“We are running out of cash!” said my boss. “If we don’t get some money by the end of the month, somebody isn’t going to get paid.”
“So what do you want me to do about it?” I asked.
“Our clients owe us money, and you need to collect it. I sell the product. You deliver, install and support it. If they aren’t paying, it’s because of you and your team, not me.”
“I don’t know how to collect money. I’m not comfortable asking people for money,” I replied.
“You want to get paid?” he asked.
Money from Deadbeats
I had a neighbor, George, who sold boxes to businesses. Whenever we talked about business, he would always talk about all the deadbeats he had as customers.
He told me he would spend at least a day a week making collection calls.
So I went to George and asked him how he collected money. He said, “Get a list of your aged accounts receivables, and start calling those who owe you the most money for the longest time.”
“What do you say?” I asked.
Here is what I say, “Hi, this is George from the company who sells you the boxes you are using to ship your product. You owe me $x for more than xx days, and I want you to pay me today.”
Make the Reasonable Request
He told me they would have all kinds of excuses for not paying. But he just wouldn’t listen to any of it. He would say, “You ordered the boxes, right? You received the boxes, right? You used the boxes, right? Pay me the money.”
George made collecting reasonable. After all, our customers did order the software. They did come to training. We did install it. They are using it. They owe us the money, and they are not paying. What is wrong with me? Why am I not getting paid this month? This isn’t fair!
So I looked down the list of accounts receivable and picked out the oldest receivables and the easiest calls. These were the people who had no reason not to pay us. I made those calls first.
Pain to Pleasure
I was nervous. But I did make the calls. And guess what? The customers would mostly agree and send me the money. The ones who objected fell into two categories. One, they were having cash flow issues and needed a payment plan. Or two, there was a problem with the product which was easily resolved.
Nobody likes to do collections. But I learned by doing it regularly, I began to enjoy it and was good at it. In fact, the joke in the office was, “Paparelli is our Italian collections guy. He can get anyone to pay.”
Personal growth in any area is difficult for all of us. Hopefully, you have a boss like I did who forces you to do something which makes you uncomfortable. Compelling yourself is the challenge of personal growth.
It may be cold calling, firing, interviewing, performance reviews, public speaking, the list is long. At first, none of us are good at any of these skills.
The 5 Simple Steps
- Commit to doing it.
- Find someone who does it all the time and ask them how they do it.
- Do it.
- Continue to do it.
- Teach someone else how to do it.
This is how personal growth happens.