SYSTEMS! SYSTEMS! SYSTEMS!
I cannot emphasize the importance of systems in a business! As an entrepreneur starting your own company, thinking about systems really isn’t the first thing on your mind but it should be! Bookkeeping is systematic method for the recording of finances received and finances disbursed! It is also fundamental in creating systems for the entrepreneur, systems for billing, systems for receiving, setting cycles for payments. A business that operates without systems is a business in chaos and one lacking in financial management which hinders cash flow!
“Everything is good until it’s not!” That’s just one quote I use with every client, every potential client hoping to communicate to that client the importance of keeping a business mind in every phase, facet of doing business. From the business plan to applications for employees, agreements between partners, contracts, structuring (LLC, S Corp) of the company for tax and other protective purposes; systems provide order that prevents chaos. If I had a nickel for every client that I’ve coached about business who believed that he or she knew the people that they were hiring or doing business with and thought that they did not need any written agreements for their business; I would be a millionaire. Business and money changes relationships! All relationships! Good business and systems make people think twice about expectations because it removes the gray areas!
Recently, I consulted with a company for bookkeeping. Their perception for what they needed and their needs were total opposite. Initially, my contract was geared only toward their monthly invoicing of clients. While the list of clients was okay in size the money generated was small, however I quickly noticed the growing list of clients that retained large balances on their account. I inquired about the balances and their response was, “oh that’s nothing to be alarmed about, these are good people and they will pay.” My response was persistent and I asked if they knew that outstanding balance was $30,000. Their response priceless! Their first response was denial and began questioning my results as a misunderstanding, but of course without hesitation, I produced a list of the offenders and I was correct. They were blown away! I wasn’t surprised. There wasn’t a system in place for them to collect or reminder their clients of outstanding balances. PSA! Good people, rich people, old people, young people, stupid people; GENERALLY NO ONE PAYS A BILL that he or she will not receive consequences if there is none payment! Light bills and telephone bills are paid because the alternatives are easily identified. However, like in the game, Monopoly, if a person owes you, it is your responsibility to invoice that debt and then follow-up on it!
Well shocker, the next contract included, me providing collection services. Quite a few of those who owed the debt, paid and cited that no one reminded them, inquired of my ‘new’ status with the company. Some had credit cards on file and thought that they were being charged monthly. The range of thought was diverse and chaotic. However, their perception of the company was tainted! When a company lacks excellence in any one part of the business; it questions their business skills in other areas!
It took a little over a year to collect majority of the payments owed to this company. Not only that, recovering of those finances revealed flaws in the company, broken communication between them and their clients expectations. It was a humbling experience for them and the cash that they had missed was causing havoc in their cash flow, however, prior to the discovery they just thought the company wasn’t making as much money and had begun to take their frustration out on the employees making turnover high! The lack of business systems was creating chaos in multiple areas of their business!
SYSTEMS MATTER! Lack of systems and organization changes the way people perceive what you do and their respect for it.
Business isn’t about just doing a hustle it is taking that hustle to the next level, setting limits, creating boundaries that help everyone to function better and greater! Good Business Systems that are implemented and enforced limit the possibility of confusion about expectations from clients, workers and even the business!
There is nothing worse than assuming or expecting something from someone and the expectations differ from the actual delivery of services or payment. Small businesses cannot absorb the cash flow hits that a large corporation could, however the reason a corporation can grow large is due to the systems in place! Systems create order, the more organized a business is, the more it can grow! NOTHING GOOD IS DEVELOPED OR DELIVERED IN CHAOS!
2019 IS YOUR YEAR? WELL IT BEGINS WITH #DoingBusinessBetter #BetterBooksequalBetterBusinessDecisions
