So how can such a critical element be overlooked?
It’s claimed the organisers placed an order that wasn’t fulfilled by the water company because they didn’t receive payment in advance (as per their contract terms).
The blame game at this stage doesn’t solve anything – but here’s some advice to prevent critical errors of this nature damaging your business:
- Yes we know you’ve heard it before but…
never ASSUME… it makes an ASS out of U and ME!
Make a point of reading new contracts and fully understand the terms of them – it’s OK to ask questions if you don’t understand.
If you can’t spare the time then delegate this to a competent employee who can ‘flag’ any unusual terms as and when they arise.
- Good ‘Purchase Order’ controls are essential as this is the point at which your businesses cash is being committed. There must be a clear ‘authorisation’ process.
- A diligent Finance Department/Finance Director will implement these types of procedures and controls and ensure the cash is available to make the purchase when required and that all supporting paperwork is processed in a timely manner.