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Do you remember the last line in your job description in the corporate field?

· Will perform other duties as required.

It was and still is the catch-22 of most working environments. One may have been hired as an engineer, accountant or office cleaner and expected to perform work related to your profession but they can always get ‘ya with other duties as required. It means: I know you didn’t sign on for this, but hey, it’s got to be done, someone’s got to do it. You may say, “why me”? Your boss or the human resources department replies, “why not”?

You might not think as entrepreneurs that we will fit into a mold, but we do, something that I refer to as the entrepreneurial paradox. We want different, we don’t want the usual working hours, answering to a time clock or to someone else, we want to be free and approach tasks and challenges in our very own way.

Most entrepreneurs have a good product or service, combined with a work ethic and an opportunity to be our own boss and work our own hours. Most of us don’t know that this actually means working more hours (sometimes a lot more).

Except for the few of you that may be setting up a bookkeeping or collection service, following up and having to collect on invoices is low on our list. If we think of it at all, we don’t think of it much. After all, when you were telling/convincing your spouse about starting your business, I’ll bet you never said “I’m really looking forward to calling up those customers who haven’t paid their bills!”

There are a number of reasons why about 50% of small businesses will not last more than five years, but what it comes down to is non-performance of ODAR (other duties as required).

Some of these duties may be cosmetic and others are critical. Foremost among the latter is credit and collections.

To help, we have four questions for you and four commands. If you think the word command is too strong, you may replace it with ‘suggestions’. On second thought, don’t replace the word. It is too important. Moses didn’t come down from the mountain with the ten suggestions, so…pay attention.

1. What is a customer?

They may be referred to as the lifeblood of our business and a well-known management consultant, Peter Drucker said that we are not in business to create a profit but to create a customer. They are all of those things and more. But what they are not…is your pals and your buddies. (Even Brando as the Godfather said, “It’s not personal, it’s business.)

There is a chapter in the first book I wrote on collections, titled, collecting from relatives and former friends. They tend to pay us last. Why? Because they can. They like us and figure we like them too, after all, we don’t call and ‘pester’ them for payment like the bank or anyone else. So, we get paid last…if we get paid at all.

When we’re just starting off, many of our first customers may in fact be friends and relatives. Even if they are not, we are hesitant. We don’t want to lose any business by ticking someone off and asking them to pay for a product or a service.

Three words: “Get over it.” Better yet, let’s make it four words: “Get over it – fast.” You’ve got competition out there and they aren’t held up by any such beliefs or niceties. You provided goods or a service and a deal is a deal. Richard may have been your golfing buddy, but right now he is a customer and expected to fulfill his part of the bargain. If you hesitate because you believe the relationship will change if you ask for payment….the relationship has already changed – when he became your customer. There is a group I know that has a saying that you don’t know exactly when a cucumber becomes a pickle, but it’s never going to be a cucumber again.

2. Who is your customer?

You need to know your customer, what is their business, who are their clients and most importantly – will they keep their word?

3. What is your philosophy on collections?

You need an elevator story for your collection philosophy. We learn fairly quick when we start our own business that the customer is not always right. But we don’t want to lose sight of the fact that right or wrong…they are always the customer.

Keep it simple and it will help you formulate the policies you need for collection activity. Here is one that works well for me in most organizations:

”A deal is a deal. We will provide our goods and services at a guaranteed standard and expect our customers to keep their end of the deal – to pay as agreed. We want to keep the customers…and be paid on time. Having said that, we are willing to work with all of our customers and to be flexible under most circumstances.”

4. A clear understanding of terms:

”Let’s just get the money issue out of the way so we can both relax.”

This was the statement made by an actress in a film who was in the world’s oldest profession. She knew from experience that it is better to resolve money issues and any terms before any exchange of goods and services.

If your terms are net 30 days, make sure your customer knows and agrees to those terms. It works two ways. They may say “we pay in 60 days”. There is going to be some give and take or acceptance on the part of one or both parties, they may not be terms of endearment – but get those issues out of the way right at the start.

5. Ask for the money.

This is rule number one in my collection seminars. It only seems obvious in the business of collections. Many folks may place a call to their customer and talk to them about the weather, sports or other subjects…hoping their customer will bring up the matter of the past-due invoice. Ain’t going to happen.

Others will dance around the topic, “wonder if you might be able to look after”, etc,. By all means be diplomatic and polite and you may even start your conversation with a well know customer about recent sports game or “how about all that rain”, but get to the business at hand. One of the reasons I wanted to all you today Eileen was about the two invoices that are outstanding. I can give you numbers and other details if you need them, but they total, just over $6,500 and I’m hoping you’ll have a check ready for pick up later today, or tomorrow…latest.

6. Always be prepared.

You know there will be reasons and excuses for delay, short or non-payment. The motto of the Boy Scouts and the Girl Scouts world wide is the same: Always be prepared.

Think ahead of time about effective statements and questions.

7. Follow up and give up.

If a customer has promised to pay in ten days, don’t be afraid to call on day twelve or even eleven. For some, you may even want to call on the tenth (will you be paying today) or the day before (just to confirm you’ll be paying tomorrow as promised).

Know when to draw the line and write off a small balance or assign to a third party to collect.

8. Don’t take it personally.

This is tricky. I tell people that the best attitude to have is “it ain’t my money”. You can negotiate more effectively when you see the bigger picture. The difficulty here is that if you are an individual entrepreneur, it is your money.

A different viewpoint may help.

We are in business and that means there will be delays in payments and sometimes, despite our best efforts, we may not collect. But, we’ll do the right thing and do it at the right time. We will learn from experience and recognize that it’s o.k. to have some losses…just not any unexpected losses or those we could have resolved.

Improved efforts in collections will help you in many other areas of your business. After all, think of what we are trying to do: have someone do something they really don’t want to do…and like it…and that is a good skill to have in starting out in a new business. You will think back fondly on your collection efforts in the future, when your biggest problem may be in finding enough bags to take home all the money you earn.