I Know Who Has Your Money!

My three year-old, Ava, recently got a wallet for her purse.  Yes, she already has a purse.  Well, with a wallet, goes money.  And, she has already compiled quite the stash.  She even acquired enough cash to do a little lending.  Unfortunately, her lending standards could use some work.  For instance, if you smile at her, you get a quarter. A hug is worth a dollar.  And, you can expect a windfall for some milk and Goldfish.

However, the problem she is now running into is that she is low on funds, and she is none too happy about it.  She is on a collections war path!  “You have my money?” is now a commonly used phrase to our nine month-old, Lilly and to Phoebe, the family dog.  “Can I have it back, pwease?”  It usually works for her.

Unfortunately, several small business owners find themselves in the same predicament, especially this time of year.  Graphic designers, consultants, day cares, landscapers, manufacturers, pest control, accountants, etc. find themselves already playing catch up with customers who gladly took product or service for a promise to repay in the future.  So often the customers soon forget the gracious credit policy offered by the generous business owner.

So now that you know who has your money, it is now time to put that cash back in your pocket:

• Bill immediately.  A lot of businesses bill customers monthly, to keep things simple.  They offer 30 day terms to their customers.  In many cases, customers pay 45 – 60 days after they receive their invoice, and those are the customers that are paying on time.   Now consider this, business owners have to pay staff, vendors and taxes on time during the 45 - 60 day lag period. 

• Use a gadget that will allow you to run a credit card on the spot.  Several are now available, reliable, and cost effective.

https://squareup.com/

http://gopayment.com/

http://www.payanywhere.com/

• Consider using automatic drafts from the customer’s bank account through your bank. You can set up payments on a certain date or on a recurring basis. You will incur some costs to get this set up and may even incur costs each time the transaction occurs, however, it may be well worth it in the long run.

• Use an online bill payment service.  The easier it is for your customer, the quicker you will collect payment.

https://paymentnetwork.intuit.com/

https://www.paypal.com/

• Pick up the telephone.  Not text, Facebook, email, IM or carrier pigeon.  Call them and ask for a specific date you should expect payment in a polite, yet firm manner.

The TSBDC offers free and confidential one-on-one counseling for existing and start up small businesses. To register for go to http://www.tsbdc.org/.

Other contact information - Phone (615) 230-4780 www.volstate.edu/tsbdc