If you don’t and instead decide to stall this process believing that the UK will only be “slightly in recession” if or when the Eurozone collapse, then you may face closure, a situation you might have avoided had you taken the appropriate actions sooner to shore up your business’s infratructures and financial health.

At this late stage, will your bank support you? And provided your funding sources do approve an extension to any facilities you may have remaining availble to your business, you might find yourself pressured by suppliers to pay them on stricter terms.

Whichever way you look you should not ignore the vital importance of reviewing the state of your ledger(s) and unresolved billing disputes. Do not forget your O2C processes either. Make absolutely certain all your processes are adhered to by your staff and that all the processes are robust and able to support the business and debt collection efforts when adverse and restrictive cashflow periods occur.

Meet the recession head on with as few existing problems to resolve as possible. Be sure that your customers have no reason to not pay their debt.

On 22/09/2010 I wrote, “The news reports are beginning to fill with predictions of a 2nd Dip Recession. Not good. Not good at all. However, the jury is still out and that leaves the door ajar to permit a chink of sunlight in on an otherwise gloomy forecast. But this is no excuse for you to sit back and think your business’s cash collection is recession proof. You should be asking yourself if your sales ledger will provide you the continued unemcumbered flow of cash required to meet your HMRC commitments, purchases ledger payments and payroll needs“

“…you must assure yourself that your business can and will survive another crash…“

Seven Point Plan

1. PROTECT YOUR CASHFLOW

a. Cash is the King, Queen & Everything that happens in your business during recession. You are in business to make money, a very decent profit and most importantly – to have enough funding available to survive the downturn. So protecting the cash you have at the bank and in agreed overdraft facilities or tied up in your customers accounts needs your foremost attention at all times during recession. No money = closed business.
b. Collect those debts. Review your dunning strategies and change the issue interval from seven days between letters to five to bring payment in ahead of the month-end. Review staff collectors training then provide them a refresher course & also incentivise your collection staff to increase their call rate, reduce outstanding disputes and collect monies owed on or before due date. Reduce the overdue debt so the business can use the extra cash to fund marketing, payroll and suppliers bills. Get each collector engaged in the common objective and allow them to provide a bottoms-up of what they know is collectable in their ledgers. Publish a cash collection target on a board visible to all to increase cash and reduce DSO. You must add some ‘stretch’ to the cash collection target. Send out statements of accounts by no later than month-end +day3. The first dunning schedule must be mailed by no later than month-end +day8. Allow a 7 day interval then send letter 2. Final Notices must be printed and mailed to land on customers’ doormats by month-end +day23 latest so allowing them five clear to pay cleared funds before going legal by month-end +day28.
c. Suspend account and supply of goods if repeated payment default occurs. Follow through on all threats you make to suspend account facilities. Get the account paid, amend trading agreements (Payment terms) or trade again only on prepaid terms or bank guarantee.
d. Review Credit Limits & increase or downgrade where required. Involve Sales Dept in this process because they own the customer. Charge Late Payment fees (8%) of unpaid value.
e. Review the financial status of all your existing customers and credit check all new potential customers. Insist on prepayment wherever the risk seems even marginally high.
f. Connect, Engage & Communicate. To survive and generate sales you absolutely need to keep on engaging and communicating to your customers and your staff. You need to up your game to remain in business during hard times. Communication is one of the key elements to survival. If you think you can crawl into your shell and hope your reputation, product line and prices is sufficient reason to keep the customers calling to place orders – hell, you are in the wrong business! You have to imcrease your presence in the market by at least five or more levels to keep your competitors from stealing your hard-earned share of your marketplace. You need to keep letting your customers know you are the best for price, the best for service and the best to help their business succeed. And then you must repeat it again and again and prove that you are. If you communicate and engage your customers, your suppliers, your staff and your bank manager(s) regularly they will be compelled to support your business through the Double Dip.
g. PayPlan is an effective non-punitive means to trade through a cashflow crisis. A well constructed payplan permits your customer to pay legacy and current debt. You retain the customer and build lyalty that can be converted to an elongated busness relationship once 100% of the legacy debt is paid up.

2. BILLING DISPUTES

a. Eliminate billing disputes. Make certain Pricing checks & confirms all product/service/special customer prices in the billing system(s) are 100% correct. During rcession, you certainly do not need pricing disputes to hold up payments.
b. List and analyse open trouble tickets for unresolved pricing or product disputes that are holding back payment.
c. Investigate the open tickets for speedy validation or rejection. Get them prioritised by value and actioned for speedy resolution.
d. Credit Control must chase payments on all rejected claims and resolved disputes where undisputed values remain unpaid.
e. If Credit Notes are due, get them raised as quickly as possible and mailed to the customer to avoid any further payment delays. Payment of the unpaid undisputed portions of these bills must BE PAID IMMEDIATELY. No terms apply.

3. RETAIN CUSTOMERS

a. Retrain all your staff to provide customers the best & most outstanding service your customers will ever experience. Set high standards and challenge your staff to surpass them.
b. Make buying from your business a very compelling experience. Keep your customers focus on your service not on price.
c. Focus on the most profitable products/services. Sell online – go global if appropriate.
d. Review all your pricing strategies & renegotiate the wholesale prices you pay with suppliers. Negotiate further price reductions or improved early payment discounts from your suppliers.
e. Do not cut margins in an effort to attract more business. You cannot sustain thin margins. Revise pricing to suit your customerbase. You might be tempted to cut prices but this will not help you to survive. Thin margins are not the answer to your survival plans.

4. CUT COSTS

a. Cut Costs. Be careful and do not go overboard. Too much cutting can impair your ability to service customers.
b. Streamline your operation. Financial Reports and KPI’s Slash expenses. No more business lunches.
c. Don’t tie up capital in stock. Don’t hold more than you need;
d. Negotiate longer payment terms with your suppliers.
e. Agree a Payplan with your suppliers.
f. Consolidate your revenues streams to focus on those with larger margins.
g. Stop chasing profit through too many product offerings with thin margins. Put these on ice pending boom times.
h. Review relationships with customers who cannot grow or only purchase you least profitable lines. Cut them adrift if they are high maintenance, distracting and do pay to terms. The hidden cost (time away from your premier customers) is a price you can ill-afford.
i. Slash energy costs. Reduce electricity costs by switching off all office equipment at close of business. Do not leave those pinpont pilot lights on. They increase electric consumption and add to your bills.
j. Use free Open Source software. There are free and just as good alternatives to many of the top branded software solutions. Research the web before buying expensive off-the-shelf branded products.
k. Reduce your telephony bills by swapping over to Skype. Skype to Skype is free. Many businesses see the advantage of this service. Investigate it.
l. Save bank charges and pay suppliers via Paypal. Research this move away from banks and reduce costs

5. STAFF

a. Train Staff. Cross training in other roles is a good thing.
b. Reduce staff. If you can, consider a RIF. Payroll for many businesses is the largest expense. Sorry, but needs must.
c. Retain the best who will cope well with more workload without sacrificing quality of service.
d. Engage & involve staff more in the business. Keep them well informed about how well or badly the company is doing. Feedback very regularly about business KPI milestones and achievements YTD.
e. Communication to customers and staff is key and too much too often during a recession is not a bad thing.

6. MARKET YOUR BUSINESS

a. Continue to Market Your Business
b. Review your Value Proposition (or UCD) and Customer Service Strategy
c. Network as much as possible. Networking with people who can use your services or products.
d. Analyze Your Customer Mix. Focus selling to the customer category most likey to need your services.
e. Involve and ‘Incent’ Your Employees. By involving them positively they will add value and help your business survive.

7. CONTRACTS

a. Make sure copies of signed service contracts (if applicable to your business) for active debtors are on file and at hand in the event of a dispute on pricing, goods supplied or payment terms.
b. Engage account managers to help get contracts created and signed where needed.
c. Check addresses are correct for the delivery and head office address.Correct them if necessary.
d. Doublecheck the invoices are addressed to the correct payment centre and correct them if they are wrong.
e. Customer database must be cleaned up and updated.

Do all the above and more to ensure you aurvive and grow your business. The list is not representative of all the actions you need to take to ensure your business will survive. But it will go a long way to helping you get through tough times.

Once we crack the non-payment ‘problems’, (usually the easy low lying fruit), the job inevitably slips into a semi-automated function. Dangerous. And because we think we are on top of the job which we actually are nowhere near being, we tend to get the bucket of popcorn out, schlompf on the sofa and slip easily into auto-pilot mode. Meanwhile the juicy and deliciously complex and high value unpaid problems remain ignored. The sofa is way too comfy. This becomes your accepted performance level? You think it is as good as it gets? Really?

It’s a natural to think along these lines. We are only humans. Well guess what – bin the popcorn and burn the sofa because you need to snap out of it and start attacking the issues to improve your collections performance! And if you think you cannot crack it with the custome base you have, maybe you can swap customers with a colleague for some that suit your skillset and personality?

Meanwhile………..

Being a credit person I believe the very nature of the job means you are an advocate of change and want to jump off the sofa, chuck out the popcorn and ante up to gain the leading edge over recalcitrant debtors. Well guys, here is a key area where a tweak or a tune-up will have a positive impact on your KPI results.

THE PERSONALITY & SKILLS CHANGE: If you have a team of collections staff, you could begin with a review of your ledger splits. Depending on your view about the length of time a collector has tenure of a customer, you may want to select a few customer accounts to be swapped out among other team members. But not before you review the skill strengths and character of each individual in your team(s) and assign the customers accordingly. All too often this change results in better relationships as well as resolution to problematic payment trends. All due to making certain you fit the customer profile to the right controller. Yes, personalities and skills do make a difference. Do not forget to keep the relevant account/sales managers in the loop. They must input to the changes you want to make. And please, please never forget that the credit controllers concerned will be losing/exchanging part of their client-base. Your job here is to remember that these are your people and are all too human and so absolutely require to be treated with utmost respect and care. Involve them thoroughly and make the change as positive as possible.

Next time: Recalibrate: dunning strategies for effective cash collection performance

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If you want to be respected by others the great thing is to respect yourself. Only by that, only by self-respect will you compel others to respect you. ~ Fyodor Dostoyevsky

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如何使集合魔术

虽然我的午餐顺序等候在附近的咖啡馆于2010年8月24日’，我记下了上一张餐巾纸12现金集合规则。我使用这些规则，以斜了有效的现金收集和打开集合魔术我需要满足我的现金回收目标。你可以使用它们太＆打开现金收款魔术你在哪里工作。

1。完全吸引您的客户每一天
2。吸引您的团队的同事每天。
3。必须设置个人和团队的目标（cash!）。
4。建立，培育和保持扎实的工作与内部邻里关系 – 你的利益相关者。成功的关键。
5。铅，直接，教学和相互尊重。
6。挑战。不接受平庸。
7。保持专注于收集现金100％。
8。创建，修复和安装更好的流程。
9。计费错误修复快。
10。始终作用于你威胁的事情。
11。永远不会失败，以帮助客户的业务生存艰难的经济时代。
12。使工作的乐趣。笑！

最重要的是 – 沟通。向您的顾客经常可以。

说话，见面，写和沟通等等。

重复上述所有。请收藏魔法！
Robert Bruce
24th August 2010

TRADITIONAL/傳統

如何使集合魔術

1。完全吸引您的客戶每一天
2。吸引您的團隊的同事每天。
3。必須設置個人和團隊的目標（cash!）。
4。建立，培育和維持穩固的合作關係與內部鄰居 – 你的利益相關者。至關重要的成功。
5。鉛，直接，教學和相互尊重。
6。挑戰。不接受平庸。
7。繼續關注100％的收集現金。
8。創建，修復和安裝更好的流程。
9。計費錯誤修復快。
10。始終作用於你威脅的事情。
11。永遠不會失敗，以幫助客戶的業務生存艱難的經濟時代。
12。使工作的樂趣。笑！

最重要的是 – 溝通。向您的顧客經常可以。

說話，見面，寫和溝通等等。

重複上述所有。請收藏魔法！
Robert Bruce
24th August 2010

非常感謝您訪問我的網站。我希望我的翻譯12規則寫在餐巾紙已翻譯成你的語言，你可以理解的微妙和簡單的英語單詞和語法我用我原來的12規則在咖啡館“。

謝謝

羅伯特布魯斯

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