BUSINESS FATIGUE WHICH COSTS CASHFLOW
We hear a lot these days about people suffering fatigue. For instance, with the GFC and its aftermath, people in Europe are sick and tired of the word "austerity" in all its forms.
People have tightened their belts for a number of years now and the economic woes of many countries only seem to get worse. So austerity fatigue is the norm these days.
There is also reform fatigue when it comes to changing the ways we do business. It seems every new business book or consultant wants to change something in the way you do business. So here too, reform fatigue is setting in.
However, I respectively suggest, there is one element of business change which you should never suffer fatigue. That is the continued search to find business processes that increase cashflow from sales.
More so, finding new ways of selling your products does not have to be overly taxing or stressful. You simply observe the business world around you and test different strategies via small test cases. In many ways we are talking about the Japanese business practices called "Kaizen". This business process involves making continual small changes to business processes.
Such a work practice model avoids big changes, which usually occurs with a change of management. In such situations the baby can be thrown out with the bathwater. Nothing drives your employees more crazy then trying to keep up with constant major changes to work processes.
In addition, selling the concept of paying as well as the product; is a continually evolving process. It does not mean for instance, disrupting all current sales and payment practices with existing customers. Changing payment processes can be a gradual process, customer by customer or with every new customer.
The best of these changed business processes is when sales and credit/accounts receivable work together on payment strategies. In the smaller business, this process can be initiated via the business owner understanding that existing sales and credit/accounts receivable practices may no longer meet the needs of the business.
In the larger business corporations, with business silo fundamentals involved, the coming together of sales and credit/accounts receivable will never be easy. However it is a process which must be done, and more importantly, can be done.
If I were to say both sales and credit/accounts receivable need to work together, why do I believe this proposition?
With the right incentive salespeople are good at selling almost anything. The exceptions are if they do not believe in the "product", the terms under which the product is sold, or where business processes alienate the customer.
On the other hand, credit/accounts receivable people understand all the games and tactics customers play to avoid paying within terms or at all. Sadly however, are they allowed to use this knowledge before a slow paying customer is sold product or a bad debt gained.
If you ask sales and credit/accounts receivable to work together, they will generally produce the best sales and payment terms for each customer. In turn this results in producing the best sales practices which achieve the best cashflow outcomes for your business.
Once these two groups of employees learn to work together, there will be little process fatigue. There will always be interesting discussions over strategies as they work out to maximise sales and cashflow and for both groups to achieve their desired objectives.
The fundamental reality of business is; without sales there will be no cashflow. Without cashflow, there will be no sales.
May you be paid today rather than tomorrow