S2 E10: Cash is your Oxygen with Iain McPherson of Hewitt & Mcleod Ltd

Join me as I discuss the importance of Cash, Invoicing, and getting paid on time with Iain McPherson of Hewitt & McLeod. Partial Transcript: Dave: There are cashflow challenges in a good economy, and there are cashflow challenges in a downturn and recession. As we're here in, November 2022, just looking at the forecast for the next 26, 28 months. Looks a little bit daunting. so what are the differences between a good economy and a bad economy? Or are there not really any? We should just be doing the same processes to recover money? Iain: I think what the difference is, it's the consequences of not getting paid, that's what's changed drastically in a good economy, so to speak. You can get paid. Okay. and you can maybe have to wait for that, as we may be going to discuss. But the big difference now is the consequences between getting paid and getting paid on time. what can happen in between time can have a huge impact on your business with your suppliers being able to pay your employees, cover your own expenses. That's the big difference. That time scale now has really just everybody is struggling, your customers are struggling. So you have to be very proactive now, more than you've ever been to make sure that cash is coming in as quickly as possible. There is a basic framework that we would recommend every business has when it comes to getting paid. And the very first thing, as I alluded to there is knowing your customer. Before you even get to a collection process, you need to have an onboarding process so that starts with knowing your customer, doing a credit check on them checking, for example, company's house checking what their payment history currently is. Are they slow payers? Have they got a record the history of being a slow payer? Have they got a record of CCJs? So that warning signs right away, you then allude to terms and conditions. What are the terms of conditions? Are they, agreeable to them or are they forcing back? Are they trying to get you to come on to their negotiation there? So these are all steps that you have to have in place before you even get to the actual collection side of things. And, all these things have to be ticked to have to be agreed. They have to be agreed by the correct parties as well. Because your credit control and collection sometimes are looked on as the anti sales department. And we're not we're actually trying to maximize sales. We're trying to maximize sales that you're going to get paid for. And that's the difference. So when you're negotiating, you need to make sure you've got the right parties around the table. Okay? When you're agreeing payment terms, you're agreeing payment terms with your opposite number who can make those payments. You're not agreeing that with a buyer or a seller, you know, there's different parties involved in getting an invoice paid. It's not just anti accounts payable and accounts receivables. Contact Iain on Linkedin: https://www.linkedin.com/in/iain-mcpherson-increasecashflow/ and by email at [email protected] As ever, let me have your thoughts on [email protected]