It’s harvest time! A successful harvest does not just happen. It is the result of a great deal of hard work. The soil must be tilled, seeds planted and nurtured. The gardener must weed often, lest the weeds overtake the crop. Drought, severe storms and many other perils could put the harvest at risk. If the plants in the garden were poorly planted, they will not have a good root structure and might not survive wind and rain.
Successful accounts receivable management also does not happen on its own. I am reminded of Peter Seller’s brilliant portrayal of Chauncey Gardener in the 1970 film, Being There.
A simple statement from a gardener about how seasons impact growth of the garden is interpreted as expert economic theory. In fact, it is. In order to have growth in the garden it is important that the roots are secure. Spring and summer are growth periods, while winter brings a time to prune, to wait and to plan. Fall, of course is the harvest.
In order to preserve cash flow, a small business must weather the tougher “seasons” by maintaining a strong accounts receivable management program. This is particularly true during this current pandemic. Strong “roots” – your commitment to a strong credit and collections program – will sustain you when the “storms” of economic downturn arrive. Just like the gardener nurtures good growth, a small business owner should grant, or possibly expand credit to customers who deserve it, and “weed out” customers who do not.
Accounts receivable management means constant attention to your aging report. Identify delinquent customers and follow up with them by phone or using a well drafted collection letter. Customers who ignore you should be referred to your collection agency without delay.
Doing the right things in the garden – planting the right seeds and tending the garden with care – will bring a good harvest. You can also reap the benefit of your accounts receivable management efforts with improved profitability.