Collecting the cash

Posted on October 25, 2018 by Fiona

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Piggy Bank

In these turbulent times it is more important than ever to be on top of cash collection. However, many small business owners find it a real challenge to chase customers who are late paying.

A phrase we hear often is, “They’re a really good customer, so I don’t want to annoy them by chasing for payment”. Let’s just analyse that sentence for a minute. Why are these customers good for your business? Because they allow you to do lots of work for free? Surely, a good customer is one who appreciates your efforts and is happy to pay because they value you. If you have done the work you agreed with your customer, to the level they expected, why should they not pay the agreed price in the agreed time period?

So don’t be shy about collecting YOUR money.

Other problems we see regularly are:

– Not setting payment terms up front

If you have not agreed when the customer should pay BEFORE the work is done, you will struggle to collect the money in a reasonable time frame. Make sure your terms of engagement/purchase confirmation clearly state when you expect to be paid.

– Setting unnecessarily long payment terms

Don’t assume that you have to offer customers 30 or 60 day payment terms. Start from a position of offering zero payment terms and only offer extended terms if there is a commercial advantage in doing so. Bear in mind that even if you offer 30 day terms you will most probably be paid later than that. As you don’t know the financial position of all your customers the only safe money is the money in your bank account.

– Not sending invoices out promptly

If you do not send out your invoices as soon as the work is complete, you automatically build a lag before you receive payment. Invoicing is a chore, but regular invoicing is vital to achieving financial stability.

The most common reason small businesses fail is because they run out of cash.

The most common reason they run out of cash is because they do not collect the money they are owed quickly enough, or allow debts to go bad.

Make sure you business succeeds by being cash collection savvy.

🙂 Fiona

Getting to know you!

Posted on October 1, 2018 by admin

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“Piglet is so small that he slips into a pocket, where it is very comfortable to feel him when you are not quite sure whether twice seven is twelve or twenty-two.” This Pooh quote is all about having someone you can call on to help when you need it – and don’t we all need people like that!

Successful business owners surround themselves with people who can do the jobs in their company that they cannot do, so they can concentrate on their own strengths. Obviously having employees is one way of filling the skills gap – another is to use consultants and other professionals.

So how do you find skilled professionals who will add great value to your business?

For me referrals and recommendations are the only way to go. If someone I know well has introduced me to someone they have worked with before, I can shortcut the due dilligence process. In my experience good people hang out with other good people.

I make sure that I network in groups that help me to find great people I can use myself and recommend to clients and other contacts. I love meeting new people and networking groups are a great way to keep in contact with my strategic partners regularly. Clearly networking can require quite a lot of time but these days I can enhance my networking by using online tools.

In this respect I like LinkedIn because it allows people to recommend me, and I can read recommendations given to people I might be thinking of using, in a quick and easy to use format. I can also catch up with what’s important to them through blogs and posts.

If I have had a great service from someone I make sure I recommend them so that their profile on LinkedIn is enhanced – I also ask people I have worked with the recommend me. When I get a good recommendation it is a great morale booster and helps others to get a feel of what working with me would feel like.

It’s easy to put networking on the back burner when we get busy but we must continue to do the things that got us busy – or we will experience periods of slack time when one job comes to an end and before restarting our networking re-fills our time again.