Monthly Archives: October 2019

How to collect the cash!

Posted on by
Reply
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

What have you learnt lately?

Posted on by
Reply

If, like me, you are a professional who is required to do a certain amount of continuing personal development (CPD) you will be used to going along to regular training sessions.

Sometimes they can be a bit of a drudge because they are generally all about updating our knowledge rather than gaining new skills.

As time goes on we can get increasingly stuck in the rut of doing the same things for the same people day in and day out. But the work pays the bills and we don’t believe we have a lot of work time to do much else in any case.

However, this type of thinking is a mistake in my opinion. After all, our working lives take up the majority of our actual lives so why settle for drudge?

One way to mix things up is to take bits of time out to do training to learn brand new things – maybe directly related to the work you are doing now, or completely different but complimentary to it.

Over the last year I have done 5 day workshops aimed at helping CIMA accountants understand the world of charities and not for profit enterprises. It was not a world I had particular experience of before but the workshops were fascinating.

My main reason for going was to help with my role as director of Wessex Community Assets but I would have gone along anyway because of my growing interest in community benefit models. 

I will be following up this training with 4 Community Shares Practitioner Training workshops run by COOPS UK with the eventual aim of becoming a registered practitioner. 

I am exited by the prospect of helping local community benefit societies raise money through community share issues to enable them to finance the setting up of shops, pubs and other community focused enterprises.

Slight re-training is enabling me to confidently move more into a world of opportunities I would not have envisaged a couple of years ago.

So my advice if you are stuck in a rut is to look around you and see what training is going on that tweaks your interest and take a punt.