The King of Cash - part 2

Gemma rolled her eyes and walked backwards out of Nick’s office as he answered his ridiculous red telephone. She still hadn’t got an answer out of him, and she could hear her own phone ringing ominously again, no doubt another fretting debtor on the line.

Her holiday had been more than needed; it had been recommended by her doctor. She had been getting worse over the past few months, and had only managed a strained ‘Hello’ before bursting into tears on the poor young GP once again. And she couldn’t blame her family life- they had been really supportive as things deteriorated at work. But she knew how much the company needed her, how much they relied on her to sort out difficult customers. Having two weeks off, she saw now, was only half a solution, as no one had been covering her essential work properly while she was away. How could they? There was no standard policy to follow, though she had tried to instigate it many times. If she was honest with herself, she didn’t know where to start.

She struggled round the desks and reached for her phone, cringing all the while because she had a strong feeling about who was at the end of it.
‘Good morning, please could I speak to the person in charge of the accounts? I believe it is a Mrs Gemma Dodds?’
Gemma was slightly taken aback by the cool voice, the almost pleasant manner of the lady. ‘Speaking’ she squeaked.
‘My name is Helen Ross, and I am calling with regards to invoice number 44521, dated 1st July 2008?’ Gemma closed her eyes, knowing all too well what was coming next – that invoice number had been competing for brain space all holiday. ‘Would you be able to have that invoice to hand just now?’ the voice soothed.
She had expected a launch into a rant, had expected the voice to raise her hackles and start a row, but found herself sitting down and pulling the invoice from the bottom of her ‘to do’ tray. ‘Yes, I have it here. See, we’ve just been having a few problems, I’ve only just got back today to start sorting through the pile…’
‘That’s fine, I do understand. You see, we are having similar problems, it’s always tough to pay your suppliers when your customers are struggling isn’t it?’ Gemma felt a pang of guilt- she realised she wasn’t the only one in this situation. She used to talk to her suppliers and her customers – they used to have a great relationship. When did all that get lost?
‘Could you tell me, were there any problems with the products and the service you received from us?’ She couldn’t honestly say that there had been. The usual faultless service, and though her customers might claim otherwise to get out of paying their bills, the products had been of excellent quality too. ‘No,’ she murmured, ‘no, they were fine. Sorry, I know we should have paid this a while ago…’
‘Don’t worry, that’s why I’m calling you today- to work out a solution that is best for all of us’. Gemma could have wept. A solution? This was the call she had been praying for!
‘Could you tell me what is standing in your way at the moment?’ Helen queried, gently and persuasively. Gemma blinked – she honestly wasn’t sure. She had seen the figures, there was enough money in the bank to pay this bill, though she wasn’t convinced that there would be enough for all the bills… she realised in a flash that this was what Nick was most afraid of – running out of cash. Perhaps if she had been a little gentler with her own customers, like Helen was being to her now, they might be more willing to boost Nick’s coffers. Her shoulders sagged. ‘We are just a bit behind I’m afraid. I need to find out, well, I should really know, if we are able to pay you right now. I know it’s overdue, but I’m the only one who deals with this kind of thing, so it’s not been done as I’ve been away on holiday. I am sorry about this.’
‘Sounds like you need some support from within your own team,’ Helen mused. ‘Have you tried teaching others what you know? Sharing a bit of the responsibility?’ Gemma had certainly thought about it, but again, where should she start? She didn’t feel confident enough herself, let alone teaching others.
‘Don’t worry about this bill anyway. Could you give me a date you think you could get it paid to us by? Don’t worry if it’s a week or so, I’d just like you to give us a time so you’re not struggling, but also so we know when to realistically expect the money’. Helen sounded so reasonable, it was hard to resist replying ‘Well, actually, seeing as it’s right here infront of me, I can get the boss to sign the cheque today, if that’s ok with you?’ It made perfect sense to start getting rid of the problem, and as Helen had said, start finding solutions.
‘That would be fantastic, Gemma, thanks ever so much for prioritising us, and we’re really glad there were no problems with our service. So could I just confirm – if you pop it in the post today, it should get to us by the end of this week?’
‘Yes, the end of this week, and I’ll definitely get it sent today’ Gemma said, with far more conviction than she had felt five minutes ago.
‘Brilliant,’ Gemma could almost feel Helen smiling down the phone – and not a raised voice in the place. ‘I’ll drop you a line just to let you know we’ve received it, if that’s ok with you? Speak to you soon then.’
‘Ok, speak to you then.’ Gemma replied, trying to remember how Helen had got her to agree to this so gently and calmly.
‘Oh, and just one more thing’ said Helen, in a conspiratorial fashion, ‘if you’d be interested, I went on a fantastic course recently that really helped me with my credit management calls……’

Gemma’s situation shows why planning is so important. An old Chinese proverb states ‘only when the water is still can you see through it clearly’. Too many businesses find themselves in a web of difficult customers, late payments, demanding suppliers and emotional turmoil as their dream life seems to be edging away. It is almost impossible to drag yourself up when there is so much pressure on. By planning ahead for difficult times while things are stable, (while the water is clear) you are almost reaching out to a troubled ‘future you’ and providing them with a set of rules and processes to obey. It’s not just a rope, but a ladder: specific steps you can take to climb out of the difficulties.

Visit us next week to find out how Gemma’s course affects the rest of the business, and helps make Nick the King of Cash!

The King of Cash

Nick’s secretary Gemma has finally come back from her two week holiday, and bursts into his office just when he was beginning his second, much needed cup of coffee, brandishing red bills from suppliers. ‘These bills are due ages ago! They need paying or I’ll get them yelling at me down the phone. How come my cover didn’t organise this?’ she whines. Nick can feel his lips tightening slightly – surely the suppliers can wait another few days? He thinks to himself - ‘It’s not like we haven’t spent enough money with them recently. Though a cheque does take 5 days to clear, so perhaps it’ll be ok. That big customer who wasn’t in last time I called is supposed to be paying us tomorrow’.

He open his now rather parched mouth to placate her and tell her he’ll sign some cheques today, could she please just go and find the chequebook? But the telephone rings. Nick’s long suffering wife bought him a telephone in pillarbox red, which flashes when it rings. At the time he found it hilarious, and she had just smiled knowingly. Unfortunately these days it is worryingly appropriate, and he has a better idea of what that smile meant.

‘Good morning mate!’ says the voice on the other end of the line. Nick relaxes and leans back in his chair – it’s Vic, his long-term business pal, who has been a great customer for over ten years. After the morning he’s had so far, it’ll be great to have a moan about the industry for a bit. Nick pick up a pen and starts twirling it around his fingers absent-mindedly.

‘Sorry I’ve not been in touch for ages- you know how things are at the moment- busy running around in circles after my creditors!’ Nick nods and agrees, rolling his chair from side to side, pleased that he is warming up to what must be a good bit of gossip to make him feel a little better, perhaps something juicy on how badly the competiton is doing?

‘Tell me about it mate’ he enthuses, ‘Chasing customers eh? I’ve had two weeks of trying to get hold of people, and everyone seems to be on holiday, including my Gemma who normally does the calling. She’s so much better on the phone than I am. I can’t do the tough-guy act on my customers – it’d ruin the image I’m trying to build!’

‘Too true’ Vic commiserates. ‘you’re too nice to some of them. Has anything happened with that big contract that made up that ridiculous dispute to get out of paying you?’

Nick’s pen-twirling hits a knuckle and flips onto the floor and skids to a halt in the dust underneath the filing cabinet. The business mobile phone starts ringing, setting off a ringtone of his children laughing and singing their favourite TV tune. ‘Er, er, hang on a minute,’ he stutters, ‘good to hear from you mate – can I call you back?’

Vic suddenly has a tone of urgency in his voice, and begins talking uncharacteristically fast. ‘Well actually I was just really quickly phoning to ask a little favour…. You know how I’ve been chasing my customers, well, I’m having a bit of a cash flow struggle at the moment… would it be ok to put off our payment for another week or so?’

Nick blinks as the mobile phone stops ringing, but there is shouting in the office – Gemma’s probably on the phone to the suppliers again to sort out the bills. She doesn’t half give them some. He cringes slightly, imagining their faces the next time he places an order – he wishes sometimes she wasn’t quite so assertive!

‘Mate, I’ll have to get back to you, that was the bank. I’ll check out my figures and let you know- you know I’ll do whatever I can, but things are getting a bit tight here too’.

‘No probs mate, I’ll call you later then’ and Vic hangs up, before Nick can tell him he’ll be in meetings all afternoon.

A timid knock on the door brings Nick back to the moment, and the new lad pokes his head round the door. What was his name again? ‘Two people have just come into the showroom, boss. They want to talk to you about setting up credit terms? They’re going on about a big contract. Are there any forms I can give them until you’re ready to speak to them?’ Knowing that he meant to create those forms ages ago – it certainly would have made things simpler!- Nick hurriedly leaves his comfy chair and still steaming coffee and grabs his suit jacket. ‘Nope, don’t worry, thanks for the tip off, I’ll go and talk to them now’. He sweeps out of his office in an entirely contrived air of authority, leaving the new boy still proffering a notepad and pen in his wake, wondering what the bank wanted and if he can afford extending credit to any more customers……

Ever felt like events are out of your control? Be they economic factors or finding how much your business partner has spent on the company credit card, money matters often take on a life of their own. So much so that over a third of small- to medium- sized businesses claim problems with cash flow are the main reason for their business failing in the first 3 years.

All too often, a business story can end up more like a Lewis Carroll story: "No, no!" said the Queen. "Sentence first - verdict afterwards!". (Alice in Wonderland). So many businesses look back and can see exactly where they went wrong, but had no idea at the time. By the time it has become clear they are already paying their penance, be it bad debt, huge loans, or even a failed business.

If any of this sounds familiar, the constant pressures, worries and confidence around managing your customers and cash flow, log in to the next instalment to see how Nick gets himself out of it!