Cash Is King - Be Fair in Business
It doesn’t matter what industry you’re in, or how profitable your business is; if your customers are not paying you then you are not really in business at all.
I’d take it further and say that until the money is in the bank you shouldn’t even consider a sale as a sale.
Times can be tough at the moment, and without wanting to sound too liberal or goodie-goodie (because I’m not!), there’s suddenly all the more reason to treat each other fairly in business.
In good times when there’s lots of work about and lots of orders flowing, it’s easy to let cash collection slip. The money is coming in from some customers so we look at the others with an attitude saying “oh that’s just how they do business.”. This seems to be particularly true when you’re a smallish company and you have a big customer. There’s almost a tendency not to upset them by asking for payment.
The hard lesson comes when we are plunged into a downturn and your smaller customers stop ordering for a while. You are left exposed because the big guy still isn’t paying and may even have got worse with what they euphemistically call credit terms.
It’s already too late to start educating them that you rely on their money to just exist. Cash is simply another KPI to them. They even have targets to hit; What’s the average number of days we can keep the money before we pay our suppliers?
If you’re not in trouble yet - great! Set up a method of chasing customers as soon as their invoice becomes payable. The same thing is true if you are in trouble with your cash but make it more personal. Talk to the people you know as well as the accounts departments. They will want to help if you have been providing them with a decent service.
Finally - remember that this works both ways. You have suppliers who are hurting too. Pay them on time - please! One of them might be Triangle Software.
