Updated: Jan 4
Before you can solve a problem you need to define what has caused that problem.
This sounds rather obvious, doesn’t it?
However, you wouldn’t believe the number of people who come to me with a problem but they haven’t really sat down to define what is causing the problem.
For example, there was a midlands stationary company supplying whose overdraft was growing, and it didn’t seem to stop, even though their sales were increasing!
What was the problem?
They weren’t chasing their debts!
Simple isn’t it, but it wasn’t to them.
You see they were frightened of losing sales to their competitors if they chased their debts. They explained that if their customers wanted to, they could go into town to W H Smiths or a similar stationer and they would lose their customer.
They were to frighten of losing customers. We had defined the problem, it was in their head.
We explained the Rules of Credit Management as laid out in our You Tube video https://www.youtube.com/watch?v=dAHBk9Gc7Sk&t=5s
We persuaded them to get into the habit that before they raised invoices, they rang those customers whose invoices they had raised seven days previously. We explained this is a customer relationship call for them to ask if the customer was happy with the delivery, when he said “yes” we trained them to ask if they needed anything else and then, at the end, ask if they received the invoice. Inevitably it was yes, so it was a simple question to ask when it would be paid.
Once we finally got them to do this on a regular basis, their cash came in, and much more importantly their sales went up as happy customers reordered immediately. Sales rose, and debtors came down, what could be better?
If your debtors are going up, give me a ring on 01926 855920 and let’s see if I can help you.
That's Think Cash!