Retrain Tardy Paying Clients to Improve Cash Flow

If you have historically allowed your clients to pay you after thirty or sixty days, you may find it hard to change their habit. Ensure you agree credit terms with your client when you initially set up an account for them to help avoid this issue. Ensure you consider any terms related to late payment fees, interest or even prompt payment discounts.

Communicating your terms and conditions to your clients

When you have agreed terms, re-iterate them to your client in writing so they are aware of when you expect them to pay you. It also makes sense to advise them how non or late payments will be addressed. For example, a three-step process may include: sending them a statement immediately their account falls due; then calling them after seven days overdue, and then referring them to a debt collection specialist after twenty-eight days.

Be firm – it’s your money!

Many small business owners are afraid to ask for payment when its due. They allow their clients to delay paying rather than risking losing clients by appearing “pushy” or too demanding. Be more assertive as your client has already received your service or goods. You’re effectively working for nothing until your paid – a sale is only a sale when you’re paid. The “squeaky wheel gets oiled first” – make sure you’re the important squeaky wheel.

Speeding up slow payers

Have you allowed your clients to pay after thirty days and now you want them to start paying after seven days? Changing their habit make require “baby steps” to improve cash flow.

Contact them much sooner and more frequently than you did previously. Call or email them after fourteen days if they’re used to paying after thirty days. Let them know your invoice is due and politely ask when they will settle your account. Or start putting pressure on a little earlier. A few days before your invoice is due send them a statement and highlight the due date. You could even call them to ensure they have received your invoice. If your client can’t (or won’t) pay your invoice in full consider taking a part-payment and giving them the option to pay in one or two instalments.

So give it a go – retrain your slow paying clients to improve your cash flow. By making a few small changes to your invoicing processes, you will be able to improve cash flow.

The Four Factors That Control Your Managerial Effectiveness

In deciding what makes an effective manager, there are four main factors to consider and not all of them are directly controlled by the manager concerned. They are, YOU, YOUR JOB, THE PEOPLE YOU WORK WITH and YOUR ORGANISATION.

You

You bring your own knowledge, skills, abilities, talents and experience to the job you do as manager and these things will have an impact on how effective you can be in your role. Managers with greater experience can often remember the mistakes they made as a newbie and so appreciate how their now-seasoned skills can improve their job performance.

Your job

The actual position you hold and the work you do in its duties and responsibilities will affect your ability to be an effective manager, since it may be either a good or bad match for your skills and abilities.

The people you work with

Other employees have a major influence on managerial effectiveness. People are important if a manager wishes to achieve the work he/she needs to do. To a certain extent, effectiveness is measured by how well the manager concerned is able to motivate people and coordinate their efforts to achieve best performance. However, in many settings, a more realistic appraisal of management work is that managers are dependent upon their employees to get work done, so effectiveness will be determined by the skills, abilities and willingness of those people.

Your organisation

Organisational structure and where you are within it will affect the amount of authority you can wield and the responsibilities you are expected to be able to handle. It can also specify limits to what is achievable. Also, your organisation’s corporate culture, with its unwritten norms of conduct and methods of working, will influence your ability to be an effective manager.

So it is not enough to simply improve your knowledge of management techniques to improve your effectiveness. These techniques must be tempered by an understanding of these four factors in order to become practically useful in the corporate workplace.