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Improve Cash Flow Instantly!

Encourager-In-Chief: May 30th, 2018

Keep your accounts receivable up-to-date.

Years ago, I was coaching a plumber who worked primarily by himself. He had one helper and eventually hired one administrative office assistant. Even though he had been in business for quite a long time and was apparently a good plumber, his business was drowning (I apologize for the pun).

His branding was terrible and looked like it had been drawn by a six-year-old, but that wasn’t his biggest problem. He couldn’t keep his business afloat (sorry...pun #2) because his cash flow was so bad. My first inclination was to figure out how he could do jobs more efficiently with the people with whom he worked. However, I eventually learned the real problem: His cash flow was a mess. It wasn’t that he didn’t have enough customers; he simply wasn’t billing them.

In other words, he was so disorganized, that he would go from one job to the next, and then to the next, and then to the next and he wasn’t stopping to invoice his customers. He was months behind in sending out invoices and his customers were months behind paying them.

What made matters worse was, when he finally did call his delinquent customers, they were annoyed at him and said, “you waited three months to send me this invoice and now I have to jump through hoops to get you your payment a week later?” He didn’t have a leg to stand on.

When you put yourself in a situation like this, you lose all credibility with your customers. It’s always worse to be on the receiving end of an overdue bill. The good news is, he got his accounts payable up-to-date and kept it that way. In a short period of time, his cash flow turned from red to black. He didn’t even need to get a lot of new customers to be profitable. He simply needed to keep up with his invoicing and collecting money for the jobs as he completed them.

If you are guilty of slacking on your invoicing and collecting payments, I urge you to make this a top priority in your business. Either hire somebody to stay on top of this or do it yourself, but don’t put yourself into an operating loss by working and forgetting to bill your customers.

If you performing work for your customers and not getting paid for it, you are only practicing working.
- Dave Romeo

This excerpt is taken from my Survive and Thrive III: Increasing Cash Flow, Sales, and Profits seminar.

Survive And Thrive III: Increasing Cash Flow, Sales And Profits

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I also encourage you to order my Survive and Thrive in Your Own Business video program, which covers this lesson in much greater detail.

Survive and Thrive in Your Own Business

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