The hardest learned lesson I share from my previous adventures is a conversation around billing. Today, if you were to ask anyone within the Pulse Group organization what their Number 1 and Number 2 daily priorities are, they would respond with:
- Making sure our invoices get out; and
- Making sure our invoices are paid (collections).
Clearly with a good product offering and delivery on service, collection is much easier, but we can touch on that at another time. In a previous adventure of mine, I was young and learning. I had not known at the time that eventually my role would become owner, I did have some instincts that created issues in the office.
At the time we had 4 office personnel…(let’s just say, outsource your accounting…I’ll save that for another day’s conversation). The head office person managed by my partner at the time had gone on vacation at the same time as my partner. I found myself backing them up. No sweat right. Teamwork!
What I found was 3 months of work orders that had not been billed. $80,000.00! I was so pissed off and angry as our business struggled hardcore with cash flow and making payroll. I actually reached my partner on vacation to fire the main office person. My partner took ownership over the invoices not being done and told me we would not be firing anyone as it was their directive. This left me really lost and angry. What I was really identifying is the company was running on massive projects and sales I was closing, and not running on the service department. As a matter of fact, what service department? Why were we always robbing Peter to pay Paul…Now, I know.
After some contemplation, I put together a solution. The problem was sending out invoices 3 months old means:
- Another 30 days to wait or more
- Many do not remember the service, so less pay their bill, creating more collections etc…
My solution was to do invoicing 3 days a week. In less than an hour a day, 3 hours a week of time I could get done what would take 4 days of time to do 3 months worth of back billing. Then I put a double-check to the work order that when we evaluated invoicing for a day we double-checked it against the calendar and marked the calendar with an (I) at the beginning. This was just as a double-check and would take seconds to do. This way any staff member or manager would know at a glance that service call was billed.
My partner at the time said these exact words, “I’m not doing that”. I said great no problem it’s your department. What are you going to do then? He said nothing. It got ugly from there because basically I heard that our stress and daily grind was to provide a free service to people.
The point of this offering for July is in these trying and uncertain times, right the ship. Don’t like invoicing? Don’t like computers? Don’t like accounting? No problem. Continue to hate cash flow. Because hundreds of $125 bills and 10s of $500 bills equate to no cash flow problems. Look to your service department for stability and maintaining happy clients. Your clients want you there when they need you and you need to be financially viable and organized to offer that.
One final note…a warranty period is there to provide your customer time to show them your workmanship, not to endlessly take ownership over the manufacturer’s terrible hardware. When in doubt and when it is not your problem to own, send a bill. You will be surprised how your customers are happy to pay for your amazing service and it is quite easy to hear your client out and credit their service call.