Let the Cash Flow , livre ebook

Marshall Cavendish International - J Littlewood Simon

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137 pages

English

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Any business that allows their customers credit terms will invariably run into late or non-payments. This affects cash flow and business viability. However, as the authors show, customers that are solvent will pay some suppliers every month, even if they don't pay everyone. So how do you ensure you are "first in line" to get paid? This book examines the strategies that work - and those that don't. The authors introduce a simple but highly effective model, the Virtuous Revenue Cycle, that shows readers how to cultivate business relationships that keep the cash flowing. The strategies are highly practical, down to advice on just how to phrase those tricky emails reminding customers to pay up!

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Gestion et management

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Publié par	Marshall Cavendish International
Date de parution	12 avril 2021
Nombre de lectures	2
EAN13	9789814974318
Langue	English

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LET THE CASH FLOW
Let the Cash Flow
A practical guide to getting paid on time by your customers
Simon J. Littlewood Mark Laudi
2021 Marshall Cavendish International (Asia) Pte Ltd
Published in 2021 by Marshall Cavendish Business
An imprint of Marshall Cavendish International

All rights reserved
No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. Requests for permission should be addressed to the Publisher, Marshall Cavendish International (Asia) Private Limited, 1 New Industrial Road, Singapore 536196. Tel: (65) 6213 9300.
E-mail: genref@sg.marshallcavendish.com
Website: www.marshallcavendish.com
The publisher makes no representation or warranties with respect to the contents of this book, and specifically disclaims any implied warranties or merchantability or fitness for any particular purpose, and shall in no event be liable for any loss of profit or any other commercial damage, including but not limited to special, incidental, consequential, or other damages.
Other Marshall Cavendish Offices:
Marshall Cavendish Corporation, 800 Westchester Ave, Suite N-641, Rye Brook, NY 10573, USA Marshall Cavendish International (Thailand) Co Ltd, 253 Asoke, 16th Floor, Sukhumvit 21 Road, Klongtoey Nua, Wattana, Bangkok 10110, Thailand Marshall Cavendish (Malaysia) Sdn Bhd, Times Subang, Lot 46, Subang Hi-Tech Industrial Park, Batu Tiga, 40000 Shah Alam, Selangor Darul Ehsan, Malaysia
Marshall Cavendish is a registered trademark of Times Publishing Limited
National Library Board, Singapore Cataloguing in Publication Data
Names: Littlewood, Simon J. (Consultant). | Laudi, Mark, author.
Title: Let the Cash Flow: A practical guide to getting paid on time by your customers / Simon J. Littlewood, Mark Laudi.
Description: Singapore : Marshall Cavendish Business, 2021.
Identifiers: OCN 1243202700 | eISBN 978 981 4974 31 8
Subjects: LCSH: Accounts receivable. | Collecting of accounts. | Business enterprises- Finance.
Classification: DDC 658.15244-dc23
Printed in Singapore
Ad Maiorem Dei Gloriam

For Leslie P. Shaw

Revenue is vanity
Profit is sanity
Cash is reality
- Anonymous
Contents
Why we wrote this book
Part 1: This book, and how to use it
1.1 What s in this book
1.2 Definition and measurement of Accounts Receivable
1.3 Why receivables matter
1.4 Why receivables matter now
1.5 How this book will help
1.6 In disruption be bold
Part 2: The Virtuous Revenue Cycle
2.1 Meet the VRC
2.2 Challenge receivables myths
2.3 Forecast your cash needs
2.4 Take risk seriously
2.5 Insolvent customers and bad debt
Part 3: Case studies
3.1 Background
3.2 The MNC: Cash is reality
3.3 The SME: See it as love
3.4 The start-up: Trust gets paid
3.5 Key lessons
Part 4: Into action
4.1 Top-down ownership
4.2 Clear credit policy
4.3 Prompt and accurate invoicing
4.4 Proactive customer service model
4.5 Prompt discrepancy resolution
4.6 Systematic root cause elimination
4.7 Engaged, motivated sales team
4.8 Balanced scorecard
Part 5: Other opportunities
5.1 Reduce credit terms using BPDSO
5.2 Trade credit insurance
5.3 Leverage digital engagement
Part 6: Your start-up advantage
6.1 Why do start-ups fail?
6.2 The right foot
6.3 SME checklist
Part 7: How to make it happen
7.1 Value discovery - Why do it at all?
7.2 The elements of value discovery
7.3 Building support - Why does change fail?
7.4 Sequencing the changes
7.5 Outcome-based training
Part 8: Postscript
8.1 It s a journey
8.2 Make it positive
8.3 Tell us how you got on
Part 9: Appendices
Appendix 1: Acronyms you will need
Appendix 2: Credit policy template
Appendix 3: Proactive collections, guidelines, script Appendix 4: Issue resolution templates
Appendix 5: Audit and measurement
Why we wrote this book
When I first sat down with Simon over coffee to talk to him about accounts receivable, collections and cash flow, my training business was going strong.
It was 2016. Our sales were growing. Our customer base was growing. But our overdraft was growing, too. Some months we were struggling to pay salaries and rent. We were spending a growing amount of time chasing overdue invoices. The sales wheels were spinning, but cash flow was bogged down.
How could this be, I often wondered, when we had a delightful list of blue-chip clients.
How could this be, when we had a wonderfully warm working relationship with the decision makers who booked our services?
How could this be, when bookings were rolling in and I was virtually working 24/7?
Some months before my fateful coffee with Simon, I had made yet another collections call during which the customer told me she couldn t find the invoice oh wait, there it was, at the bottom of her in-tray.
I was fed up. I rolled up my sleeves and conceived of an online platform to send automated email reminders to our clients, telling them in the nicest possible way to pay up!
A customer who doesn t pay isn t a customer, it s a charity, I ranted to Simon, and underscored it with a final swig of my cup. Or worse, a parasite!
He chuckled and shook his head, and uttered those words that at first I hated to hear. Mark, when you don t get paid on time, it s because of something you did or did not do before your invoice became due.
How could this be? A customer doesn t pay, and it s my fault?
But I contemplated this for a while. Simon was very experienced in this area, had a 30-year track record in consulting to large companies, was a working capital specialist. Could he be right?
One of the most uncomfortable realisations about not getting paid on time was that most of the time it was my own fault: Invoices not sent in hard copy. Invoices not sent. Invoices not even written. Not checking the invoice for errors. Not checking whether the invoice had arrived. Not confirming the invoice was going to be settled by the due date. Not aware of the customer s lengthy and elaborate onboarding process before delivering the product or service. I couldn t even submit the invoice, whether it was correct or not.
Not only have I come around to Simon s way of thinking, there is a pressing need to spread the word. You would think something as essential as cash flow would get a great deal of attention. But we have found the issue doesn t even get enough recognition from the companies that need it most: Small and Medium Enterprises.
Just look at the shambolic invoices you receive from time to time from some of your suppliers. Misspelling your company name. Misstated prices. Missing Purchase Order. Missing account details to remit payment to. Missing due date. On occasion, I have even seen an expiry date on invoices! So, I just need to wait it out and then I won t need to pay it, is that right?
Many SMEs string along their own suppliers as long as possible before they promise to send a cheque and then take weeks more before they actually do, yet expect customers to pay instantly. And then they assume that after providing the product or service they are somehow magically going to get paid. And if not, shrug, there s nothing they can do about it.
The working capital gap starts with this knowledge gap. Worse, a whole industry has sprung up to take advantage of it. Invoice factoring services, microlending services, invoice gateways, payment gateways, procurement portals, accounting software and yes, automated reminder email platforms such as the one I had myself conceived, all promise to help you improve cash flow.
But what they are all missing is that getting paid on time is not a technology problem. It s a communications problem. It follows that it requires a communications solution.
That s what this book is about: how to talk to your customers so you are not only getting paid on time but building your relationship with them in the process.
Some of it will make you uncomfortable, as it challenges the entrenched notion that a delayed payment is always the customer s fault.
But as you settle back and read it with your own cup of coffee in hand, you will feel empowered because there is something you can do. You will feel reassured because you can regain control of your balance sheet. You will feel your business move forward because cash flow will gain traction when you rev up sales. You will look forward to calling customers as a contribution to customer service, rather than a drain of your valuable time.
And you will never have to make those dreaded collections calls again.
Part 1
This book, and how to use it
1.1 What s in this book
1.2 Definition and measurement of Accounts Receivable
1.3 Why receivables matter
1.4 Why receivables matter now
1.5 How this book will help
1.6 In disruption be bold
1.1 What s in this book
This book is designed to help you get paid on time by your customers. It is intended for companies of all sizes who allow their customers credit terms and are struggling with late payments.
Whether you are a start-up or a substantial enterprise, you will find here a solution to the problem of managing accounts receivable.
We simply argue that, since solvent companies always pay some suppliers every month, you should make it your objective to be one of the suppliers who gets paid.
This requires removing any real or imagined obstacle to timely customer payment through a single-minded approach to communication and service.
If you currently get paid in cash and are not owed money by any customers, you might want to spend your time - and your money - elsewhere. Unless you are just curious - in which case, read on!
Nor is this a manual for those in crisis, though we certainly offer good advice for companies for whom late payment has become critical, as well as a quick wins guide in Part 8 .
Every company which offers credit term