Inefficiency will kill your business

Inefficiency will kill your business

Life is full of little challenges.

My shower stopped working a few months back. No big deal, I soon found a recommended plumber who fixed it, and you’ll be glad to hear I’ve been happily clean for quite some time now.

The thing is though, I still haven’t had the bill.

I rang the guy after a couple of months and explained that I hadn’t received my invoice. ‘Oh, she hasn’t got round to it yet’ came the reply, ‘thanks for being so honest.’

I’m not sure who the ‘she’ is but whoever ‘she’ is, she still hasn’t sent it.  What’s worse is that I offered to pay the plumber there and then…in cash. You know yourself how important cashflow is, and it’s left me wondering, if this lack of invoicing is the norm, how is he still in business? Inefficiency like this will surely send him under.

There’s an old saying – never discuss money, politics or religion – but if you’re running a business, you have to talk money  and the sooner the better. How much wealthier would this plumber be, if only he had a system that brought money into his customer dealings much sooner, and more consistently?

A simple, logical and repeatable system for invoicing his customers – a template invoice, a simple spreadsheet to track the work done, a reminder system to send the invoice when work is completed, short 7 day payment terms, and reminders to keep asking until payment is made.

Giving an estimate and getting a down-payment upfront, offering a discount for speedy payment and of course, knowing who has and who hasn’t paid their bill, are all tried and tested methods for keeping your cashflow healthy. For larger jobs, staged payments where you don’t move on to stage two until stage one has been paid for, also work well.

You like to believe that people would be honest and pay what they owe, but how many of us, if not asked for payment, would think, ‘Well if you’re not bothered, I’m not bothered’.

And then what happens? The likes of my plumber finally get their act together and send you an invoice, long after you’ve forgotten that you owed them money, screwing up your cashflow.

It’s a lose-lose situation, and completely avoidable.

As you’d expect, I’ll be chasing my plumber again today!

Do one thing: Review your invoicing system, and make sure you’re using it effectively.

Don’t forget that help in creating your system is at hand, via The Busy Business Owner’s Guide to Developing Simple Systems 

Leave a Reply

Your email address will not be published.