Are you an April fool?

getting paid

Over the years I have met business owners who offer a great product or service but are really struggling with their cash control.

One of the reasons is exemplified by a conversation I had the other day with just such a business owner. They have no problems finding the right customer and do a fantastic job for these customers.

However, the business owner has a real stumbling block when it comes to invoicing and debt collection. Firstly, they hate the process of invoicing itself – it is a chore they put off as long as possible. Secondly, once the invoices have gone out they are very reluctant to chase for the money owing to them.

In my opinion they are being an April (and every other month of the year) fool.

They are working hard but because they are not following through, and collecting the money owing to them in a timely fashion, they are struggling to pay their bills.

What makes the situation worse is that they have employees they MUST pay every month irrespective of whether the business is paid or not.

There is a clear lesson to learn here – if you are unable, or unwilling, to deal with the discipline of invoicing and debt collection you must find another way of getting these jobs done. If you don’t, you may lose your business.

So what are the alternative approaches you can take?

Firstly, many bookkeepers are more than willing, and able, to take on the invoicing and debt collection roles for you. The benefits of delegation will way out-weigh the costs.

Secondly, you may already have a member of staff on your team who can take on these jobs.

Thirdly, if you really have to do these jobs yourself, you must change the way in which you approach them. Have a very clear procedure detailing exactly how often invoicing should be done (at least once a week would be my recommendation), block out time in your diary every week devoted to invoicing and debt collection, and understand that any work you do for clients is worthless unless you are paid for it!

For extra help with invoicing and debt collection please download the ‘Getting Paid’ guide on my website

Good luck

Fiona πŸ™‚

Put the spring into your step!

unexpected-friendsI have just been for a lovely walk in the spring sunshine and I have to say I feel good!

Many people use their renewed energy to do some spring cleaning. Suddenly streets are filled with car washing, lawn mowing and window cleaning activity.

As it is good to give our homes a bit of a spring clean and declutter, so it is good to regularly review our businesses to see what needs to be cleared out.

I come across plenty of businesses who spend cash on new filing cabinets, folders and storage space because they are being swamped with paperwork – invoices, payroll reports, government letters etc.

So what can you do to make sure you don’t fill your offices unnecessarily with paperwork?

Firstly, check to see how long you need to keep specific government and tax related records. In most cases the limit is 6-7 years. Anything older than that can be properly disposed of. There are great companies out there such as ShredIt who come to your premises and make sure that any papers are disposed of securely and completely.

Secondly, there are many systems these days which allow you to scan and save important documents in a properly organised, virtual filing system. This will allow you to save digital copies of any documents and dispose of the hard copies. The initial work to digitise past records may be a bit of a pain, but once over that first hurdle you should find it easy to digitise documents as they come into your offices.

Of course you will need to ensure that you have robust back up systems – but then you should have those in place anyway.

As part of the clear out process it is worthwhile checking that you are up to date with the statutory data protection requirements as they apply to your business.

Happy spring cleaning!
Fiona πŸ™‚