a payment was made.

A spokesperson for Stan's Auto Electrical, who preferred not to be named, said sometimes getting paid was like getting blood out of a stone and it was a constant struggle to stay afloat.

During tough times he has had to use his bicycle to get to work because he did not have enough money for petrol.

What really annoyed him was seeing his debtors in the pub enjoying a meal and a drink.

"Slow payers are not as bad as no-payers."

The spokesman said his company has to use credit for parts if they are not paid, which had a domino effect on the next business in the chain.

A customer told him it was easier and cheaper to get a car fixed at a garage and pay it off with no interest payments than go to a bank and borrow it.

Caroline Mitsubishi owner Phillip Downing said his company tended to have customers who could pay, though some would take longer to do so than others.

Dentist Tony Page has noticed a few more outstanding bills in the last year.

"It's one of the costs of business."

He said there was a group which was leaving it longer before seeing him when in pain, which often resulted in a more expensive invoice because they then often had to have a tooth removed.

Nagging seems to work for Tony Allnutt, of Allnutt Plumbing.

"We always get on to it straight away ... Nagging works eventually; we're only asking for what is ours."

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- The Timaru Herald

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