Bringing in the Money

Now that I’m a partner in our business I’m really motivated to bump up our cash flow, because now I receive a percentage of the profits. And my portion of the profits is what I will use to buy more shares.

As I sit at my desk, talking to clients and taking in the work, I begin to see that some of our processes could be improved. We are quite generous in extending credit to new customers without asking them for any information. I decide to put all new clients on a cash basis until I can get to know them. Then if they ask for credit I’ll have them fill out a one page credit application.

There is a big job that Denize asks me to handle, and that is to accumulate all of the hours worked for each client (often in ¼ hour increments) plus services like photocopies and postage and then type up invoices. I could see why Denize needed a partner – this was way too much work for someone who was overseeing the whole business. There is a lot of detail and it had been taking her almost three weeks to finish the job each month. Now, by concentrating all my time on it, I can finish in three days. And a few days after the invoices go out in the mail, the cheques begin to arrive!

Then there is one more task that very few people enjoy; calling clients whose bills are overdue to ask for payment. I can see that this will really impact our cash flow and go to work on it. It is hard at first, but after a while it becomes easier. There are some people who are simply casual about paying bills and these are the easy ones; they just need a reminder. Others try to put me off and I have to stand my ground; always being respectful yet firm and keeping everything on a professional level (no matter how I feel about them personally). It won’t make sense if I alienate customers and they go elsewhere.

I still can’t understand financial statements but I learn that with more cash in the bank we never have to pay overdraft charges. Also we can take advantage of discounts that our suppliers offer us for quick payment. And when year end comes and it’s time to distribute the profits the money is there for Denize and I. That part is VERY clear to me!