Every accountant preaches that cash is the lifeblood of a business.
For a long time the profession has been a voice in the wilderness as everybody else has focused on “turnover, turnover,turnover” .
The finance department was sacrificed by sales executives in sharp suits with an eye on their commissions and year-end bonuses.
As is often the case in the cut and thrust world of business, things have come full circle and the men and women dressed in sober blue are back in the spotlight telling everybody that they were correct all along.
Everybody is in the same boat so there is no stigma attached to chasing small monies, and getting tough is no longer seen as petty or weak
Business captains with eyes fixed on turnover and profit are rapidly converting to the fundamental mantra of the bean-counters, and it’s all about cash generation, collection and retention.
One small firm spent six weeks focused on recouping old debts, the sort that are overlooked when money is no object and the coffers are bulging.
The result yielded around £30k, and most of their customers shrugged and stumped up without too much fuss.
Bringing in 4% of annual turnover is not bad for a member of staff who slotted it into her workload at no extra cost to the company.
“That’s all very well,” I’m sure you’re asking yourself, “but why should they pay up now just because your person in accounts rings them up?”
The key is to remember that everybody is in the same boat so there is no stigma attached to chasing small monies, and getting tough is no longer seen as petty or weak.
It lets them know you are viable and efficient.
Survival
We’ve all walked the fine line between antagonising customers and collecting overdue debts.
Now the rules of the game have changed.
Collecting cash isn’t about goodwill – it’s about survival for some, and for others simply bringing back what is legally and rightfully theirs.
No longer can you let righteous indignation and threats to take custom elsewhere keep you beholden to a poor payer who racks up 180 days of credit as a rite of passage.
Remember: if your service is good they won’t switch to another supplier, in spite of their threats and howls of protest when you push for payment.
These idle threats – and in the vast majority of cases they ring hollow – are bullying, plain and simple, and need to be met with a firm but polite response.
We all know that the kid who faces down the playground bully earns respect and doesn’t suffer any further hassle.
