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Are Your Business Collections a Roll-of-the-Dice?

Are Your Business Collections a Roll-of-the-Dice?


Sales, without any doubt, is the life blood of any business. No business can survive and grow without connecting the value of its goods or services with customers willing to purchase.  Correspondingly, no business stays in business without receiving timely payment for the goods and services they have provided.

During two decades as a corporate credit manager, and later as a consultant, I have worked with thousands of small business owners that lament about how difficult it is to get paid after doing everything they promised to deliver their product or service. The most common reason they give for their struggle is – Poor Cash Flow.

Slow payments to vendors are indeed a result of poor cash flow from your customer to you; however,  


The first question you, as a business owner, need to be able to answer is, WHY is your customer unable, or unwilling to pay you?

Is your customer unable to get paid from their customers?

Is your customer growing quickly and struggling to keep up with increasing cash needs?

Has your customer lost key personnel?

Are your bills less of a priority than their other vendors?

Has your customer experienced a major, unexpected event of some type?

Is your customer’s business in trouble?

The answer to these and other questions you ask will reveal the CAUSE of cash flow problems.

The take-away I want to leave you with is to dig deeper when your customer tells you they haven’t paid you because of cash flow. The way your customer answers these type of questions helps you begin to understand why payments are slow and often the conversation can strengthen your relationship with your customers.  Answering these questions can help you to see patterns in your own receivables systems.  As a business owner you don’t want to fight the same battles over and over, so clues to how to develop systems that help you minimize the variance in payments can yield repeatable and improved results.

If your business is B to B, business to business, you are billing your customers and carrying accounts receivables. To decrease the chance of your business not getting paid or being paid slowly you need to leverage the 5 Cs of credit:

Character – Capacity – Capital – Conditions – Collateral

In upcoming blogs I will look at how each of these areas factor into the decision to open new accounts and sell to new and existing customers. Subsequent articles will cover how you can use credit management principles to assure more consistent cash flow/collections and how collecting should be reframed as an important touchpoint in the sales process.

Selling and Collecting – And the Two Shall Meet

Every business I’ve ever worked for acknowledged that a sale, is not truly a sale, until it is paid for. Despite this caveat, these same businesses believed it necessary, some even felt beneficial, to foster a tension between the customer side of the business (sales) and the support side (credit & collections).

This unnecessary construct is a remnant of the old silo mentality, a holdover of 19th century manufacturing. This model was able to survive the 20th century because of an abundant supply of educated labor resulting from the post war baby boom and women entering the labor force.

Ultimately, this model wastes human capital and energy that can contribute diverse talents to the sales and customer relations cycle. Selling, in today’s stripped down lean organization, is no longer the sole responsibility of one department. Customers interact and develop relationships with many parts of your organization. These broader, deeper relationships require everyone in your organization is aligned to deliver previously unimagined levels of attention and service to all parts of your customer’s business.

As seller (the credit granting company) it has never been more important to align your business strategy and value proposition with every other part of your business that interacts with your customers’ business. Let us start with a typical sales traction.





In this transaction sales has set the tone of what to expect in the business relationship, gives the prospect a credit application and tells them to turn everything in to the Credit department.

If the Credit department is being judged on the percent of total accounts recievable past due and bad debt it is easiest for them to be strict in granting credit. This maximizes the departmental objectives but works counter to business goal of making more sales,and maximizing profit.

This siloed decision process that makes the Credit dept. look good may artificially restrict revenue (sales) growth, under utilizes operational capacity thereby over stating costs while sending the unintended message to the new customer you are not as eager to do business with them as sales led them to believe. This, in turn, will likely cause you to miss future opportunities. This is an example of one department, at the beginning of the cycle, not aligning with the business strategy but supporting the those measures that make the department look good.

Historically the Credit Department has not been viewed as a selling function because it was not revenue generating. It was seen as a cost center or a necessary evil, to minimize risk. In this scenario the Credit Department talks to the customers accounting department to gather credit information. They will talked to either operations or purchasing at the customer again after the credit evaluation process is done to inform them of the credit line and terms of sale. The manner in which these processes are handled sets a tone and flavor that will inevitably be communicated through the customer’s organization and start to paint a picture, in their eyes, of what your company is like. The Credit Department is selling you and your company to a broader part of your customer than the Sales Department will be.

This same example of cost center departments interfacing with your customer and engaging in soft selling/ relationship building conversations, can be played out in shipping, receiving, reception and most others in your business.

It is my experience these support functions historically feel disconnected from the higher profile, well paid, selling part of the business. These people know they are integral to the delivery of product and service but do not feel appreciated for everything they do in their often invisible role. For many of these jobs the people are doing their job best, when their function is invisible. They are too often only recognized when there is a break-down in what they do. This lack of formal accountability and coorespondingly, recognition, results in them being mentally disengaged from both the opportunities and resulting successes of seeing each customer engagement, at any level, as a chance to serve and impress a customer.

As business environments become increasingly competitive you can ill afford to not fully utilize all your employees and their talents. When you engage customers deeply, across their entire organization you have the ability to forge much closer relationships and garner more business. Every business I’ve been part of acknowledges it is easier to grow sales with existing customers rather than find and sell new ones. When you empower and engage with everyone that works for you this becomes not just possible, but probable when done correctly.



Michael Londo


Just in Time Direction, LLC.

Credit is the Lubricant to your Business. So, why do I avoid making collection calls?

Like most entrepreneurs you started your business with a certain passion for providing a product or service. You have a conviction that you can do something better than what you saw others doing, or not doing in the market. Many people in your position believe if they provide a superior offering, they will be paid because customers will see them as the best choice among the alternatives in the market.


Most customers you have and will have are honest, hardworking and ethical in their personal and business relationships. As you grow your business however, you will come in contact with an ever-increasing variety of people and with the larger numbers things will get a bit more complicated.


Everybody you are, or will be doing business with is, in turn, doing business with or working for someone else. Everyone has a slightly different business model, value proposition, and background in business that orients them uniquely to their market. With all the varied backgrounds, experiences, education, training, and general outlook on life comes huge differences in the expertise needed to create and run a successful business. Some people know accounting, finance, some are engineers, sales people, or marketers. This diversity means everyone has “gaps” in what they know how to do or like to do. As human beings we tend to avoid doing what we consider our weak points because they don’t provide the much-needed reinforcement. Let’s face it, we are all in need of positive reinforcement, especially when we’re doing something as uncertain as creating a business; our livelihood and others depend on our success.


People also have widely different access to capital. Undercapitalization is a leading cause of small business failure. People underestimate what it will take while they are getting up and running. This need for capital is why banks, credit cards, venture capitalist, family and friends exist or are drawn into new businesses.


You offer a product or service you strongly believe is a fair value and you do business with customers or clients that are, for the most part, honest and value what you sell them. So far this is a simple transaction. As you enter ever larger parts of the market place you will inevitably meet and do business with people that:

  • Are very good at what they do but not experienced running a business
  • Under funded
  • Overworked, overwhelmed and stressed
  • Procrastinate
  • Don’t have good bookkeeping practices
  • Avoid asking people for money
  • Have experienced a health problem or have a family member who has
  • Dishonest
  • Incompetent
  • Have legal problems
  • Growing too quickly
  • Have lost a major customer
  • Have lost a key employee
  • Just moved their office
  • Went through a computer system change
  • Had a business interrupting calamity
  • Etc . . . . . . . . . . .


The point is that you become exposed to all the potential downsides your customers are being exposed to.


This can be a rather scary proposition and is not appreciably different from all the unknown risk you might be exposed to working for someone else. This just part of business and life.


My first word of advice is to be systematic and prepared.

  • Keep a file on each new and existing customer
  • Document all conversations
  • Do not avoid calls about money, or emails about collecting overdue invoices. This is an unavoidable part of ANY business transaction. In fact, a sale is not truly a sale until you get paid for it.
  • When making collection calls, or engaging in collection correspondence, get the answers to 3 key questions each and every time.
    • Why is the invoice(s) past due? Cash flow is NOT an answer. It is only a symptom of something else.
    • Who is responsible for either resolving the issue raised in #1 above, or has the responsibility to authorize and pay?
    • When will the item(s) be paid? Or, when will that person do the research and get back to you with an answer that will then allow you to continue the collection activity?


Document the name of the people you talk to, their title and date of these conversations.


An equally crucial task is FOLLOW THROUGH and FOLLOW UP. The distinction between these is that Follow Through is doing what you said you would do if your company failed to deliver what the customer expected. Follow Up is confirming people do what they say they would do.


Effective collection is actually another type of sale. You are selling someone on the idea of paying you for something after your product or service has been delivered. It requires the integration of your sales, operations, accounting and collections functions. As a general rule, most customers are honest and will pay you. Understanding and documenting why you experience collection problems gives you the chance to learn what is not working in your business. If delinquencies result from what you, think of it as a spot operational audit of sorts.








All the same problems you encounter running your business will at some time or another occur in your customers’ businesses. Document everything. Since most small businesses do not have the resources to do in-depth credit checks, it is crucial you keep your finger on the figurative pulse of your customers. Slow payment, i.e. cash flow problems, that occur because your customer is having problems will be more quickly spotted by regular collection contact and asking the right questions of the right people. Documentation gives you the ability to see trends over time and have documented evidence if more aggressive techniques become necessary.


Credit and collection activities also help identify customers poised for growth. During a growth phase customers are often stressed for free cash flow and extending additional days to pay or increasing a credit line are two ways to increase cash flow. If you proactively and constructively engage your customer at these times and are willing to take a calculated risk, you can cement a bond that can last the life of your business.


Michael Londo

Vice President of Administration

Just in Time Direction, LLC.

Too Big to be Held Accountable

The services we buy are increasingly dominated by very large companies that are consolidating their respective markets. Two examples that exemplified this for me this week are wireless phones and road-side assistance.

To increase profits companies increasingly rely upon contract partners to deliver services to hold down costs.  These partners get paid commensurate with the number of services they deliver so, the cost to the bigger company that we, the buyer, sees varies either up or down with the volume.

The term service in too many of these arrangements is very loosely defined.

For example, a colleague at work lost her cell phone this week. She called the service provider to order a new phone and was told it would be 5 business days to get the replacement with everything from the cloud back-up installed. While on the phone with the provider, she went online to the same provider’s website and they offered a next morning delivery of the same phone with a technician for an hour to install everything from the cloud.  The person on the phone knew nothing about the next day service, an obvious disconnect and gap in “service delivery” and assured her this option didn’t exist.

She chose to order the phone online for delivery the next morning. The technician that showed up was a very personable subcontractor and a former Apple Genius. The replacement phone had been ordered using a family member’s upgrade, and she was assured that the other person’s service would not be disconnected or affected. When the replacement phone was activated, the service for the person whose upgrade was used was immediately disconnected. The technician was contacted, and he said it wasn’t possible that this had happened.  My colleague called AT&T, and after another hour they were able to correct the problem and get everything worked out.

Poor coordination across the provider’s service delivery network that included a website, client service department and next day subcontractor definitely detracted significantly from the quick painless, seamless delivery of both a product and service.

A second experience in the past week was replacing a car battery that had been installed a year ago by AAA.   Chicago has been in the midst of a 12-day artic cold snap. Wind-chill temperatures have been 10-30 below zero. The original battery was purchased twenty months ago when my car was stranded with a dead battery while I was on a trip. I was delighted that AAA could offer me a battery on-site at a competitive price with a 6-year warranty. Little did I know that using that warranty was another matter. During the recent cold spell my car would not start, and I had roadside assistance jump-start the car twice. The third time it wouldn’t start I asked about my warranty, so I didn’t have to continue to call for a jump-start and wait 2-3 hours for a service call. The driver that showed up from the battery subcontractor said the battery was fine, so he couldn’t replace it. I had to call again for a third jump-start in 2 days and that got the car going.  The next day the car wouldn’t start so I called a second time to get the battery replaced. The customer service agent for AAA said to go to a third party and have the battery checked and get documentation of their testing.  If they said the battery was bad, surely that would justify a replacement.  I took a couple hours to do that.  Again, a subcontractor came after an hour on the phone and an hour wait and said he was really sorry, but he couldn’t replace the battery.  He could only use their testing, and no other testing was valid for replacing the battery.  Furthermore, we were over our limit on battery jumps, so they really couldn’t help anymore.  Since I had to get to work the next day, I just went and bought a new battery from Auto Zone.  I have purchased a defective battery from them before, and the replacement process was simple and quick.  I brought my defective battery to a AAA office on Monday, and I am certain that my six-year warranty will prove to be worthless.  I was told, “that’s a separate division and we can’t help you here”.  I could call an 800 number and talk to member relations. As of this writing I have easily spent over 10 hours combined either on hold waiting to talk to someone, waiting for drivers to show up, explaining my predicament or appealing the case.

I am sure everyone has stories like this.  Companies that used to pride themselves on their service have cobbled together a business model with gaping holes that we are meant to navigate.  It is more “Do-It-Yourself” customer service.  It’s important to recognize who pays the price when costs are cut through this type of an approach.  The scarcest resource in our lives is time, and there is nothing that will create customer terrorists more than forcing their customers to waste their time with their service inefficiencies.

8 Steps to a Successful New Year

8 Steps to a Successful New Year

As another year comes to a close, and you reflect on your accomplishments, how do you feel?  Did you make the progress that you had hoped to make this year?    If you did, congratulations!  If you didn’t, why not?  The number one reason that people are stuck in the same place year after year is because they don’t take the time to set goals.

I am sure that at one time or another we have all heard the Harvard statistics
83% of the population does not set goals
14% have a plan in mind, but never write it down
3% write down their goals
The study found that the 14% that have goals are 10 times more successful than those without goals.

The 3% that write down those goals are 3 times more successful than the 14% that have goals but don’t write them down.

There are a few things to keep in mind when you are writing your goals.

1.  One of the biggest factors in reaching your goals is to BELIEVE that you can do it!  If the goal is too far out of your comfort zone, or you just don’t believe it is something that you could ever achieve, don’t even write it down.

2.  Write your goals down!   Writing down your goals will help you keep focused on them.  Put your goals on sticky notes on your mirror, on your dashboard, on your laptop, everywhere you will see them throughout the day.  If you don’t write them down, they will be jumbled up in your head with the other 15,000 thoughts that you have each day.

3. Visualize what you want.  Picture how you want your life to look a year from now.  Include your business, personal, family and financial goals.  When you visualize the outcome, your goals become clearer and easier to focus on.  Many athletes use this technique to improve their skills.  Kickers visualize the ball going through the middle of the uprights for a field goal, unfortunately, these kickers do not play for the Bears!

4. Commit to each goal and know its purpose.  Make sure you know why you want to achieve your goal and then make sure you are committed to achieving it. Write down why it is important to you and what impact it will have on your life.  Don’t write it down unless you are fully committed to it, otherwise, it will just nag at you all year and create negative energy and take you away from other goals.

5.  Make your goals SMART.

6. Create a plan of action.  Perhaps your goal is rather large and you need to break it down into smaller steps.  Or maybe there are a lot of little parts that make up your goal.  Create an action plan and check in with it on a regular basis to make sure that you are on track.  Review your goals throughout the year to make sure they are still relevant and make adjustments when necessary.

7.  Accountability.  Tell people about your goals.  Tell your friends, family, co-workers – this makes the goal more real and not as easy to back out of.  Then talk about it with them regularly.  Better yet, get an accountability partner, we do that!  We have several clients that we meet with weekly to go over their goals, set up a weekly action plan, review their weekly progress and help them to reach the next level.  It’s a quick 15 to 30-minute call each week, but it really helps keep you focused and moving forward.

8.  STOP Multitasking!    I mean it, stop watching tv, checking your phone, cooking dinner while you are reading this!   When you multi-task you are splitting your focus over several different tasks, causing you to lose focus and lowering the quality of your work.  It also takes longer to finish each separate task. So stop!  Learn to delegate.  Better yet, call us to help you offload some of your mundane tasks.

Business Development services such as Business Model Review and Business Coaching
Event and schedule management
Presentation design
Administrative services
Newsletter writing
Blog writing and editing
Inbox maintenance
Calendar maintenance and scheduling
Answering your phone

So what are you waiting for?  Go get a pen, paper, and your phone.  Write down at least 4 goals for next year and then pick up the phone to call us at 630.858.5483 to see how we can help you.  Good Luck!

Overwhelmed? Are you at the end of “Do It Yourself”?

Overwhelmed?  Are you at the end of ‘Do it Yourself’? 

3 Reasons to Get Help with your Business


Do you ever feel like you must be an expert at every aspect of your business?

Do you ever postpone tasks because you’d rather poke your eyes out than do them?

Do you find yourself taking way too much time to complete a task?

If you’ve ever felt any of the above, here are 3 reasons why it’s truly a great idea to find someone else to help you:

  • complete tasks that are outside your area of expertise
  • complete tasks that you avoid
  • complete tasks that take too much of your time.
  1. Increased Productivity – Let’s face it.  All of us have skills that we’re good at and some that we clearly are not.  While it is admirable to keep improving our skill sets, we do NOT have to be good at every aspect of our business.   Trying to do it all is unrealistic and time consuming and may get in the way of addressing your real priorities and goals.   Wouldn’t it be a relief to focus your time doing what you’re good at?  When you hand off tasks (accounting, invoicing, social media, email management, PowerPoint development, editing, call management), you can be supported in ways that allow you to dedicate your time and energy on what will advance your life or business in the direction of your goals.
  1. Increased Satisfaction – When you spend time doing tasks you’re good at, your enjoyment escalates.  That’s it!  If you’re the creative one, the networker, the planner, for example, getting help “packaging, fine tuning, or finishing” the materials frees you to enjoy the creative process but not the details.  Imagine having the ideas about your work but giving them to someone else to complete and polish.  Working with a staff gives you the joy of know that you can spend time doing what you love.
  1. Decreased Pressure – When you get rid of the expectation that you should be able to do it all, the result is so freeing! You don’t have to know all the details of Excel, QuickBooks, social media, PowerPoint, Adobe, Word, etc.  With someone else tracking and organizing your email, for example, a heavy task is lifted from your shoulders.  It’s still getting done, but you’re not the one tied to it.  You’re free to generate more ideas, more networking, more income, and more accomplishments in both your personal and business life—all of this with a feeling of being supported.

If you’d like to experience more productivity, more satisfaction and less pressure in your day-to-day life, please contact us.  We’ll help you figure out where you may be spinning your wheels trying to do it all, and together, we can help you focus on leveraging your time and unique super powers to grow your business.