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This business coaching session teaches an overview about collecting cash from customers.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: Step 7 - Determine a weekly time to verify whether you have been paid or not.
  • Action Step: Schedule a weekly time in your calendar to review your financials.
  • Lesson Nugget: Step 8 - Determine the weekly time that you will meet with yourself or your accounting team about collecting the cash you are owed.
  • Lesson Nugget: Step 9 - Determine a system for dealing with late payments.
  • Idiot Moves People do When They Owe You Money: 1. Didn't Know.
  • Idiot Moves People do When They Owe You Money: 2. They act as though they are being taken advantage of.
  • Idiot Moves People do When They Owe You Money: 3. Question your motives.

- So, we're talking about creating a system for collecting cash for your customers. So, now that you have the checklist, step number seven is this: determine a weekly time to verify whether you have been paid or not. - Well, what happens is, if you don't do that, you get so busy that you didn't check your account balance. You get so busy you didn't figure out whether you got paid or not. You have to have a specific time where you sit down with your team and you say, "Team, how much money did we not collect from customers?" - Do you like to do that on Monday, Friday, Wednesday? Does it really matter? - I do mine on Fridays. - Every Friday? - Every Friday I do it at 11 o'clock, between 11 and 11:30 and then when I'm done with my 12:30 meeting, I usually will do it again at 12:30 if I need to. So I have an 11 to 11:30 blocked out and I also have a 12:30 to 1 o'clock time blocked out. But, that's just right now. - [Jose] Sure. - On a bigger principle, I do block out hours of time each month to look at some certain financial documentation. - [Jose] Okay. - And you need to set it in your calendar and you put it, like, in your calendar. 'Cause most of my financial review stuff I try to do in the mornings so I can be alone and I can have those hours to think about it. So, just right now, as an action item, go ahead and think about, you know, when are you going to block out time to do this? So go ahead and schedule it. When are you going to, go ahead and schedule it, it's very very important we do this. - So now, step number eight is hand-in-hand with step number seven. Step number eight: determine the weekly time that you will meet with yourself or your accounting team about collecting the cash you are owed. - Now this is, now I wanna make sure you guys understand the distinction between these two different steps, okay? Because the first step here is you wanna determine a weekly time in your calendar to ask yourself whether you were paid or not. - [Jose] Right. - That's very different from talking about, hey we need to collect what is going on. - [Jose] There you go, okay. - Why isn't this person paying? So you can have all of these meetings at one time. But I know a lot of businesses that are like, "Well, we weren't paid." "Well, how are you gonna collect it?" "We don't have a plan for that." But they just kind of, like, know they weren't paid. You need to have an aggressive plan. So there's some things, right? I mean, I literally, we had to send people to debt collection before. You have to figure out a payment plan with a customer, maybe. But you've gotta have a very aggressive mentality and have a strategic plan about how you're gonna get collected if you're one of those people who has unfortunately found yourself with a lot of customers who owe you money. - Yeah, you gotta write it down and you keep yourself accountable. - Yup. - And keep them accountable. Step number nine: determine a system for dealing with late payment. Why is having a system to deal with late payments essential and important? - Wooh! Yes! We're having a party! This is the kind of thing that we need to get excited about. It's a barrel of fun. It's a barrel of fun when you're getting paid here, folks. I'm telling ya, it's exciting. Seriously, when you're getting paid, it absolutely is a barrel of fun. But you know when it's not? It's not a barrel of fun when you're not getting paid and it's also not a barrel of fun when you're thinking about making a policy to deal with people who intentionally do not pay you on time. - [Jose] Man. - So this is what's bad: when you're trying to collect money, and Jose, I'd encourage you to put these up on the screen, this'll huge for the subscribers. - [Jose] Sure. - There's three reactions you're gonna get from customers when they owe you money. - Uh huh. These are fun. - And I had a guy this month, who by the way, played this game with me and this is not unusual. - Are they super moves that they play on you? - They are like anti-super moves. These are idiot moves. There's three idiot moves they do, okay? - Okay, I like the title. - Idiot move number one is they go, "Oh, I didn't know. I didn't know." And it's like, now they've just given themselves 30 more days. So you've sent them the invoice and they're like, "Well I didn't know." And so, "Well, as soon as I get an invoice "I'll go ahead and pay you." See, they just created another 30 days. - [Jose] Mmm. - "I didn't know." The second is to act as though they are being taken advantage of. - Hmmm. - So they will put their stress on you. So go, "I can't believe you would call me at work "to tell me about this. "Do you realize, I mean, "I'm just trying to take care of my family "and you're out there calling me at work, "interrupting my job." - [Jose] The guilt trip. - No, they totally do it and it's a total smokescreen, right? - [Jose] Sure. - And then, the third move, the third move is to question your motives. - [Jose] Mhm. - All the time. So they'll say, "Are you guys hurting, financially?" I had a guy literally this week say to me, - [Jose] You're kidding. - No, guy owes me a couple thousand dollars. And he says, "Yeah, I mean, I didn't know that I owed you, "but are you hurting financially that bad "where you need a couple thousand? "I mean, is that the issue?" And I'm like, "No, but if I didn't collect payment "from everyone like this situation, "I would be hurting financially, so you need to pay." "So, are you okay financially? "I mean, is this a deal..." And he goes through all the moves. He tries to do the personal attack move. - [Jose] No personal illness on himself? - Seriously, yeah, but it's all about, like, I didn't know first, "I didn't know." And then it's immediately like, "Oh, well thanks for telling me. "Are you guys hurting for cash, is that the problem?" And I'm just saying, this is what people do. And meanwhile you have to have a system that's a process, a written down, documented system that you will follow regardless of what they say. - And don't drink their Kool-aid. - Yeah, so this is what the systems I recommend for you. - There you go.

Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Action Step: Charge a late fee for each day payment is late.
  • Lesson Nugget: Have a system where you do not have to invoice.
  • Lesson Nugget: Step 10 - Determine the right person to collect the cash.
  • Story Time:
  • Lesson Nugget: The person assigned to collect payments should have an aggressive personality, not a passive one.
  • Super Move:
  • Editor's Note: Email us at: info@thrive15.com

- If somebody pays late, for every day that they're late I would charge a flat fee. - [Co-host] Okay. - So you say for every amount, every day you're late, there's a $20 late fee added to it. So if your late for 30 days it's, you know, $600. If you're late for-- and I would do something like that. Or I would do a flat percentage, you know? - [Co-host] Until the money appears? - Yeah, I would do that. Or I would have the zero tolerance people know that you'll take them to court every time. You know what I'm saying? But you need to have some sorta-- But before you even need to have those late payment policies make sure you've asked yourself, do you even need to accept payment after the service's rendered? I recommend that you, if at all possible, no matter what you do, try to have a system where you don't have to invoice people because invoicing people requires you chase checks. Not good. - Perfect. And our final step, step 10: If you do have to collect money or payment, step 10 says "Determine the right person to collect the cash." - [Clay] Now I have a little bit of a story on this and I want to make sure that everybody hears this story, so this is a true story. - [Co-host] Here we go, here we go, here we go. - I was working with a doctor's office and there was this lady, who her job was to run the office, great lady, sharp lady, hard worker. There was a guy that she'd hired to collect money and he is like, typing and he's like "Oh yeah, okay. Oh, you're exactly 2.2% growth" "this week versus last week." "Our sales are up 1.7%." "Um, our accounts, uh, uh, uh" "receivable is at this much." He just loves the numbers, and she goes "Um, could you go ahead and collect money" "from people who owe us?" And he's like "Oh, yeah. Absolutely." "Um, I will do that. Okay." "And what would you want me to say to 'em?" And she goes "You'll need to say," "You know you owe us some money," "and I'd like for you to go ahead" "and pay us what you owe us. Debit card or credit card?" And he's like "Oh, okay. Well, um, when I call them" "if they're not available, what do I say?" And she just, - [Co-Host] Seriously? - "Well you'll need to say this" and he's "Oh, an, okay." "And if they don't respond what do I do then?" "You'll need to call them again." "Oh, I, I respect people enough" "were I don't really wanna, have to call people all the time, I don't harass people." And she goes "They owe us money." "Well, I just feel like if" "you look at it from their perspective," "I mean, I feel like, what, isn't that harassment?" "I mean can I legally call them at work?" "I mean is, is there" "What email should I send?" She says "Well you need to call, text, and email" "till you get payment." "Well I would, do I use my personal phone?" "Cause I don't know that I feel comfortable calling" "from my personal phone." "Can I get a separate phone?" And he's just wearing her out with questions. So that guy, and I hate to say this, was not the right fit for that job. He's not aggressive. If you're gonna have someone collect money don't give it to your passive, you know, beta, analytical accountant person. There's good people out there who are passive. But you don't want them collecting your money. You want the guy collecting money who's like Johnny Leadpipe, and he's like "Hello, yeah," "So is this Craig? Yeah, Craig. Check it out," "you owe us $110," "and I want to make sure this doesn't serious." "You know, I want to make sure" "it doesn't get a little crazy." "Um, go ahead and you wanna do debit card or credit card?" "Uhh, well I didn't know I was--" "Yeah, you definitely do." "You came in here, you signed off on--" "I'll be at you house tonight or tomorrow." "Debit card or credit card, what do you want to--" And you know, it's like the kinda guy that, you know you don't want some-- Don't get me wrong here, you don't like threaten people but you want to have the kind of guy working for you in this position who would say, the kinda guy who thinks these-- Inner dialog, he wouldn't say it but this is what he's thinking. He's going, "Now if you don't pay us," "you know, I could--" "Hypothetically I know a guy who would" "make you sleep in the river, you know what I mean?" "Put the concrete shoe on you, you know what I mean?" And they're like, "Did I say that out loud?" "I was just kidding. Ha, ha, ha." "I would never do that," "but I know people who would do that." "I wouldn't actually, physically wanna hurt you" "if you don't pay your money," "but, but I could. If you know what I mean?" "You know what I mean? Ha, ha ha!" "So let's just go ahead and pay, you know?" "Cause I wanna--" You want the guy, who that you feel-- You want the guy who's collecting money to be the kinda guy who you visually assume he has a leadpipe in his hand. And he's ready to crack your skull with it. That's the kinda guy you want in terms of collection. You want somebody aggressive. You do not want these passive, you know people to be in charge. And a lot of companies right now are, and I want to free you up from this, your mom is in charge of debt collection. And she's a sweet lady. - [Co-Host] Yeah. - Your dad, sweet man, happy man. Great guy. Your dad's like Santa Claus and for some reason you have Santa Claus in charge of debt-- You know, I mean you have like a "Cousin Vinny," And you have your dad who's like Santa Claus. Why are you putting your dad in charge of debt collection? Get Vinny in there. Vinny's crazy. Vinny, Vinny will mix it up. Vinny will fight you at a bowling alley. That's the kinda guy you want in charge of debt collecting here. If you're gonna collect debt, let's get serious. That's money people owe you. - Get the right person to collect. - Yes. - There you have it. That's our 10 steps for creating a system for managing and collecting cash from your customers. Always if you have any questions do not hesitate to email us at info@thrive15.com. We're here to make you successful and see you succeeded. Awesome! Ba-boom.

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