Take firm hand with debtors from start
MY BUSINESS partner and I have been running a successful internet pharmaceutical company for the past 15 years. With increased growth, we have picked up more customers but we are beginning to run into a few problems with receiving payment on time. Being a small business wholesaler a lot of our customers are becoming lax and some are now six months overdue because they know we don't have the people to chase them. We don't have the money to launch legal action to get them to pay, but we need to pay ...
MY BUSINESS partner and I have been running a successful internet pharmaceutical company for the past 15 years. With increased growth, we have picked up more customers but we are beginning to run into a few problems with receiving payment on time. Being a small business wholesaler a lot of our customers are becoming lax and some are now six months overdue because they know we don't have the people to chase them. We don't have the money to launch legal action to get them to pay, but we need to pay our bills, too. What would you recommend?The most common problem for business is cash flow and it's a vicious cycle. You're not collecting your own debts, which means you can't pay your invoices on time, so those businesses you owe money to aren't getting paid and it goes on and on.The bottom line is that you have to manage your accounts from the start and be really proactive in the collection process. If you prefer to settle debts out of court, which I definitely recommend, here is what you have to do.Start early and be absolutely steadfast. If you're late in your invoicing, you can expect the payments to follow suit. If it's a reoccurring invoice, make sure you're billing at the same time every time. Don't let it slide and then try to collect a big payment all at once. It's not going to work in your favour.Talk to an expert about budgeting and cash-flow forecasting. The Bank of Queensland has good factoring solutions for businesses. You should also consider an adviser who can help you with the management of your accounts, finance, loans, etc.We do this kind of work for a lot of small businesses and it saves them thousands of dollars. A proper adviser can be worth his or her weight in gold they'll ensure your business is running the way it should be so you can concentrate on the bigger picture.I HAVE an established franchise in a busy shopping centre. I have been operating for close to 10 years. While I realise that for many of my staff my business is just a job to help them through university, I am having problems with some staff that interview well but then become completely uninterested and unreliable shortly after being hired. How do I find staff that will care about my business?You can't expect that a 20-year-old kid is going to have the same passion for your business as you do, so setting clear objectives both for your staff and for the business as a whole will be essential to attract the right employees.You need to ask yourself one question: what do you want out of your business? Do you want to be the best shop in your franchise network? Do you want to win awards or hit a certain target? By identifying your top priority as a business you can then take your employees along on the journey.When you know what you want from your staff, you need to then identify what motivates them. For uni students, cash is probably the best incentive, but challenges are also great physiological motivators.So take a look at what you can do to get the most out of your people, and make a conscious effort to challenge them every day. Young people become disinterested out of boredom, so keeping your staff accountable and motivated will get you a better outcome.Join @markbouris on Twitter from 4pm-5pm (AEDT) today for live Small Business Q&A #bizQ&A.Mark Bouris is executive chairman of Yellow Brick Road, a wealth management company and small business adviser offering products and services for home loans, financial planning, insurance, superannuation, investments, accounting and tax: ybr.com.au.Email questions to Max Mason at firstname.lastname@example.org.
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