I. Businessman. (Part 15)
I have a huge amount outstanding from clients, for work that I have done.
While I know it is important to follow up, I can’t get myself to chase them day and night for the money they owe me.
Learning No: 17
As a businessman, money is of no value, if you don’t have it when you need it.
Accounts & Finance teams across organizations, have one simple goal, to protect the interests of the organization that employs them.
In India, these people take it to a completely new level, finding every excuse in the book, from approval processes, to payment processes, to unavailability of signatories, anything that will give them the opportunity to delay your payment by a few more days.
Not all clients are like this, but a majority are.
So as a result, even though you may have a contract that states a particular period of credit before realization of the payment, you should be prepared for delays in receiving it.
How does one solve this issue?
By devoting time for collections.
By following up regularly.
By chasing clients for payments due.
Once you start running your own business, you would be so keen to keep growing it, that your focus usually ends up only in generating new streams of revenue.
However, if this revenue is not realized, you will end up creating bigger and bigger cash flow issues for your own organization.
A job is closed only once you have received the last payment against it. So collections of payments against services provided, are as important as executing the business itself.
Many of us shy away from taking on this responsibility. We actively avoid any situation that needs us to chase money. After all, who wants to beg for money? How can one stoop so low?
This attitude stems from the belief that most of us share: Money is bad. Money is the ‘root of all evil’.
But the fact is that money, by itself, is only a piece of paper. It is only a means for you to get what you want.
You could do good. Or you could do bad. The difference is what you chose to do with it.
Therefore, what’s bad is not money, but our attitude towards it.
What one forgets is that when you’re chasing a client for a payment, you’re not asking them for charity, but asking them to pay for what is rightfully yours. And the longer it takes them to pay you, the more disservice you are doing to yourself.
At the end of the day, it’s your money, so you need to show interest in collecting it.
It is a common belief that others will perceive you as greedy, money minded, cheap or vulgar, if you chase them for payments.
The fact is they just might.
The question is, will you let that affect you?
After all, there’s no point in projecting millions in profits, when most of it is sitting with your client, unrealized.
TO BE CONTINUED…
(This is part 15 of a series of blogs on my learnings as an entrepreneur )
Read Part 16 here