Titanic Disaster Can Strike Anytime!

Managing cash flow has never been more important for businesses as it has been in recent times. Failing to control costs and maximize revenues and profits can mean “Titanic” disaster for your business. Detecting the real causes can be complex and hard to put your finger on the problems because of the nonlinear nature of a business.

The challenge with managing cash flow in your business comes from the fact that almost every function in your business can impact cash flow. The usual business functions we think of which impact cash flow include:

• Sales
• Pricing
• Receivables
• Quality of product or service

In this post, Donald Hunter™ gives brief examples of how other functions in your business can affect your cash flow in a “Titanic” way. Examples of other functions include:

• Customer service
• Credit
• Claims
• Returns
• Shipping
• Marketing

We will illustrate a few examples below of how different functions in your business impact your cash flow.

Customer Service

Customer service impacts cash flow either in a positive or negative way. Your customer service representatives need to be friendly and courteous with your customers or else it will be easy for your customer to buy a substitute. When I eat at a restaurant for the first time, I’m as interested in the customer service as I am in the food. If the service is below my expectations, I probably won’t go back unless I’m forced to. If the quality of the food is also bad, then I definitely will never eat there again.

Being courteous isn’t the only quality your customer service representatives should have; they should be skilled in solving your customers’ problems. Being able to quickly identify what the customer’s problem is and giving simple solutions to get your customer quickly using your product or service is crucial.

Remember, you don’t get to choose your family in life and you also don’t always get to choose your customer. You may need to exercise extreme patience and love in how you respond to their questions and challenges no matter how silly they may seem.

The last thing I’d like to say on customer service is it is very important that customer service has visibility into other functions like credit, sales, returns, etc., so they know how to best serve your customers.

Credit

It is important if you extend credit to your customers to have a monitoring system in place to detect if your customer begins to show signs of having difficulties in their business. Negative signs will include things like slower payments, customers request larger credit lines, and you may hear from other suppliers who may be experiencing problems with your customers.

If payments begin to extend out further and further and you don’t have an agreement in place with them that allows this behavior, then you have a problem brewing. Now, you may choose to extend credit to some customers as much as 90 days, but they should have some special value to your business and they should be credit worthy.

If your customer begins to show signs of credit challenges, you should make Customer Service and Sales aware of the situation so they can adjust their focus with the customer, saving you from getting caught holding the bag.

Returns

Too many returns can have a significant impact on your business cash flow. Quality is the obvious reason for returns, but sales and marketing can also have a negative impact on how many returns you receive on a monthly basis.

If your offer is unclear or misleading, it can result in someone buying your product or service only to later discover it is not the right product or service for them. You can reduce your returns by qualifying buyers better and evaluating how you compensate your sales force, which will improve your business cash flow.

Cash Flow Management Assessment

One of the services Donald Hunter™ offers is to analyze your business’ processes, your customers’ experiences with your firm, and make recommendations on how you can improve your business cash flow. We have financial solutions that can help you get cash quickly to sustain your business and avoid “Titanic” disaster while we help you correct any problems in how you manage cash flow in your business.

Our assessments and models are designed to deal with the nonlinear nature of your business functions to help us identify the root cause of your cash flow problems. We also offer credit monitoring services to help you stay on top of what’s going on with your customers’ credit.

Sign-up now for your Complimentary Cash Flow Management Consultation. We can talk more specifically about how to avoid “Titanic” disaster and ways you can improve your business cash flow. We will share with you simple things you can start to do immediately to see better results in your business cash flow straightaway!

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