Featured Coaching Training: 7 Proven Principles for Managing Your Accounts Receivable
Too many small business owners continue to extend credit to customers who are late on paying their bills. This series will outline some of the best principles for managing accounts receivable effectively.
Featured Coaching Excerpt - Notes & Transcript, Part 1
Principle #7: Collect Fast Or You Are Kicking Your Own...
Lesson Nugget: If you do not collect money quickly, they will eat away from the profits of the next month.
Editor's Note: Your payment collection cycle needs to double in speed or you will make ulcers bleed.
Lesson Nugget: If you get to the end of your money before the end of the month, that's a problem!
- Principle number seven, collect fast or your are kicking your own--
- [Voiceover] Hey!
- Hey there.
- [Voiceover] Hey-ya.
- Okay, so Clay, what do you mean collect fast?
- If you don't collect money quickly, you are now eating into the profits of the next month. And if you do that for two months, now you have no profits, if you do it for three months, now you're out of business. And most businesses do not have enough liquidity, enough cash, enough money, enough coinage, enough monetary goodness, enough cheddar, enough lettuce, enough mon-ay, enough skrilla, you know, they don't have enough money to just sit there and let the debt pile become higher and higher and higher. Now, if you're listening to this right now and you're like, "Bro, I have like a gold chandelier, you know? "And I, like, I use diamonds just to cut meat 'cause it's "the hardest surface in the world so I have a diamond "knife I use to cut my steaks, and I don't even eat those "steaks 'cause those are beneath me and I feed those "steaks to my dog who's a purebred, right? "And then my dog, who's a purebred, eats lobster tail, "only when he's not eating steak. "And that's just because that's beneath me. "Now for me, personally, I only eat escargot, fresh. "It has to be flown in every day, you know what I'm saying? "And I'm gonna have my Evian water on my custom hand "painted tabled that I had made from the forest using "recycled mahogany wood pulled from the--" You know what I'm saying? If you're that kind of person, then forget this episode. But for everybody else, you gotta collect the cash and quit feeling bad about it!
- So you have to collect the cash? But not only collect it, but collect it fast. Why is collecting it fast important?
- Because you have a fast month. If you get to the end of your money, and you don't, if you get to the end of your money before the end of your month, that's a problem, check it. If you get to the end of your money before the end of the month, that's a problem, right? I mean, this is a bad deal, this is not a healthy deal. And so many business owners, I am not exaggerating these numbers. Thrivers, I've met people like you at workshops. You've come to Tulsa, we've talked, we've connected, we've marinated, and you know what? You're not alone. What happens, you are allowing the people to take advantage of you, stop doing it. Don't get into the banking business. You gotta collect that money now. Ha!