Featured Coaching Training: 6 Thunder Moves for Collecting Accounts Receivable
Struggling with cash flow and collecting accounts receivable? In this series, we'll teach you super moves that will improve your business' collection practices and ability to ensure that money is coming into the business for everything you sell.
Featured Coaching Excerpt - Notes & Transcript, Part 1
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Collecting Accounts Receivable: Thunder Move #1 - Get paid in advance - Collect payment in full, get deposits, collect half and get some cash coming into the business.
Lesson Nugget: A large percentage of your customers will pay in advance if you ask them to.
Collecting Accounts Receivable: Thunder Move #2 - Incentivize early payment - Offer a discount or promotional item for early paying customers.
Lesson Nugget: A larger percentage of your customers will pay in advance if you incentivize them.
Collecting Accounts Receivable: Thunder Move #3 - Cash on delivery / Collect at the Time of Delivery
Lesson Nugget: You have the most negotiating power and leverage just before the time of delivery.
Collecting Accounts Receivable: Thunder Move #4 - Add in a financing charge into your agreements and contracts
Lesson Nugget: Charge for all the work you do, even the financing.
Collecting Accounts Receivable: Thunder Move #5 - Dramatically increase your fulfillment or product delivery and creation cycle.
Lesson Nugget: Delivering the product or service faster means getting paid quicker.
Collecting Accounts Receivable: Thunder Move #6 - Make it easy to do the right thing (credit cards, debits cards, bank draft, paypal, cash, etc..)
Action Step: Look at how your local DMV (Department of Motor Vehicles) extends payments options to clients and do the opposite of this.
A Van Down By the River:
Editor's Note: This might be the man inside of the van...
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- ♫ Bring it down down down ♫
- Alright, Clay, thank you for getting into these specific thunder moves, I wanna go ahead and make sure we recap them and get some action steps for the Thrivers.
- If Thrivers need help setting up Paypal guess what we have trainings coming for you. If you need help on settin' up Square, guess what? We have trainings comin' for you. If you don't know what to do click the info at Thrive15.com, ask us a question, we'll help ya out, we'd do anything for our Thrivers okay. If you wanna come to a physical workshop and have our elite team of web genius' show you on the big screen how to do it, we will do it but don't have an excuse and you're going "It's too expensive to fly out to Tulsa. "I realize it's a tourism hot bed but I can't afford it." Unplug your cable, just get here we'll help you. You've gotta stop if that's you, if you're not collecting money quickly we're here to help ya.
- Okay, so let's go through these Thunder Moves. Thunder move number one, get paid in advance. Okay so collect payment in full, get deposits, collect half and then get some cash coming in for the business for the deposit to do the business.
- And here's the`dugget on this okay. A large percentage of your customers will pay you in advance if you ask them to. Large percentage will say if you wanna go ahead and pay in advance for the year I mean how many people watching this right now have paid in advance for your insurance to get a discount or you've paid in advance for something, season tickets or whatever. You did it to get a discount a lot of people do that. I mean not everybody but a lot of people do it.
-Even the government. "Would you like to pay your taxes in advance?'
- I would prefer if you didn't mention that again.
- Thunder move number two, incentivize early payment. Offer a discount or promotional item for early paying customers.
- A large percentage of customers I'm not gonna make up a statistic and go yeah 22% of customers will pay No I don't have a statistic for this but I'll just tell ya from my personal experience if you said "Hey just so you know if you pay "in advance you can go ahead and" if you're a homebuilder if you go ahead and pay in advance we'll also include a flat screen TV. A lot of people do it so just figure it out do the math, incentivize it, incentivize good behavior.
- Thunder move number three cash on delivery collect at the time of delivery.
- You have the most negotiating power folks. You have the most negotiating power and the leverage just before you deliver or at the time of. So as an example back in the day when I had my DJ company you had to pay a deposit and then you had to pay the remaining balance before we started DJing for your wedding. Why, because if you didn't pay, right we would just go hey we can't DJ tonight. And guess what people will always pay. After the wedding though, after you've already DJed and delivered the entertainment services the excellent entertainment sound and lights and the hosting guess what? People don't feel the need to pay you. So you have the leverage right before you deliver the service, real talk.
- Thunder move number four, adding financing charges into your agreements and contracts.
- Yeah, charge for all the work you do. You gotta charge for all the work you do even the financing. If you're doing financing that is work. If you're gonna finance somebody and you're managing that you gotta charge for it. If you're hiring somebody, if you hire Doug and you're going "Hey Doug here's what "I want you to do. " I want you to collect the money from the people." And Doug goes "Well what else do you want me to do man?" "Dough I want you to collect money from the people. "People who owe us money, accounts receivable." "Well man anything else you want me to do man "cause I'm good with my hands I can make "a bird feeder outta like a coffee cup " you know what I mean? "I can make a bird feeder out of a, you know " I currently live in a bird feeder you know "what I'm sayin man like I can do anything with a bird feeder." "No I just want you to collect money "that's all you do, accounts receivable." "Well man that's like, that's only two words. That's all I'm gonna do is two?" If that's a job that you have then you need to charge for it 'cause Doug's gotta get paid somethin' right? "Hey man you want me to do anything else "out here 'cause I can make a bird feeder "I can make like a whole planet out of like "foil man, you know what I'm sayin'? "I can do, I'm good with my hands you know what I mean?"
- Okay then thunder move number five dramatically increase your fulfillment or product delivery and creation cycle.
- Yeah I mean if delivering the product or service faster means you're gonna get paid quicker okay. But if you got that muscle head culture going on where "Bro, like we would totally like do your "wood floors but tonight I'm carb loading "because I got a big competition and like "I gotta cut next month but I'm carb loading right now "'cause I'm just like right, I'm almost at 220. "How much you bench bro?" "I just wanna know when you're gonna get started." "Oh, so well you wanna stack your proteins "you know what I mean?" If that's your culture you've gotta fix it. You've gotta focus on collecting money. I'm just tellin' ya, I'm just happen to know for some reason a lot of muscle heads in the construction industry.
- And then thunder move number six make it easy to do the right thing. Offer credit card payment, debit card payment, bank draft, Paypal, cash.
- Yeah if you're a doctor reach out to Care Credit. if you're a business you can reach out to Synchrony. That's a company that does finance items. Many jewelry stores have multiple financial options you can do Paypal, you can do credit card, you can do automatic recurred billing. There's ways to do it but figure it out. And if you don't you queue it up will live in a van down by the river. And you'll be in your sweet sweet van all by yourself your internet's disconnected but some reason you have the 8-track to this song and you put it in there and you just sit back there your van's got a door that's missin' another homeless man has now climbed inside the van he wanted to know if he could live there with you and you said "Because I couldn't collect the money "seems like a reasonable plan let's split expenses "and listen to Wham! together this careless whisper "and I regret having not applied these principles." That's what's gonna happen.
- Clay thank you for sharing with us today helpin' all of the Thrivers that are on the site get on the right track for collecting their accounts receivables and really, ultimately helping them optimize their business.
- And in all sincerity Thrivers get out to a workshop just email firstname.lastname@example.org and do me a favor, we're just a couple thousand I can't tell you the number 'cause we're good stuff happening we got a lot of investors I can't tell 'em all the secrets but we're just a couple, just a few people away a few thousand people away from me wearing a jersey on every single training. I will never wear a suit and tie again ever, ever. Just all you can do, do your part. It's like the Jerry Lewis telethon. Tell a friend, get 'em on the site only you can convince me or help me 'cause I'm sayin' Dr. Zellner you notice he always wears a soccer jersey? I'm that close to just droppin' the mic and wearin' a jersey every day not even kidding.