“Cash-Flow is King” is one of those expressions I have heard banded about many times. However, I didn’t realize the importance and critical nature of that statement till I did otherwise in my business in that regard. I am sure that yourself and many people who are reading this article have the view (as do I) that if you buy something, that you should pay for it.
At one point in my own business, I got into a bit of trouble with poor Cash-Flow coming from basically money owed for work done not being paid to me. With most of the debt it was honest & awesome people who forgot / missed it and needed a follow up.
This created some massive issues in my business in terms of things basically grinding to a halt and making my bills and heavy expenses difficult to pay. I learned the lesson “Cash is King” very quickly and worked hard with Lauren Watts (my Awesome Virtual Assistant) to get things under control. Like all things in business, even though I generally teach more Sales & Marketing – I have found myself helping many Small Business Owners like I was who had “On Paper” heaps of money coming their way, with less than $500 in their bank accounts.
Once I learned my lesson and got some help, it didn’t take me long to clean things up and improve this situation. Now, I have the Street Credibility to help advise on this issue and got some great tips for you all:
1) Strong Tracking and Systems: I use XERO as my Bookkeeping Platform and it’s very accurate in telling you what is outstanding. You need to really know this and have a great system. Any Great Accountant or Bookkeeper can help you set this up and train you in it.
2) Clear Terms: Say if you are invoicing, make sure the Terms are very Clear on there. Be it 7, 14 days or the like – be clear on your terms and stick to them.
3) The Right Clients: You may be in the position where you have clients that are happy to use you as long as you don’t chase up your money. This doesn’t happen often, but I have seen many great people undone by people basically using them for Free Services. If you have someone doing this to you, make sure you wind up that agreement – damage control is critical in these cases. Also make sure they aren’t overusing you – not good for your family and very unfair. The same goes for you too – what goes around comes around. Pay your bills on time, so you can expect the same back from others.
4) Automated Follow Up Systems: XERO has this great 3rd party add in called Debtor Daddy (strange that it’s not part of XERO itself). It basically sends up follow up emails to people reminding them to pay prior and if they miss it. As most people are awesome and honest like us – it really helps.
5) Phone Calls and Follow Up: It’s great to have someone (like I do with my awesome VA Lauren) too follow up on people and give them friendly reminders.
6) Reasonable Understanding: As most people are awesome, there are at times where your clients just can’t pay on time due to matters outside of their own control. I always like to be nice and kind – give reasonable flexibility and look after them as much as you can within Commercial Reality.
I trust my little guide helps and this thinking has been great for my business. You are awesome, you work hard and you deserve to get fairly paid for being Awesome Small Business Owner and Entrepreneurs!
Thank you from Edward Zia – Marketing Mentor and Man Who is Loving Finance now!